Topic: Hypothetical ETF disaster hardfork (Read 816 times)

As mentioned before, I hardfork can't be "forced" because of centralized bitcoin supply. They would need to own the miners to force a change such as this.

How can you hardfork "by accident"? At least if you are not a miner yourself?

If you are an economic node (like the BTC custodians are) then you will need a lot of effort to reach the goal of an alternative implementation to reach your goal (pay developers, start a campaign to bring miners on board, start another campaign to explain the hardfork to your customers and try to convince Bitcoin idealists too) before you can even try a hardfork. So this is quite a complex endeavour and cannot happen "by accident".

In addition to what ABCbits already wrote: I think if a "hardfork war" possibility emerges eventually, we will see a lot of discussion in the community. There will be campaigns from both sides. A side will win if they have the better arguments about the economic value of Bitcoin. And immutability is one of Bitcoin's USPs.

A "class action" cannot do anything in Bitcoin's ecosystem. It will affect only a country or group of countries (let's say in the EU), but Bitcoin is international. Would e.g. Russian miners abide to a class action on an US court?

blackrock does not have access to the coins........ coinbase does.. thats the point of custodians
#not-your-key-not-your-coin

I'm starting to wonder how secure this is. Many exchanges have been hacked in the past. Given enough ETFs with enough people with inside access and enough money to be stolen, at some point an ETF could be drained on-chain.

Bitcoin supposed to be permissionless, so we can't stop those people from owning Bitcoin. Bitcoin community never like hard-fork, so it's obvious such hard-fork will face tons of critic or rejection. I also doubt they could show argument to sway portion of Bitcoin community into keeping their forked coin alive.

When I started this thread I wouldn't have imagined ETF inflows being this high. Looks like Blackrock is determined to become one of the biggest holders in Bitcoin. To me it is clear now that what I said will happen sooner or later. Either by accident or in purpose, we will see some sort of hardfork attempt by the ETFs that are US based, perhaps forcing any other US soil hosted custodian to follow, very likely actually, they then will try to do an ESG Bitcoin fork or what have you. It is just a matter of time. The question is, how will the community react to this. We are letting in a bunch of people that will not care about the consequences in the network, they will just want their money back. Best case scenario some sort of class action is done against them and the conflict is resolved, if not then it will be another Bitcoin was as seen in previous hardfork episodes were all attempts failed.

I remember that, Gavin said Mike Hearn would be the benevolent of Bitcoin XT:

https://coinjournal.net/news/gavin-andresen-mike-hearn-will-be-the-benevolent-dictator-of-bitcoinxt/

I think Barry Silbert was always on board with some hardfork business at some point, which is now selling his coins to Blackrock basically with the Grayscale outflows going to Larry Fink. I think this will end up in another hardfork battle between ETFs, and Fidelity may be the only one to be trusted (if I were to trust one, which I don't).

They will realize it once it hits the media.

I don't think so. They won't create "Bitcoin Fork #2987 ETF", they'll just sell Bitcoin Fork #2987. The dividend infrastructure is pretty standard for brokers, so it shouldn't be too hard to deal with.

I'm not talking about past forks, I'm talking about future forks. Past forks are irrelevant.

I'm pretty sure someone has thought about it, and decided keeping the money is the easiest solution.

You have a good point but that again proves that Bitcoin ETFs are not meant for advanced users, it's meant for those who want to buy it easily without taking the responsibility of holding on their own. I think that half of Bitcoin ETF users have no idea about hard forks and another half probably understands that they won't be able to claim forks.

Doesn't the ETF of each coin need to be approved? Approval of Bitcoin ETF doesn't mean that its forks like Bitcoin Cash, Bitcoin SV, BitCore, Bitcoin Gold, and others are automatically approved as ETF.
I think that no one has thought about how the claiming of forked coins would work in the crypto ETF world.

That works, as long as users are dealing with Bitcoin. Now imagine an ETF holding a million Bitcoins in the future: "withdrawing" all Bitcoins means selling them. The Bitcoin market will crash hard, and boom again when they buy back after the Fork.

I guess we're going to disagree on this. A Fork is like dividend: any other ETF takes care of the dividend for it's users, and in exchange they charge their users a "fund fee".
Here, different (stock) brokers advertise with "dividend leakage": depending on how they deal with taxes, you may or may not be able to get back the paid dividend tax. That's a difference of about 0.1-0.2% per year, and it makes a huge difference in the long run.
It's probably a matter of time for Bitcoin ETF brokers to offer something similar: if one Bitcoin ETF keeps any "Fork dividend" for themselves, and a competing ETF gives it to customers, the latter will be more attractive to the informed investor.

I think that companies won't mess with forks if there is not a huge support on the fork, they'll follow the one that is the most supported by the network and the people, e.g. the default Bitcoin. It will simply ruin the situation for worse for absolutely everyone. They already have some control and that's all that matters for them, here we have blockchain analysis companies and miners that might filter transactions. To my mind that's all they wanted.

When there was a Bitcoin hard fork in 2017 and BCH was created, I remember that many casinos, exchanges and other companies were suggesting people to withdraw bitcoins during the fork because they weren't supporting the fork. Then, after some months or probably after a year, everyone did it differently, they donated people with Bitcoin Cash that was equal to their balance.
I think it isn't and shouldn't be their responsibility to take care of every fork and they won't do that because then they will have to approve the ETF of that fork, just my two cents.

I don't think this will force miners to do anything. Some will mine Bitcoin, some will mine whatever Fork they want.

I think it would have been better if their terms would say the value of any potential Fork is added to the total ETF. I get they don't want to deal with each worthless Fork. I can create Bitcoin LV (Loyce Vision) today and nobody cares. That's okay. But if a Fork has value, they should not just choose the most valuable Fork, they should sell the other Forks and pay dividend to the ETF holders.
Then again, I also get that this could become complicated: what if Bitcoin LV is initially worthless, but after 2 years it's worth $42. That would mean they can still sell the Fork, but the ETF holders at that moment are different than the ETF holders during Fork days. So distributing the divident to the right people is complicated.

I believe not. He's merely a CEO who's forced to conform to the rules of the country where Coinbase is located. Wouldn't you as a CEO would like to make your business more compliant? That's absolutely understandable in my opinion.

BUT what Brian Armstrong actually did was support Bitcoin XT, https://medium.com/the-coinbase-blog/scaling-bitcoin-the-great-block-size-debate-d2cba9021db0

Which, tin-foil hats on, he probably thought he could manipulate Gavin Andersen because he will never have any opportunity to manipulate the Core Developers.

He also expressed his disapproval of the Core Developers before, saying that they are the biggest systemic risk for Bitcoin, https://medium.com/the-coinbase-blog/what-happened-at-the-satoshi-roundtable-6c11a10d8cdf#.qaggpgms9

He also gave his support for Bitcoin Classic, https://bitcoinwiki.org/wiki/bitcoin-classic

Bitcoin XT, Bitcoin Classic, Bitcoin Cash - before it became an altcoin - were actual attacks on the Bitcoin network, socially, philosophically and most importantly technically. They wanted to take control, fork Bitcoin, and leave the Core Developers behind. I believe that's their real agenda.

Also notice that Coinbase is conveniently the custodian of everyone involved, except a very few ones that are self custodian. The rest is just a big single point of failure called Coinbase, basically, US government, since Brian Armstrong will do whatever the US government does in order to stay in business. You aren't going to get anywhere without their approval. This is not great for BTC in terms of decentralization. I guess other nation states will eventually jump in and the different agendas between parties will allow for some macro decentralization where they aren't all on the same page. This would split BTC into different coins for different states and the outcome is not predictable. Im hoping the community of individual holders will not align with any of these and dump on their chains when they receive their split.

But that's actually the problem, isn't it. The Cabal probably WANTS to start a hash war in order to make their fork "officially" the "real fork". They won't only need the miners, they will need the support of Bitcoin services like Coinbase, some influential community members, and the support of at least one Bitcoin Core developer.

- We should probably be suspicious if BlackRock starts donating money/giving grants for Bitcoin's development. Open source development of the biggest decentralized money network + donations/grants to the developers should probably not happen?

This is from Blackrock's filling. I assume all other ETFs have a similar take? It is a sort of a disclaimer. "We cannot guarantee that this is the most valuable fork if it splits". Of course you got to realize that all of these are under US jurisdiction, so the government could step in and say, "make this or that fork as the legally abiding one". And there you have it, now all exchanges and miners are forced to mine whatever UScoin fork. This is the problem with the ETFs. Back then we had separate entities as big holders, now all these ETFs will centralize a big stack on the same hands. The only hope would be that big whales dump on UScoin fork as everyone would get a split of each other coins on both blockchains post-split and cause a crash on USfork. But you would also need to get miners out of US jurisdiction reach. I know companies like MARA are expanding overseas but they would still be subject to US jurisdiction, and im not sure if UAE would be any better (they are doing some business there).

So invest in the company that created the Bitcoin ETF instead of investing in the Bitcoin ETF itself Or do what they all try: create your own Bitcoin ETF.

I don't agree with the conclusion you are trying to make. This document is not saying "they'll force a fork", it is just clarifying what they're going to do in case of one. For example in case 2017 is repeated where dozens of bitcoin forks are created, they basically tell their investors that THEY are the one deciding which one the ETF represents. That means they could decide that Bitcoin Diamond is the real bitcoin and reduce the price down to a fraction of a dollar and also sell the rest of the coins (bitcoin and the shitforks) and pocket the money with their investors having no right to any of that money

I wouldn't say it is impossible but that requires their control over a significant amount of bitcoin which they would dump on the market trying to crash the value of the other chain while having a significant amount of money to keep the value of the shitfork up. It also others not reacting to this maliciousness, and we already know how much shitforks like bcash are worth since people keep dumping them...

Kind of like what Ethereum guys did with their fork, they crashed the price of immutable ethereum called ETC while pumped the price of mutable ethereum called ETH. But they owned 70+ million premined coins and millions of dollars at their disposal in a much smaller market.

If they get away with that (after numerous lawsuits), they don't need to start a hash war. They can just sell the "not Bitcoin" they own, and if that happens to be the most valuable chain, it's pure profit for them.

What they said in their proposal, very clearly, is that they have the right to choose which fork they consider "Bitcoin". It won't necessarily be the fork with the highest value, or the fork what the community considers Bitcoin, or what their ETF holders consider "Bitcoin", OR what ANYONE ELSE considers as "Bitcoin".

They are their own entity giving themselves the power to consider which fork will be "Bitcoin". They can use that to start a hash war in my opinion.

I don't worry too much about it, because of the "in good faith" clause. Not that I trust them, but I trust the American claim culture enough to know it would end up in a lawsuit if they screw their customers.

I raised that same concern before, but only a few wanted to share their thoughts and opinions.

That part in BlackRock's proposal is dangerous because they, and the rest of the "ETF Cartel" composed of their fellow asset managers, could come together with a combined holding of more than 50% of the total supply in the future. I believe with such amount of the total supply, they could push their weight on the network and they might start making demands on what path of technical development Bitcoin should follow. Possibly start a hash war.

That's probably a Doomsday way of looking at the situation, but perhaps that's the right way of looking at the situation because there are bad actors everywhere.

Whoever write that is stupid. They should choose all forks which have running network and doesn't have very low exchange rate. Although rather than attempt to control the network, IMO it's more plausible they want to rip-off ETF buyers.

Who is "the Sponsor" in this?

Even if they act in good faith picking the correct chain, I'm missing details on what happens to the value in a possible Fork chain. When the BCH Fork happened, the value of the Forkcoin varied, but could have been sold for 10-20% of the Bitcoin value. If they keep that instead of sharing it with the ETF investors, it just adds to the list of reasons to keep your own keys.

To me it seems evident at this point that all the ETFs are is an attempt to control the network. They want to centralize the supply in the hands of a few actors (ETFs) which are ultimately all the same hand at play (the US government in this case) which then will proceed to attempt to fork the network for whatever agenda that is trying to be meet with that. It is literally on the documents:



So while this may be bullish for the price now, we'll see how this turns out eventually when shots start being fired.

I can imagine a scenario where there is a contentious MASF, and popular Core developers insist this is an attack on Bitcoin. Economic nodes like Coinbase could attempt a new idea called a User Rejected Soft Fork (URSF) that will invalidateblock any blocks with upgraded transactions.

While a URSF is called a soft fork, it is actually a hard fork because it breaks the heaviest chain rule. Then suppose Core officially releases a real soft fork update, without the code from the other soft fork. This is still a hard fork.

The nodes that never updated have already confirmed the blocks, so any attempt to block a soft fork with 51% hash power is always a hard fork.

BlackRock says if there is a fork, they will decide for themselves which is the real Bitcoin. So imagine one soft fork gives us global scalability and privacy, but BlackRock wants an expensive rock that does nothing. While I don’t think BlackRock could single handily crash Bitcoin’s price, they could choose the rock and adequately effect the price enough to invoke fear.

As of today...
Yellow light: I would start being concerned if one entity held 431k BTC (2.2%).
Red light: Any entity or cabal that could liquidate 1,600,000 BTC (~8% of the circulating supply) at the drop of a hat makes me think BTC is not the market to be in.
Get off the road: Any one entity that owns 6,860,500 BTC (35.01%) makes me consider BTC to be functionally centralized and a complete failure.

Reasoning:
Yellow light: Practically speaking, when should we start being concerned? I would say if any one entity owns enough BTC to fill the current open interest, that would be where I'd start being concerned. Right now that's 431,000 BTC.

Red light: When is Bitcoin potentially failing its vision? I would argue that any time any one entity owns enough BTC to cover the highest daily traded volume over the last month plus all current open interest (OI is currently around $18.3b), that is concerning. To me that seems like they could then completely collapse the market at any time. Based on where things stand right now with OI at $18.3b and the highest daily trading volume in the last month being around $50b, any single non-regulated or government entity or cabal owning 1,600,000 BTC or more makes this an extremely serious concern and makes me question if Bitcoin is failing. That's around 8% of circulating supply.

I would be slightly less concerned if ownership was in the hands of entities that can only survive and thrive if BTC keeps running strong.
I will say non-governmental regulated entities that are unable to practically divest their full supply of BTC at will would be less concerning.
Government actors possessing 431k BTC or more seems contrary to the purpose of BTC. I'm torn on whether government possession of BTC that is slated for sale as part of forfeiture for illegal cabals should be included or not, but lean toward "probably".

When we're done: I think the obvious starting point is 50.001% circulating supply is clearly too much to be in the hands of any one entity, that would give practical market control, since selling that much quickly would completely crash the market, liquidate speculators, etc. and refusing to sell that much freezes the majority of the market based on the decisions of one entity. That is completely centralized at that point.

If we take the assumption that 30% of BTC is functionally lost, then we'd have to bring that number down to 35.001% of circulating supply could theoretically have practical control of the market.

What's the threshold for Bitcoin to start becoming "that scenario"? How much of the total circulating supply must be in the vaults of a cabal of banksters/asset managers before we could say that Bitcoin is failing?

I have asked the same question before and made a topic about it, but it never had a direct answer, with most of the replies were dodging the issue.

I'm not sure how anyone could write laws that force bitcoin developers/miners to do rollback plans or anything else. The jurisdictional nightmare of trying to force compliance would make the point moot. I'm pretty sure if a any city/state/country tried, Argentina and maybe other countries would come out with a law that made it illegal to comply...

What type of control would they want to gain? It might be beneficial to examine gold's history, as both BTC and gold share some economic attributes. Gold has always been legal to mine and own, but there was a time when it was illegal to own and mine BTC. Then, buying gold became legal, while mining was restricted and heavily regulated.

While I haven't worked for any government or held a position of high authority, I can make a safe guess about what most governments have in common:

-They want to monitor your every move, including everything related to money.
-They aim to keep you as busy as possible, making life difficult and ensuring you stay at work or in transit for as long as possible, essentially keeping you financially restrained.
-They seek to increase the labor force, possibly pushing for more people to work. This could explain certain societal shifts(feminism and shit), and the emphasis on everyone working, even at a young age.

So, how does BTC impact any of that? BTC doesn't make everyone rich; it's only a handful of early adopters who were fortunate to accumulate BTC at a low cost. The number of people who would become wealthy from simply investing in BTC won't be large enough to disrupt any government. Therefore, BTC is unlikely to significantly impact points two and three above.

Is BTC private? No, it's not. Governments understand that, and the public ledger is a valuable asset for them. What they fear is the use of privacy tools that make tracking more expensive and potentially impossible. Hence, efforts to take down privacy enhancement tools and potential future requirements for users to KYC outside of exchanges, possibly even for wallet usage, all wallets need to impose KYC or be deemed illegal.

When that time comes, what do governments expect from their citizens, or what should we expect? The majority of people will comply because they are in BTC for wealth, have no issue with KYC, and are willing to share information with the government if required. The minority valuing privacy will be treated as outlaws and potentially terrorists.

It will become a matter of who gives up first. I recall a childhood memory when people woke up to a new law declaring firearms illegal. They had 7 days to turn in their guns or face serious consequences. Most complied, standing in line to surrender their firearms while expressing frustration at the government's decision  . However, a minority held onto their weapons unlawfully for 15 years. The government eventually changed the laws, requiring a firearms permit or an offer to buy those firearms at a premium. Buying guns remained illegal for citizens, but those who didn't hand in their weapons 15 years ago were not pursued unless a gun was found under their car seat for example. Laws changed, but people are still the same, the strong ones still have their weapons at home and the government can't do shit about it, or they have sold them to the government at a very high price (I recall they paid a few years worth of average salary for small arms like pistols), the weak gained nothing and probably most of them are already dead shaming themselves under the dust.

Governments have deep pockets and long reach, but they don't possess God's power. If they decide something, it doesn't necessarily mean it must happen. Sometimes, a small group of brave citizens can bring down an entire regime. Bitcoin might face a similar fate; the weak will comply, and the strong will resist until they end up in jail or forcefully secure their right to privacy and anonymity, so ya, it's going to be a long interesting journey for everybody onboard.

In addition to Synchronice, even if we assume that governments do not share interests, each one can take it over for their people. The communist party of China forbade using Bitcoin. US followed by funding surveillance programs and is a matter of time until trading peer-to-peer or using bitcoin outside a KYC exchange becomes forbidden too. EU, same. Sure, Bitcoin isn't "destroyed", but governments have developed effective measures to control it.

You can name any of them you wish, US, EU, China. They have a common interest that unites them all, governments want monopoly in every country. Look at governments like a group of criminals. In every country, there is a group of criminals that can ruin any rule they want but still get protected by police. Governments and their big (under shadow) supporters want to launder money back and forth, to avoid paying taxes and to control their citizens. So, when these people from the US/EU/China, etc, see that Bitcoin and some altcoins give possibility to average Joe to do things without their involvement, they start to unite for one major thing, to trace transactions and make things visible for them. In the end, they all have their own interest and that might lead to decentralization again but that decentralization will not be a decentralization for average Joe because each government in every country already restricts average Joe. The task just moved on another level.

Of course they will gain full control over BTC I give it under 32 years.

But I have often been wrong.

@Synchonice is not wrong. If governments and financial institutions have their way they will own it instead of destroy it because underneath all those disguises they know what Bitcoin really is and what it could still be and they're too greedy to destroy something like that. But since they can't own it and control it the best course of action is to fight it.

But just like you pointed out, no single government can claim it even if an entity could claim ownership of Bitcoin (I don't know how possible that is). Everybody wants it. China wants it, The U.S. wants it, Europe wants it, and the biggest banks and other financial institutions want it, so who is going to be in control of it and own it since they can't all own and control it?
They're so busy fighting each other on relatively smaller things, what do we think will happen when they all try to acquire something as grande as Bitcoin?

Vitalik hyped a centralized shitcoin that abandoned it's one USP ("code is law") the instant it was convenient for the rich creators. You can't compare that to Bitcoin.

Even if ETFs hold 99% of all Bitcoins in the future, I expect several competing ETFs to all have a fair share. Just like several mining pools have a large share of the market.

We'll get Bitcoin ETF (BTF), and normal real Bitcoin. One will be fully centralized and regulated, and one will be Bitcoin.

Which governments and financial institutions? US? China? EU? BRICS? Bank of Japan? JP Morgan? HSBC? They'll all have their own interests, which will lead to decentralization again.

I think that there will not be any devastating disaster. They might try to test their power and influence but it doesn't mean they'll ruin the things if they are not 100% sure and even if they ruin, they'll be the only losers because Bitcoin is not the universal cryptocurrency, there are some other altcoins that can carry the weight that Bitcoin carries on their shoulders. For example, Monero. I bet this coin is going to become what people wanted Bitcoin to be.

To be honest, I think that the strategy of governments and financial institutes is to not destroy Bitcoin but to take it over. Imagine, the development of blockchain analysis companies will give them the possibility to track transactions easily. What's the next step? To push miners to accept regulations and confirm transactions according to the blockchain analysis firms, i.e. it will get censored and miners will reject transactions that BA companies don't want to be made. This will easily be possible, just build another hype about how Lazarus launders billions of dollars and how all the war and illegality is funded via Bitcoin, people will believe it and there won't be massive protest (but they'll happily use JP Morgan).

So, there is no necessity of disaster hard forks or something devastating. Just take it over, keep it in the corner like cat keeps mouse and that's all. They won't do anything dramatically terrible because there are billions of investments into Bitcoin, there is a huge sum of money made, they act very smart. They shout Massive Adoption, bring regulations and people are happy.

Agree. For this reason, in my posts before I clarified that there has something more to happen for this attack to succeed: the community becoming indifferent about the "values" of Bitcoin. And then, if the "top influencer club" moves slowly away from Bitcoin's original values it could become an attack vector.

Isn't really what I wrote about. I believe the Blockstream-Bitcoin model (paying devs to maintain an open-source software project essential to the company's business model) is similar to the Google-Linux model for example and thus completely legit. I only mentioned it because it shows that a company can definitely afford to pay high-profile Bitcoin devs - the "top influencer club". And I wanted to emphasize that if something similar happens with a company with values not entirely compatible with Bitcoin's, and additionally the community not caring about these values anymore (because all they want is BTC going to moon ...) then it could become dangerous.

With your last sentence I agree though.

I don't see it that way. Without real authority over Bitcoin, popular devs are just members of the top influencer club. And their values must align with the values of Bitcoin. Otherwise it would be like running for president of the US while wearing a North Korean flag pin. I think if devs want to stay popular, they do what the community has committed to their values.

As I understand it, the Blockstream conspiracy is about the Bitcoin Cash community being butthurt about the Bilderberg Group aquiring a company (supposedly) soley dedicated to Bitcoin. And they are going completely insane and claiming that Bitcoin is now somehow being taken over because they already had a conspiracy theory about Bilderberg and this new conspiracy theory about BTC, which builds on top of the first conspiracy theory about Bilderberg, somehow proves the first theory and therefore also proves the second one.


I mean the amount of effort it would take to attack Bitcoin is much different than the amount of effort it would take to attack some random unpopular altcoin (based on a clone btc blockchain). And even then, the damage would be reversible.

The more decentralized something is, the more secure it becomes.

Some Bitcoin Core devs are already on payrolls of Bitcoin service providers (Blockstream being probably the most well-known example). When we talk about developer influence on the public opinion in the community, then quality -- i.e. that these devs are "respected voices" -- is also more important than quantity. I believe from the current Bitcoin Core team nobody would agree to a rollback. But it's perfectly possible that a group of new developers in the coming years gain influence who don't consider immutability as that important anymore. If some of these devs are perceived as "the voice of Bitcoin", like people like Greg Maxwell today, then a handful of them could be actually quite dangerous.

Just to be clear: I don't consider such an attack likely, only possible. I think there's a high likelihood that we'll never see such an attack. But the community should be aware of the danger (see also my answer to HeRetiK below).

There isn't such a "number" or "limit". All decentralized systems can eventually degenerate. Bitcoin has however fortunately a quite good balance between powers, so the probability of a successful attack is much lower than it was in Ethereum where the rollback finally occured quite fastly.

I agree, fortunately in the present and probably in the coming years such an attack seems highly unlikely.

I think however that this may change in the future if certain developments materialize, like a growing dependance on centralized providers (be it ETF operators or our good ol' exchanges, doesn't matter) and possibly if the connection to the cypherpunk movement and other groups which were essential for highlighting and defending Bitcoin's qualities like censorship resistance is lost. Thus the community should be aware of these dangers.

There's an (imo erroneous) belief that Bitcoin due to its current qualities, or software-related characteristics, is completely immune to such attacks. Bitcoin is a social system, and thus can be deeply changed and harmed if changes in the social composition of the community and its "values" change the way people perceive what Bitcoin should be. The Overton window thus could change in the future. I honestly was myself a bit shocked as a highly respected member of the German subforum once wrote here that he considers a rollback scenario quite likely (I hope he was wrong there).

In general I'm optimistic though.

True, but fortunately the Overton window for making a Bitcoin blockchain rollback acceptable seems far, far away.

I'm not even sure what kind of apocalyptic financial loss event it would take to nudge the community's openness towards a rollback in the slightest. Even with Ethereum it took something the scale of the DAO hack; and even then it wasn't entirely uncontroversial and would have had a good chance of failure if it weren't for Ethereum's heavily centralized leadership.

Care to elaborate how an ETF helps on adoption? To me it rather seems as a tool for investors to not care about custody and regulation. It's just a little better than Binance's BTC IOU.

You make it sound worse than it should. If corporations manage to persuade Bitcoin Core developers to adopt a specific roadmap, they would likely succeed in convincing the broader community of its merit. In the event that Core developers receive compensation for a hardfork, they would need to persuade others to embrace the fork, not just themselves.

Why are you thinking about ETF's? Have you forgotten that Bitcoin is not an ETF? And neither is it Ethereum (thank Satoshi!)
ETF is just a very important tool for more Bitcoin adoption.

Your disaster scenario is impossible, as many others have already pointed out in detail. No further need for explanation. Bitcoin is awesome, decentralization is awesome. Blockchain is super awesome.  


I think you might be underestimating the scale of the attack. The amount of payroll money alone.... How many people would you need to put on the payroll and for how much money? How decentralized does something have to be to make it 'technically impossible' to attack in such a way?

Actually I think the scenario described in the OP is perfectly possible if enough custodial Bitcoin services (ETF companies, exchanges etc.) collude and the community is so indifferent towards Bitcoin's original "values" that it accepts it.

Developers on a payroll can be an element in such an "attack". Not because of the needed skills for the code changes, e.g. to roll back a transaction (I think that even I could do that, even with VERY limited C++ knowledge), but because of the influence of renowned devs like the current Core group on public opinion in the community. We've seen that already in the block size debate. I think if most Core developers hadn't taken such a strong stance for Segwit and a restrictive block size policy, then the current "Bitcoin" could actually be BCash or even BSV (which in my opinion would have been a much worse outcome).

Miners will follow the chain where they believe the value "is at" - if there are several options, they'd chose the one they think the community as a whole would pay more money (or other values) for a coin. Here, colluding services providers could be a big problem, not only because they directly demand Bitcoins, but also because they have also influence over the community's "collective opinion", above all over the more indifferent part of the Bitcoin users - those who only want to invest in Bitcoin and don't care that much about the deeper qualities like immutability.

However, if there are enough influencial voices in the community insisting exactly on these "deeper" qualities, then I believe the "attack" would fail, like BCash failed.

You don’t have to worry about this kind of attack. The worst thing these corporations could do is convince Bitcoin Core devs to argue about every soft fork so that Bitcoin is ossified and cannot scale. Or maybe use Core devs to convince us a certain soft fork is too dangerous, when it’s the only possible way for Bitcoin to globally scale and have truly private transactions.

They will not be able to force the "world" to change the protocol just because people in some country got angry after missing out and some politicians in that country wanted to do some crap. Bitcoin is too global for that.

You are right for being worried about ETF, but I'd be more worried about market manipulation and how centralization is slowly infesting the Bitcoin world. ETF is just one of the small signs of it. Not to mention that I'm more worried about some form of fractional banking starting in this world (ie. when the centralized authority that holds the funds only has a small fraction of what they are giving people). They could easily end up selling 42 million bitcoin to idiots who buy their centralized IOUs (in case it isn't obvious bitcoin supply cap is 21 million).

I think you overestimate both the amount of retail investors that will get into BTC through ETFs and the power that voters have on policy-making. Bitcoin has faced (and is facing) much more adversarial situations from both within (e.g. the blocksize debate and subsequent fork wars) and outside (e.g. accusations of money laundering, fraud, wastefulness); so the threat of a "rollback campaign" due to a financial loss event is imho miniscule in comparison.

What I do believe we need to be more vigilant about when it comes to Bitcoin ETFs is a kind of regulatory capture. If ETFs become the main way people invest in Bitcoin you can expect further steps that will make the private ownership and transaction of cryptocurrencies more and more legally precarious. That is to say, while ETFs may be a way for Bitcoin to get deeper into the mainstream, they may also result in Bitcoin and other cryptocurrencies being engulfed in the tradtional banking system to the point of uselessness, even without changes to the code or enforced rollbacks.

The big problem is as the mainstream (voters) get into BTC through ETF and other user friendly products, that means potential voters losing money that turn into pissed off costumers at BTC, which start demanding changes on the code. Politicians will do whatever it takes to collect ballots, so if there is a big movement of angry people that want to change the BTC protocol for whatever reasons, that's something to consider.

There may also be a big chunk of the population mad to see others getting rich from BTC, and start demanding that mining is banned and whatnot. Consider that people like AOC could become presidents in the future. If they get a real chance to ban mining, they will try.

BTC should wake up from this ETF euphoria one day and realize it is an adversarial asset in nature, and must be ready for that.

It is like saying someone will trade the oxygen in their lungs for another chemical element that "might" be more efficient, it either works great or you die.

This might be a bad exaggeration but as someone who has spent almost everything I have on my mining business, I would not take the smallest risk for burning that down, reflect that on others who invested more than I did and probably have debt to pay, nobody in their right mind would risk damaging bitcoin in the way you describing, ya a little more profit for some thing "unethical" is always expected, aside from that, it won't happen.

The main major aspect of Bitcoin POW security is that miners will always try to protect BTC from such attacks that could deem bitcoin worthless.

There is one big difference here. Nobody thinks Ethereum is decentralized to begin with. Sure, when they hardforked, Ethereum Classic was born, but who gives a damn about Ethereum Classic?

Ethereum is a premined, centrally controlled cryptocurrency, which is now even worse with their Proof-of-Stake model, operated by Vitalik and his rich friends. Apples and oranges with bitcoin.

Many Bitcoin developers are already sponsored by various companies so they won't need the donation money coming from an ETF fund. Besides, a hack doesn't always have to result in an attempted hardfork. I mean look, Monero's development fund was hacked somehow and they didn't try to roll back the chain like the Ethereum folks did. So why assume that everyone will be like that.

I should have said miners and developers. Of course you need the hashrate too, but that can be bought. If ETF-BTC can promise higher valuations, miners may follow, since they are economic actors that seek profit. If the majority of economic activity is happening on ETF-BTC, they may get more from the fees in there. As far as developers, we have developers fucking with our money in the form of Ordinals already. They could also buy people like Elon Musk type PR to pump their hardfork. They could also buy lobbysts to pass laws that outlaw non ETF-BTC for enabling money laundering or whatever. Im sure that's their long term goal with all of this actually. Does anyone seriously think they have approved ETF's if they don't think they can use it to control BTC? Their motto has been "We'll tame Bitcoin" for years now. This is all part of the plan. The question is, if community of actual BTC holders will fall for it. At the end of the day, in any hardfork both sides get shares of each token, so we'll see who dumps on who.

Bitcoin blockchain has never been rolled back like Ethereum blockchain. It is one of big factors make people to believe in Bitcoin.

ETF, VanEck cause Bitcoin hardfork, it sounds too much exaggeration about impacts from VanEck.

Recent months, if you follow the Bitcoin blockchain, its mempools and read reports, you know the biggest problems are from Ordinals, BRC-20 tokens and Inscriptions. They cause mempools become bigger and bigger and transaction fee becomes more expensive.

If any hardfork happens, it will be to resolve Ordinals annoying issues on mempools and transaction fees.

Inscriptions, mempools and miners

Unless those developer willing to lose their reputation on Bitcoin community, they won't participate on such campaign.


I expect we'll see another community split where new forked coin is created. Although looking at ETH and ETC split, we can't be fully sure Bitcoin which doesn't implement rollback or other major change could remain most popular coin.

In a scenario where almost nobody owns bitcoin and things have gotten this centralized, we can say with confidence Bitcoin is already dead so who cares what happens!

They'll need to get high percentage of the hashrate on their payroll and a high percentage of the community that includes full nodes, bitcoin users and the economy built on top of bitcoin.

Immutability is one of the fundamental principles of Bitcoin, people aren't gonna give it up that easily.

Nothing, core devs can't do rollback/reorg on the blockchain, only miners can, rollbacks are super expensive (usually cost more than whatever benefit you get from it) and miners who invest their hard-earned money in the space won't even risk going that route, Binance lost 7000 BTC (worth 40M $ at that time) and they didn't get away with a tweet that mentioned the word rollback, let alone trying to actually push that.



That won't be possible, the majority of BTC is already in the hands of the people, what's left of it or what those large corps can buy will likely never make a majority, if that happens it means they must spend unrealistic amount of money to acquire them, and if they do -- they would be very careful when attempting anything that might hurt bitcoin and thus hurt their pockets.

IMO, we should not fear those who have skin in the game, people are always worried about miners doing some nasty shit to BTC which is a stupid assumption given that miners have the most skin in the game, others are worried about core devs (many people already claim core devs are controlled by Blockstream "or is it someone else today"?, to me, all of these entities have skin in the game and have more to lose than to gain if they decide to do anything stupid, if there is anyone we should fear would be those old farts in the government.

I was looking for some ETF news and apparently the VanEck one will pledge 5% of earnings to "Bitcoin core developers" during the next 10 years from the money they'll make on fees.

I imagined an hypothetical scenario where there is a massive hack or some sort of a disaster scenario where there are massive losses, and now those same good samaritans that are funding developers start pushing a campaign to engineer a rollback of the blockchain Vitalik style. What would happen? If in the future ETF holders become the 99% and 1% are self-custodians, then it will be on their interest to push this agenda. What if they have enough % of developers under their payroll, and enough people supporting it because they lost their money, and start pushing for a hard fork? What would be the game theory outcome scenarios at play here?

This could be applied to any other narrative to come up with a hardfork. Like, BTC pollutes the environment, let's go to PoS, or this and that. But the one I could see coming, is seeing a massive loss and then angry people wanting a rollback and start campaigning to pass laws that force developers to do this and so on. Most custodians are using Coinbase, but some will be self-custodians, Fidelity being one of them. I expect their efforts to pass such hardfork to fail, but who knows if like I said, most people in the future depend on ETFs and start pushing for laws to "protect investors" that force developers and miners to do rollback plans and so on. This sounds ridiculous now but you never know.