Marc Hochstein is the managing editor of CoinDesk and the former editor-in-chief of financial industry publication American Banker.
The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.
November is going to be a nail-biter for bitcoin.
It’s unclear whether the Segwit2x hard fork, expected to take place around Nov. 18, will leave us with one or two cryptocurrencies. And with more than $110 billion of value on the line, it’s far from assured investors will come out ahead.
But let’s take a deep breath, step back and appreciate the beauty of the situation. Because while in the short term hard forks can be stressful, they may be a blessing in disguise.
The reason is that forks potentially represent a welcome innovation in the way people can resolve their differences. Simply put, forks offer the possibility of exit. They give dissident minorities a third option beyond trying to change the majority’s minds or adapting to their preferences. A fork is a bloodless, 21st-century form of secession.
This is hardly an original observation on my part.
In his recent essay entitled “Blockchain Man,” Taylor Pearson imagines a future where distributed computing leads to:
“A society defined by forking. The balance between voice and exit will tilt towards exit. … If you disagree with a decision, you can fork a new blockchain.”
It’s a tantalizing thought. For now, though, the reality is messier.
True, bitcoin cash, bitcoin gold and ethereum classic are examples of forks where, despite some trolling between camps, the prevailing attitude was “you do you.”
But the controversies over Segwit2x and its predecessors (Bitcoin XT, Classic and Unlimited) have had more of a zero-sum character, sometimes approaching tribal warfare.
Why can’t one side just fork and let live? “Nobody wants to admit they’re ‘the other guy’,” said Andrea O’Sullivan, technology policy program manager at the Mercatus Center at George Mason University. “They want to be the main guy.”
A charitable interpretation is that “people are very emotionally attached to the concept of bitcoin,” she said. “They had their own idea of what it was and wanted to lay claim to Satoshi’s vision.”
A less flattering explanation, not mutually exclusive with the first, is that this fight is ultimately about money.
“You’re talking about something rivalrous at the end of the day,” O’Sullivan said.
Oddly enough, there’s a case that enterprise blockchain (of all things) is where forking could really give individuals greater agency. For example, Preston Byrne, an independent consultant and founder of Tomram LLC, foresees a day when much of the work at law firms is automated, in part with open-source, standardized blockchain software.
In this world, a restless lawyer might realize that his employer’s infrastructure is easily replicable with code from the public domain, and think, “I can automate so much of this drudgery. Why not go fork off and do my own thing, and let the machines handle the back office?” said Byrne.
Fork off and do your own thing. Now, that sounds like the American dream.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which acted as organizer for the Segwit2x proposal.
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