It’s important to have a futures market with any contentious fork in Bitcoin.
Why?
Because the party forking gets what is called the “free call option”.
They can tweet, do long monologue videos about how their fork will win, and how no one will oppose them. They can use company resources to legally pressure miners, post populist rhetoric disassociated from reality (pľēb şľőp) and then… wait.
The activation comes, and they are delta neutral on a fork.
If…
No fork happens - they have their bitcoin.
The fork is successful - they have their bitcoin.
A chain split happens - they get Bitcoin on each side of the fork
See the problem? There is an opportunity cost of time and resources coordinating the fork (maybe reputation too), but that’s it! They can antagonize the network at no cost of bitcoin.
It’s worse than that though, everyone who told them they were wrong can’t even dump their hostile fork if they fail to even launch it.
The actual party who has to put up material cost in a fork are the miners. Since they cannot mine on both chains at once, they must choose where to secure coins. The only publicly stated mining pool position on this fork is f2 pool opposing it (~12% of hash rate).
My proposed on chain futures market requires no ecosystem coordination. The Bitcoin is settled automatically, and in the event there is a chain split, each side gets 2 BTC (each party gets the bitcoin they think will “win”).
A futures market forces actors among the Bitcoin network with different opinions to put skin in the game, price the risk, and act. It presents an opportunity to lock up Bitcoin for a time, and profit as a rational actor if they have conviction in their position.
The market will do this independent of your wishes otherwise. Via prediction markets, on chain, or exchange future markets (any exchange could get fees for swapping the fork to buy more bitcoin). We saw futures markets with the last contentious fork in 2017 when bitfinex listed futures.
If no market forms at all, it shows there are not two sides to the market, I’m here as one side of the market, so we know the side that is a no show.
This kind of weakness is death for a fork. If the side forking is unwilling to burn the ships, and put their bitcoin at risk, they are of low conviction and the fork will fail.
There will be a myriad of reasons as to why people who are so vocal and certain that BIP 444 will activate, won’t bet. To be clear, it’s cope.
Their optimal positioning as it relates to the opportunity to wager is:
1. Ignore
2. Public consider the bet, but to never commit.
3. Hand wave any reason to say the market is either immoral, illegitimate, impractical etc.
Any of these maintains the illusion of strength when they are actually weak. A requirement in fork psychology is to appear as if it’s a certainty, because forking is a game of chicken with the network.
A 1:1 ratio implies a 50% chance likelihood to succeed, far lower than they’d have you believe success is.
Additionally, to counter offer with a differnt ratio/odds gives up the game. They blink, show their hand and signal that they think 50% is way to high of a likelihood, and all the bluster comes tumbling down.
I’ve given feedback on the GitHub already from a technical perspective my objections to the BIP, they went largely unaddressed before the GitHub was locked.
Notice who will continue engaging in this content without taking the bet, they are seeking attention because they must consume the discourse as their shred of a hope to win.
Surely, there is already rumbling of restricting how 444 works, already a weakening of their position.
People will say I am wrong, but won’t take the wager.
Makes you think right?
I’ll give 10% of my potential winnings from the contract if you refer a BIP444 proponent into actually making the bet with me.
So whenever you see someone talking about the certainty of this fork activating, link them to this post so we can both make some bitcoin!
