The discussion around a potential hard fork of the Bitcoin blockchain caused by Bitcoin Classic has been centered around the development team’s proposed increase in the block size limit, but this new implementation of the Bitcoin protocol is about much more than a change to Bitcoin’s consensus rules. In fact, alterations to Bitcoin governance are one of the core points of the software client. As Bitcoin Classic Developer Gavin Andresen stated on a recent episode of Let’s Talk Bitcoin:

“This disagreement is (A) a disagreement about governance. How do we make these kinds of decisions? And (B) it’s a disagreement about how urgent the problem is right now.”

Coinbase CEO Brian Armstrong recently referred to the possibility of a hard fork as an election, which some would say puts Bitcoin’s role as algorithmically controlled money and payment system into question. If a majority of Bitcoin miners can vote on changes to the Bitcoin protocol, then the reality is that the system is controlled by much more than just math.

Bitcoin as Algorithmic Money

One of the key benefits of Bitcoin touted by many of the cryptocurrency’s proponents up to this point has been that it is a digital cash system based on math and cryptography. As many have said in the past, the constitution is the code. One of Bitcoin Core’s policies that is intended to uphold bitcoin’s role as algorithmic money is the standard of 95 percent approval from miners for soft forks.

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The 95 percent activation rule has made it difficult to make changes to Bitcoin’s consensus rules at times, but it’s also ensured that only changes with near-universal approval get implemented into the protocol. This allows Bitcoin to retain its original purpose of offering censorship-resistant payments and an algorithmically-controlled monetary policy while also making room for new, uncontroversial improvements over time.

Of course, Bitcoin didn’t always operate on this notion of near-universal consensus on protocol changes. Satoshi Nakamoto was essentially the project’s benevolent dictator in the early days, and Gavin Andresen took over that role after the mysterious creator of Bitcoin disappeared in 2010. In the case of BIP 16, only 55 percent of hashing power was required to activate the soft fork. While this was helpful in getting P2SH rolled out in a timely fashion, Bitcoin Core Contributor and Blockstream Co-Founder Mark Friedenbachclaims the feature is “deficient” and we are now stuck with it because Andresen did not want to wait for consensus. Bitcoin Core moved away from the benevolent dictator model after Wladimir J. van der Laan became lead maintainer of the project in April 2014.

The Political Threat to Bitcoin

A portion of the Bitcoin community is currently attempting to change Bitcoin’s governance model via a hard fork. The hard fork would increase the block size limit to 2 MB, and the fork would activate at a threshold of 75 percent of the network hashrate. This proposal, to make a change to Bitcoin’s consensus rules with 75 percent (or more realistically 70 percent) of the network’s hashing power signaling their support for the change, is viewed negatively by the Bitcoin Core development team for technical and philosophical reasons.

Both Gavin Andresen and Jeff Garzik, another Bitcoin Core developer who is also now developing for Bitcoin Classic, have written about why a 95 percent activation threshold may be unreasonable. Andresen states that a 75-percent threshold is meant to prevent a large mining pool from vetoing a change to Bitcoin’s consensus rules, while Garzik has noted, “95% implies that you only need to rent 5% of hashpower to sway the outcome, a decreasing cost barrier.”

Garzik also made a pull request on the Bitcoin Classic Github repository that would increase the hard fork activation threshold to 80 percent.

Some have viewed Bitcoin Classic as a political attack on the Bitcoin network due to its use of a 75 percent activation threshold for a hard fork. One individual who sees Bitcoin Classic as an attack on Bitcoin is Former WizSec Managing Director J. Maurice. Maurice, who led WizSec’s investigation into the missing Mt. Gox bitcoins, shared the following statement with Nasdaq:

“Bitcoin was created to remove our need for trusted third parties. We should not transform Bitcoin into a democracy or other political structure where backers of rogue hard forks can use politics to become our elected leaders. The existing peer review process by the developer community is doing an excellent job of scaling the project, and will continue to do so with SegWit, sidechains, and other advancements in blockchain technology. Bitcoin cannot allow political power plays to circumvent the peer review process of our trusted developer community.”

Other critics of the proposal to lower the threshold for making changes to Bitcoin’s consensus rules have pointed out that fiat currencies, such as the U.S. dollar, have already implemented the concept of majority-controlled monetary and regulatory policy. In their view, one of the core concepts behind Bitcoin was to make sure that it did not succumb to the same sort of political influence that is seen in those systems.

Of course, there is also the argument that Bitcoin’s political issues are caused by technical limitations of the technology. After all, there would be no block size limit controversy if the system could easily scale while maintaining a high degree of decentralization.

It Does Not Appear Bitcoin Classic Will Succeed

For now, it appears that Bitcoin Classic will not succeed in initializing a hard fork. A letter signed by mining pools representing a majority of hashing power on the network and a few other Bitcoin companies was recently posted on Medium, and it stated the undersigned’s intentions to stick with Bitcoin Core as long as they clarify when a hard fork to an increased block size will happen. Ironically, Coinbase Director of Engineering Charlie Lee was one of the individuals who signed the letter, while the company’s CEO Brian Armstrong has been one of Bitcoin Classic’s most vocal supporters. BTCC COO Samson Mow has also indicated Bitcoin Classic has overstated their support and companies not listed as signatories in the recent Bitcoin Roundtable letter have made a commitment to not run Bitcoin Classic.

Sidechains to the Rescue?

One possible solution to Bitcoin’s political troubles is sidechains. In the past, Hashcash Creator and Blockstream President Adam Back has noted that the availability of sidechains before the block size limit became a contentious issue could have saved the Bitcoin community a lot of wasted time and agony. Bitcoin Hivemind’s Paul Sztorc has also written about how sidechains could potentially help solve the block size limit issue. The idea is that, with sidechains, multiple blockchains with different consensus rules could exist in the same currency network (bitcoin).

An official sidechains Bitcoin Improvement Proposal (BIP) has not yet been made available, but Bitcoin Core Developer Greg Maxwellstated his intention to have one ready in a few months at the Bitcoin FoundationDevCore Workshop in October of last year. Maxwell also stated the block size limit debate has delayed progress on sidechains development.

Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.