CryptoNinjas had the pleasure to speak this week with Martin Davidson, the Co-founder, Global Director and CEO of Blockchain Centre. Launched in November 2014, Blockchain Centre is the world’s first blockchain knowledge hub based in Melbourne focusing on education, coworking, and community events. Martin also sits on the board of the Blockchain Association of Australia which is Australia’s longest running not for profit Bitcoin and Blockchain advocacy organization.
Blockchain Centre has state of the art coworking and shared office space for startups working in blockchain technology. It is a community and knowledge hub for blockchain start-ups in Australia, with over 2,000 people in its ecosystem.
Just recently Blockchain Centre took part along with two of its member businesses in May’s Austrade Delegation Trade Mission to Consensus NYC in Time Square, the world’s largest Blockchain Technology conference in history.
Check out what he thinks of the future of Bitcoin Cash, the fork and Bitcoin’s status below:
Bitcoin is so far and away the leading cryptocurrency in adoption etc, Bitcoin ATMs, Expedia, Overstock, and others accept BTC, will bitcoin ever be superseded?
Bitcoin and cryptocurrencies have only been around for 8 years and are still very experimental technologies. However, what is undeniable is the exponential rise in their value against all other government and central bank issued currencies. The computational power and security behind Bitcoin are unmatched by any other system on earth which is another factor in its value, in addition to being able to send and receive value to anyone on the internet without having to go through a middleman, third party or a bank. I’m not saying Bitcoin will never be superseded by another cryptocurrency as Bitcoin does indeed have limitations regarding its use of a transactional system like Visa for instance, but in order for another cryptocurrency to gain more dollar value than Bitcoin, it would need to have a bigger network effect, meaning more users and plus the same amount of trust or confidence which Bitcoin has built up since January 2009.
So what was the point of Bitcoin Cash? Is there a technical way besides using ShapeShift type services for users to be able to send Bitcoin Cash to BTC wallets?
There’s been much debate within the Bitcoin community over the past few years on how Bitcoin should be upgraded and scale to accommodate more users, without them having to pay high transaction fees. One camp has been asking for an increase to the ‘block size’ which is the amount of data, or transactions included onto the blockchain every ten minutes. However by increasing the block size beyond the existing 1mb limit, which is around 5 transactions per second or 2500 transactions every ten minutes, there lies the risk of Bitcoin being less decentralized and therefore more open to attack by people who may want to control the network.
Bitcoin Cash can be thought of as another altcoin just like Litecoin and hundreds of other cryptocurrencies which have been created by a group of developers who want Bitcoin to have a larger block size, rather than follow the roadmap set out by the Bitcoin Core development team. Bitcoin Cash is basically just a copy of Bitcoin’s data set transaction history, or its ‘blockchain’.
Bitcoin Cash is already tradeable on some of the worlds largest cryptocurrency exchanges such as Kraken and Bitfinex to name a couple. Please be aware however these exchanges are not insured or regulated in the traditional sense and should only be used to exchange cryptocurrency, not as a storage facility like a bank. Users should educate themselves on how to secure their own private keys and storage of cryptocurrency on hardware wallets, etc..
There are also some questions about how to secure the new Bitcoin Cash software is. Just like with any new software that hasn’t been battle tested, people should proceed with a great amount of caution and only use very small amounts of money to test and learn about how to use these new cryptocurrencies. It’s experimental technology and not designed for the masses to use, not yet anyhow…
Was this all about creating free money? How will we know in a years time if Bitcoin Cash is dead or a working altcoin?
Those people who had Bitcoins before the chain split or fork will automatically be given the same amount of the newly created ‘Bitcoin Cash’ if they held their own private keys or were using software that supported the split, or chain fork.
Once a blockchain is created and has hardware mining, also known as hash power support, it’s quite possible for the cryptocurrency to survive indefinitely, so long as it has a community of users. If you look at the Ethereum fork last year where the chain split into two, we now have Ethereum Classic and Ethereum which have a community of users, separate mining operations, and different market values.
It’s quite possible Bitcoin Cash will have its own network infrastructure, application layer services, and a new user base who like the value Bitcoin Cash brings over the existing, longest standing and most valuable cryptocurrency which is the original Bitcoin. Bitcoin Cash is a public blockchain cryptocurrency and therefore anyone can view the blockchain explorer (bitcoin has a version called blockchain.info) which will show all the network statistics including a number of transactions happening on the network. This can be an indicator of usage, however, the market cap or value over the long term is also a strong indicator or its potential.
How similar or how different is this from the Ethereum, Ethereum Classic situation?
The DAO smart contract on the Ethereum network last year had a bug which was exploited by a hacker. $50m of ETH (Ethereum currency) was drained from the smart contract which was meant to be used to fund DAO projects, the first being Slock.it, a smart locks proposal. Fortunately, there was a contingency plan should such a hack occur which meant the history of the event, or the blockchain, could be rolled back, undoing the hack and returning the ‘stolen’ or hacked funds back to the investors. The very notion that an immutable blockchain could, or even should be rolled back is for many people in the community betrayal of the ideology of blockchain technology. This caused a split in the community whereby now we have Ethereum and Ethereum Classic. Both are open source and public blockchain and both can incorporate much the same technical upgrades and application use cases.
Bitcoin Cash, however, is basically a slightly different version of Bitcoin which has been created by a group of developers who want the option of using a blockchain with a bigger block size and greater transaction throughput capacity. Although Bitcoin Core’s ‘Segwit’ upgrade will provide up to four times the increase in transaction capacity while maintaining a 1mb block size limit.
Will Bitcoin get another forked coin?
It is always possible to copy the codebase of an open source blockchain or cryptocurrency project. The success of any new blockchain will depend on how many quality developers it has and people willing to invest in the infrastructure of the coin. Then, of course, there is the number of people willing to use and have confidence in conducting commerce using the coin. Most of the existing cryptocurrencies or blockchains are forks from existing projects, starting of course with Bitcoin in 2009.
So whatever happened to Bitcoin Unlimited?
Bitcoin Unlimted, like Bitcoin XT or Bip 101 (a BIP is a Bitcoin Improvement Proposal) are proposals to hard fork and create a competing chain or new version of Bitcoin, just like we now have with Bitcoin Cash. Bitcoin Unlimited never gained enough community and mining power support to enact a hard fork or chain split.
What do you think the end game is in the BTC scaling debate or is it never-ending?
Scaling in decentralized systems, so far as we know, to date, will always have more challenges when compared to centralized systems. Having data stored in many different places and needing every blockchain node, database or ledger of transactions to check against each other creates limitations on how quickly data can propagate throughout the network. I believe new scaling solutions will be developed as the network continues to grow just as we have seen with Bitcoin Core Segwit and the now alternative Bitcoin, Bitcoin Cash.
Will Bitcoin ever have a service comparable to the Ethereum Name Service (ENS)?
Once Segwit is enabled on Bitcoin, layer two scaling solutions and other application uses of the Bitcoin Blockchain have indeed been proposed and in time may well be possible. Using namespaces or what is currently known as DNS (domain name systems) could be one such application. Namecoin is an example of a fork of Bitcoin which addresses this application usage. NEM is another blockchain project which goes even further with what is capable of using blockchain technology and namespaces and smart assets.
What do you think of some of these ledgerless blockchain technologies and other decentralized non-blockchain technologies which are technologically superior to Bitcoin?
To be honest, working on all the existing Blockchain Centre activities and the expansion to open new centers around the world, I find it hard to study and keep up to speed on all the new blockchain technology that is coming to market. This is cutting-edge computer science and not having a CS Masters Degree, I’m always mindful only comment on technology I have experience of using. For those who know how to use it, Bitcoin has proven itself to be highly secure, easily transferable and a great store of value over time. It is the blockchain for value transfer and so far no other blockchain has proven itself superior. For other application use cases, other blockchains may well offer an advantage over the existing centralized system, we will have to wait and see. There is most certainly a great deal of investment pouring into the industry and many successful venture capitalists are betting big on the future of Blockchain.
I think we are in the belief that Bitcoin is Bitcoin, in other words…it does not have to be a super perfect technological specimen for it to have its value, we believe due to that fact that IT IS Bitcoin makes it have its value and people accept and want Bitcoin, so even if my transaction takes one minute longer than another technology, etc I don’t care because, as far as the digital currency world and payments… it’s the one and only ‘Bitcoin’ which people have come to trust, does that make sense and do you agree?
Yes, I would pretty much agree with you on that. Bitcoin solves a real-world problem and does so very elegantly. People are using it as a store of value and a hedge against inflation of the fiat money supply. They’re also using it as an uncensorable medium of exchange. Now they have been created and increase exponentially in value over time, along with the number of users and people interested in the technology, I cannot imagine a future whereby some form of Bitcoin, blockchain or cryptocurrency does not exist.