Cøbra — a Bitcoin developer and co-owner of bitcointalk.org and bitcoin.org — wrote an open letter to the cryptoverse on February 23rd calling for Bitcoin’s Proof-of-Work (PoW) algorithm to be changed. His proposed goal? To redistribute hash power from Chinese mining company Bitmain.
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Cøbra: “A New Hybrid PoW”
Does he, or doesn’t he exist? Former Blockstream CTO Greg Maxwell has previously called Cøbra the “non-existing” Bitcoin developer, whatever that spooky estimation means.
What is clear, though, is that whoever Cøbra is, they’re opinionated and certainly don’t mind stirring the pot in the cryptocurrency space in order to defend their ideas.
That’s precisely what’s just happened, as Cøbra’s released a new open letter to the Bitcoin community advising that the original cryptocurrency shift to a new consensus algorithm — a suggestion that’s sure to ruffle feathers:
“We don’t want our transactions being decided by the Chinese government. The solution is to adopt a new hybrid PoW system, possibly with a PoS combination, and choosing algorithms that are very easy and simple to build ASICs for. The playing field needs to be even again, and structured in a way where it’s harder for one entity to dominate it.”
And when Cøbra speaks of “one entity” here, he is clearly referring to Bitmain. Let’s dig deeper.
On Cøbra’s Concerns
There’s no shortage of idealistic debates in the Bitcoin community, but changing the coin’s PoW algorithm hasn’t been on most users’ radars. To that end, it’s a herculean suggestion from Cøbra, so he must feel quite strongly in his convictions in order to take this argument public.
And, as laid out in the letter, “feels strongly” is perhaps an understatement regarding Cøbra’s concerns with Chinese mining powerhouse Bitmain.
In his remarks, Cøbra points out the growing power of Bitmain in Bitcoin’s network, arguing that it’s an increasingly vulnerable point of centralization:
“As long as they control the majority of the hash rate, the only way to keep the network secure is the threat of a hard fork to a new PoW, but this will only work for as long the community is reasonably small and still overwhelmingly shares the same morals for a decentralized Bitcoin.
In a decentralized system, we shouldn’t be put into a position where we rely on a centralized point of failure to behave themselves. People talk about “new entrants” to the mining scene, but it’s almost impossible for anyone to catch up to the total domination of the mining space by BITMAIN. They are light years ahead. That $4 billion dollars of profit will be used to build even better hardware, allowing them to further dominate mining for the foreseeable future and likely buy stakes in their competitors.”
Alas, in essence, Cøbra’s primary fear is that Bitmain has the power to singlehandledly and decisively manipulate the network.
“The Mining Problem”
In his conclusion, Cøbra dubbed the predicament he was setting out the “mining problem.” The developer seemed to charge miners in general with being nefarious political agents:
“This mining problem is the root cause of all of Bitcoin’s problems. It’s the miners that have supported every hostile attempt to take over the network. It’s the miners who block new features for their strange political agenda. It’s the miners who lend support to altcoins that undermine Bitcoin. We need to get rid of them while we still can, they’re no longer a useful part of our community. Hard forks are scary, but let’s not be afraid to at least try to build consensus when we can all see the problem right in front of us.”
Bitmain’s Jihan Wu Responds
Bitmain co-founder Jihan Wu wasted no time in firing back against Cøbra’s open letter. On Twitter, Bitmain’s de facto face threw the gauntlet down, obviously taking the developer’s remarks as a threat against Bitmain itself:
That is cool. When you achieved it, Bitcoin's market share in the cryptocurrency will fall under 10%. Good luck!
— Jihan Wu (@JihanWu) February 24, 2018
No. While Ethereum is discussing erc20's improvement proposals and lots of other new blockchains are testing aggressive innovations, https://t.co/ctxPvcMUu9 controller is busying with political games like change PoW, the future of Bitcoin looks not good.
— Jihan Wu (@JihanWu) February 24, 2018
Breaking It Down
A hard fork to specifically spite the power of Bitmain seems foolhardy, even if decentralization is the expressed goal.
That’s because regardless of what changes were made to Bitcoin, Bitmain could spin up new algo ASICs within 60 to 90 days.
And, if Bitcoin happened to go full Proof-of-Stake (PoS) like Ethereum is currently attempting, then it’s Bitmain — who have a trove of coins — who will benefit greatest.
Besides, one can easily argue that Bitmain’s operations are economically incentivized to see bitcoin succeed and breach into the mainstream. The company did, after all, generate revenues upward of $3 billion USD in 2017.
What’s your take? Do you agree or disagree with Cøbra? Why? Sound off in the comments below.
Images via NY Post, Twitter