Satoshi’s Vision — Bitcoin Cash Conference

The following is a translation/adaptation/summary from German of a story that appeared in the “Handelsblatt” on March 26, 2018, written by their East Asia correspondent Martin Koelling.

The Summit of the Bitcoin Cash community takes place in a befitting environment: right in the center of Tokyo, the first epicenter of a digital currency quake. From their meeting venue, the more than 400 participants of the three-day “Satoshi Vision Conference” can see the roof of Japan’s emperor’s residence. Satoshi Nakamato was the pseudonym of the person or group that developed the idea of Bitcoin in 2009. And in the building, the participants are now discussing the future of the new digital coin “Bitcoin Cash”, which in August forked from Bitcoin after heated discussions.

The emotions are still running high on this topic. The otherwise sober participants in the hall rejoice when, on Saturday, Roger Ver takes the stage, one of the initiators of the fork. Earlier, Roger, the first big Bitcoin investor was celebrated as “Bitcoin Jesus”. Now he is demonized as “Bitcoin Judas” by followers of the original Bitcoin. His opponents accuse him, among other things, of deliberately misleading investors, pretending to buy Bitcoin cheaper with Bitcoin Cash.

However, the 39-year-old owner of Bitcoin.com, a mix of news site, digital wallet and new currency provider of coin services, dismisses this as slanderous. For him, Bitcoin has changed, not himself. His message has been the same for seven years, he explains to listeners in Tokyo, where he lives for about half the year. He wants to create a decentralized digital currency that will bring more freedom and prosperity to the world.

His speech is more like a sermon, and the free market is his God. “The more economic freedom prevails in countries, the longer people live,” cries the avowed supporter of libertarian ideas. Lots of applause. Education levels are also higher and infant mortality is lower. Again, there is applause. “And Bitcoin and other digital currencies are the best way the world has ever seen to reach those goals.” His followers clap even more intensely.

He peppered his speech with attacks on the creators behind the original Bitcoin, which is often called “Bitcoin Core” in the community. They would want to censor dissenters, to create digital gold instead of a means of payment not controlled by the state, central banks or banks. Everyone will realize that Bitcoin Cash is the real Bitcoin, he surmises. Then comes his appeal to the disciples in the auditorium: Bitcoin Cash will become the currency of the world, Ver shouts out. “Let us all return and spread it in the world.”

To call Bitcoin Cash the winner of the Bitcoin dispute is still a daring forecast. Especially among the hard-hitting Bitcoin supporters, the idea is likely to encounter as massive a disagreement as the person of Roger Ver. And Bitcoin developers can point to the spread of other digital currencies. Although Bitcoin’s market share in the crypto-currency world has plummeted from over 80 to 45 percent over the past twelve months, Bitcoin Cash has been used little.

Holy war among Satoshi’s disciples

However, many investors should not care about the dispute among Satoshi’s disciples. They are concerned with the future viability of their investments. And their biggest problem at the moment is to keep track of things in an unpredictable, difficult-to-understand disagreement.

The South African Brett Scott, who deals with many of the new currencies as a “wandering economic explorer”, understands the helplessness of some followers. “From the outside, it looks as if it is about different readings of the same sacred text.” Only is the division of the spirits, unlike during the Reformation 500 years ago, not on the virgin birth of Jesus or the role of the Pope, but on technical details of Satoshi’s creation. More specifically, it’s about the “scaling debate,” the question of how Bitcoin needs to be changed to handle the rapidly growing number of transactions.

The dispute is essentially about the size of the blockchain, the ledger in which the transactions are entered. Satoshi Nakamoto had defined the “block size” in his white paper as one megabyte. However, at peak times, this size was no longer sufficient to accommodate all transactions.

Money transfers became slow and expensive. At the height of the Bitcoin boom in December 2017, transactions cost $ 45, if you did not want to wait long for an entry in Blockchain. Thus, Bitcoin actually lost the function as a method of payment, for which it had already received the regulatory approval in Japan.

The core developers wanted to maintain Satoshi’s block size and proposed to develop a second transaction layer on Bitcoin using the so-called Lightning network. However, other Bitcoin fans, such as Ver, saw it as an attempt to replace the system of bank and central bank-free payments between individuals with a centralized system.

Instead, the Bitcoin Cash founders proposed to increase the block size to stick to Satoshi’s vision of new, liberal cash. In May, the block size was to be increased from currently up to eight to 32 megabytes. However, critics accuse the forkers of preferring, above all, the great “miners” who are promoting Bitcoin Cash with ever more powerful computer systems. Because larger block sizes also require more computing power.

About the attempt to code the future

The road to a split of the community was lined with evil insults, personal accusations and hurt feelings. “There are really many radicals on both sides”, a neutral visitor of the Vision Conference noted, still shaking his head. But meanwhile the developers on both sides dedicate more energy to the further development of their products. Because on the path to universal acceptance, there are still plenty of challenges for both currencies.

At the conference, the Bitcoin Cash community discusses issues of security and, above all, new services. One of the biggest planned innovations is the use of the blockchain for two things that make the rival currency Ether so popular. For example, developers are considering how to integrate smart contracts — as well as “tokens”, digital tokens that, for example, represent assets such as real estate or company shares.

But many visitors simply want to clarify whether they even want to get into Bitcoin Cash. Chinese miners are here. One who wants to remain anonymous is still skeptical whether he also wants to mine Bitcoin Cash. He has heard that one of the biggest backers, Chinese mega-miner Jihan Wu, dominates the currency with a huge Bitcoin Cash holding. So he wonders if there is enough for himself.

American Lizzie Lacey, a self-appointed development aid worker in Africa, wants to find out if Bitcoin Cash could replace the collapsing national currency in South Sudan. Others are looking for business opportunities or proposals. Some may also return to Tokyo for a Bitcoin Core community conference in October. After all, many interested parties ultimately want to do business.

It is still open how the competition of the monetary siblings will turn out. Nikita Zhavoronkov observes that the use of Bitcoin is decreasing. But the numbers also reflect that Bitcoin Cash, apparently his personally preferred currency, is worth far less and trading less than Satoshi’s older scion. However, Zhavoronkov remains confident about the new creation: “My slides do not look good, but there is some good news.”

For example, the world’s largest currency exchange, Coinbase, launched trading in Bitcoin Cash in December. In addition, more companies are showing interest in Satoshi’s self-proclaimed torchbearers. In addition, there is now a Japanese financial institution, where an entire team mainly develops applications for Bitcoin Cash: the online securities house SBI.

It even sent a representative to the conference, who was allowed to open the three-day conference on Friday as the keynote speaker. The engagement was not an ideological decision, says Jerry Chan, the head strategy of SBI Crypto, the crypto-currency arm of the expanding financial institution. “For us as a company, it is not a holy war, but very simply an economic decision,” tells Chan the Handelsblatt. “We believe Bitcoin Cash is the best public blockchain.”

In his view, the spin-off’s creators suggests have pledged to keep the fees as low as possible for as long as possible through free competition of miners, thereby enabling companies to make profits. With the limitation of the block size of the original Bitcoin reliably low transaction fees cannot be guaranteed.

Ultimately, however, he can imagine that different digital currencies coexist for a long time. Since there are different applications that may be served differently. He also does not believe, like the Bitcoin ideologues, that digital currencies will ever completely replace banks.

Not every person can completely manage his or her own money, as the Bitcoin disciples imagine, he says. But he also hopes that decentralized digital currencies can provide people with more economic freedom . “It does not mean that all people have to become their own bank,” Chan concludes, “but that they can become their own bank.”

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