Why Vitalik doesn’t get hard forks [serious]


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Vitalik claims hard forks to be a superior moral solution. However he is very wrong.

First of all there is a massive difference between bitcoin and ethereum and that is the retargeting time. Ethereum has a very fast retargeting which means that both chains can survive. With bitcoin retargeting only one chain will survive as the other one will experience extremely slow blocks, extremely congested blocks and will take forever to retarget.

At first sight this could be seen as a good thing. However it is a terrible thing. This is because the superficial incentive analysis that has been done so far assumes that holders will vote by selling the worse chain and buying the best chain so that the price of the worse chain will crash into the ground and that miners in consequence will mine the profitable chain.

This would work with fast retargeting, with current retargeting however the slower chain will be so congested it would be impossible to buy or sell anything. But much more than that is the fact that the worse chain could win, not because it has more merit but simply because it may have more hash power.

Why is that? The incentive for the miners to mine the most profitable chain is only true long-term and if there is proper decentralization. Clearly this is not the case at the moment. Are we really sure that the miners wouldn't simply make the choice that give them more power? Won't they accept to give up a few days of profits to get power long-term? The winning chain will be established in just a few days because of slow retargeting.

The idea that miners have some incentive to do what's best for everyone is completely flawed.

Knowing that the retargeting is slow and so the winning chain will be established extremely quickly and the other chain die very quickly to (unlike ethereum were both chains can survive) it would make perfect sense for a miner to do what give him the most power long-term than what gives him the most profit short-term.

We can't let the miners be the only ones to vote and ignore the other stakeholders.

Soft fork is the democratic way to vote, because all stakeholders have to agree (wallets, exchanges, payment processors) hard forks instead are simply letting the miners decide everything. I assume Vitalik had insured that he had the support of the miners before announcing the hard fork. Anyway seems that most ETH "investors" had "invested" in the DAO.

If we want to analyze incentives the only incentive I see is the incentive for Vitalik to destroy bitcoin so that ethereum can grow more. I'm not saying it's his intention simply that he has a strong incentive to do so. Also segwit is really the biggest threat there is to ethereum as it allows smart contracts to be executed as sidechains making ethereum basically useless. I assume Vitalik cannot simply say "big blocks" without destroying his integrity, so he can't attack segwit. He prefers to claim that soft forks are bad and hard forks are good hoping the division will help ethereum. Please note: I'm not attacking the guy and I really don't know him personally. I'm just speculating what would make sense if one looks at the incentives. Since this is all economic theory, game theory and incentives I believe it makes sense to look at the incentives of all the players regardless of what their intentions are since those are unknowable

submitted by /u/itworks123
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