Rejecting Today’s Hard Fork, the Ethereum Classic Project Continues on the Original Chain: Here's Why

Ethereum hard forked today. As per what seemed to be the popular demand, the protocol rules have been updated incompatibly with the existing Ethereum protocol. Users have essentially moved to a new blockchain and left the old one behind. At time of publication, well over 90 percent of hash power on the Ethereum network had moved to the new chain. This fork effectively reverts the existence of the DAO and will reclaim almost all funds taken by an attacker a month ago, to return them to the original investors.

But the hard fork also marks the launch of a spin-off project: Ethereum Classic. Ethereum Classic continues on the existing Ethereum blockchain and has not implemented the hard fork code to “undo” the DAO. According to the project's website, this is because “Ethereum Classic intends to keep the original censorship-resistant Ethereum going” and “provide an alternative for people who strongly disagree with DAO bailout.”

While Ethereum Classic to many seems to be a bit of a joke, intended to make a point, the project has been gaining some traction, with a small-but-growing user-base on Reddit and Slack, and with the decentralized exchange Bitsquare offering its token — classic ether — as a trading option. Additionally, some 0.5 percent of hash power joined a special Ethereum Classic mining pool even before the split, and seems determined to mine on the Ethereum Classic chain, ensuring blocks are mined and the project is kept alive.

Ethereum Classic's project coordinator goes by the name “arvicco” and prefers to remain pseudonymous because in Russia, where he lives, “the legal situation around crypto is fluid and uncertain.” Arvicco is also the owner of BitNovosti.com, the biggest crypto media outlet in the Russian language area, which runs a news site, a YouTube channel, does film production, and more.

Bitcoin Magazine reached out to arvicco to learn more of his intentions.

Arvicco, are you a troll?

Nope. Even though I like to express strong opinions from time to time, I'm not a troll.

Are you TheDAO attacker?

 Oh, no. No connection. I haven’t even been in communication with him ... or them, or ...whatever.

Why are you determined to save the original Ethereum blockchain, even though this would allow the attacker to liquidate the stolen funds?

Let me first say: This is not just me. This is an initiative that started on Russian-language forums; probably among a couple dozen active miners, traders and developers working in different aspects of crypto-tech, and more. We felt something needed to be done, and nobody else seemed to be doing it. Now, people from all over the world are joining us.

Between ourselves we have all necessary skills to make the transition from Ethereum to Ethereum Classic happen. My skills are in communications, which is why I'm the most visible, at least in the English-speaking part of the crypto-world.

As for why we want to allow the DAO hacker to move his coins... It’s an interesting question, and was [the] subject of heated debate in the Bitcoin community for years. We know the Bitcoin addresses of some dark markets, like the Silk Road and its descendants. Why not just blacklist or filter those coins? Why not block funds resulting from the Mt. Gox hack, or other well-documented hacks, thefts and so on?

Many of us are supporters of a radical crypto-decentralist stance. In short, we believe blockchain-systems should always adhere to three characteristics: openness, neutrality, and immutability. Without these characteristics, a blockchain is nothing but a glorified database. And there's no value in such a database; neither from a social nor from a technological perspective.

By bailing out the DAO, the Ethereum Foundation is attempting to reach a shortsighted goal of “making investors whole” and “boosting confidence in Ethereum platform.” But they're doing quite the opposite. Bailing out the DAO undermines two of the three key long-term value propositions of the Ethereum platform.

Many would argue that the DAO is an exceptional case and that Ethereum is still very much in its early days. Why can't a hard fork undo the damage and be a one-time only event?

Yes, a lot of people in the community falsely believe that this can be a “one-off thing.” That we can just violate Ethereum's long-term value proposition “a little bit,” and we’ll be fine. But that’s not how it works.

A blockchain is either neutral — censorship-resistant — or it’s not. A blockchain is either immutable – preserving one universally accepted version of history, one immutable sequence of events — or it’s not. It’s impossible to be “a little bit mutable by democratic process.” It’s impossible to be “censorship-resistant, until someone very important loses lots of investors money.”

It’s impossible to be “a little bit pregnant.”

Once the precedent is set, it will be so much easier to make another bailout when — not “if,” when — another big smart contract [failure] happens. It will also be so much easier for external institutions — like courts, law enforcement, or governments — to impose their rules, once the precedent of censorship, funds confiscation and 'crime prevention' is set.

Where do we draw the line?

Ethereum is a consensus protocol. If users, by consensus, decide to change the rules, why shouldn’t the rules be changed? Why can’t the line be wherever users want it to be?

Well, according to different metrics, 20 to 40 percent of the Ethereum community is against the hard fork. And that minority mostly disagrees on principle.

So there is a majority in favor of a hard fork, by a democratic process, if you will. I don't deny that. But such a democratic process is problematic. It is easily gamed to shape the results to the liking of those who wield power. It doesn’t protect vital rights of the minorities. I can go on; Hans-Hermann Hoppe is your friend.

The point is: We shouldn't want to replicate the problems of democracy in Ethereum, nor in any other blockchain for that matter.

Yet, that is the nature of this technology. If 60 to 80 percent of users want to hard fork, they can hard fork.

Yes, users can choose to adhere to any rules they want to adhere to. Even in Bitcoin. The only thing preventing a simple code change that eliminates the 21 million bitcoin emission limit is the Bitcoin community itself.

But people self-select communities. And as long as people self-select into communities that uphold their values, it will work. Virtually anyone who chose to join the Bitcoin community knew about the 21 million bitcoin limit, and therefore supports it. It's this social consensus that's very hard to break, thereby keeping the 21 million limit in place.

Obviously, Ethereum's values were not articulated well enough. Probably because in the beginning members of the project wanted to be very inclusive. As a result, the community ended up without any of the guiding principles to assess what’s right and what’s wrong in regard to the DAO debate.

In full, as stated on our website: “We believe in decentralized, censorship-resistant, permissionless blockchains. We believe in the original vision of Ethereum as a world computer you can't shut down, running irreversible smart contracts. We believe in a strong separation of concerns, where system forks are only possible in order to correct actual platform bugs, not to bail out failed contracts and special interests. We believe in censorship-resistant platform that can be actually trusted — by anyone.”

Putting aside the DAO, for the moment, do you think that the values held by other people in the Ethereum community differ fundamentally from these values? 

It seems that too many people in the community currently uphold a bit of a “get-rich-quick-regardless-of-the-consequences” value. An influx of such people coincided with the great price run-up. And that is very unfortunate, in my opinion. It’s very hard to make people understand principles when their “crypto-fortune” depends on them not understanding them. Or at least they think that's what their “crypto-fortune” depends on.

Isn’t there a moral argument to be made that the community should undo a theft when there is the chance to do so?

What a noble sentiment! Are they going to reverse all the thefts on their blockchain?

If so, who is going to decide what on-chain code execution is “theft,” and what's not? Where is the body of law? Who is going to be the police, the judge and the jury? What is the appeal procedure?

If not, why not? Why does this theft get a special treatment, and the other theft not? Who do you need to know, whose buddy [do] you need to be to make it happen? How are they going to defend such a change of stance against precedent and subpoenas?

As mentioned, if the answer to these questions is this vague concept of “consensus,” or rather, a democratic process, that's no satisfying answer at all.

It's this whole snake's nest that you avoid cleanly when you stick to principles. But you have to sacrifice something for principles sometimes, yes. A failed investment into unproven and insecure smart contract, perhaps?

Are you claiming that Ethereum users in favor of a hard fork lack principles?

From my point of view, the Ethereum Foundation became co-opted by special interests. People who are connected with the DAO invested a lot of money into the DAO and have a very close relationship with Ethereum Foundation insiders.

Immediately after the DAO crisis, Stephan Tual — one of the guys behind the DAO — and people connected to Stephan Tual started running a political campaign to justify the DAO bailout by any means necessary. Even though it runs contrary to everything Ethereum initially proclaimed to stand for: “Code is Law,” Ethereum as this trusted platform for smart contracts free from the human factor, and all that.

The problem is, his campaign was very successful. Because too many Ethereum users, developers, traders and others also bought into the DAO.

There is concern about the health of the Ethereum platform. How do you respond to the argument that it the DAO attacker gets to move his funds, he might very well want to sell them off and crash the price in the process?

Any token price is the result of a balance of supply and demand. If the attacker dumps his coins, it would create a one-off supply shock. 

In fact, I expect an even bigger supply-shock for classic ether after we split, as pro-fork people dump their coins. That's fine. Some people will see it as an opportunity to accumulate tokens — either because they believe that our vision of Ethereum platform has better chances, or just to diversify their bets on a future smart contract platform. There are many reasons.

It’s all right for the coin price to fluctuate — this is how markets balance themselves. It creates opportunities for investors and traders.

If the price dumps too much, might the tokens have too little value for miners to invest the hash power required to secure the chain?

Difficulty adjustment is quite fast in Ethereum. Now, about an hour after the hard fork, it seems the initial difficulty adjustment to get back to the norm of two blocks per minute will happen in hours — maybe days. Not weeks or months. After that, any adjustment will be easy.

Measured in hash power, the Ethereum Classic chain will probably not be as secure as the Ethereum chain — at least not right from the start. But why would any miner want to attack it? The incentives line up for miners to just mine fairly and earn classic ether in the process.

Do you think that miners who support Ethereum and the hard fork might want to attack Ethereum Classic in order to make ensure that only one chain survives the hard fork?

Why would they mind decreased competition on their own chain?

Could the existence of Ethereum Classic be detrimental to Ethereum and the price of ether?

I don’t think so. I've seen people express such opinions, but many more actually think it’s a good idea. If there is a minority that wants to go separate ways, why not let it do so?

Even some pro-fork people expressed Ethereum Classic in terms of an “insurance policy for Ethereum.” If the Ethereum Foundation's approach ultimately fails, it would be easier if there is an alternative to fall back to.

The other problem is that Ethereum plans to move to a proof-of-stake system in the future. That may not be secure if the attacker holds 5 percent of all coins, for example. Should this be an area for concern?

I don't foresee any problems if the attacker keeps his coins going into proof-of-stake, and neither does Vitalik Buterin.

If the attacker is going to dump his coins, as many contend, then what's the “problem” at all?

What about the split itself? Can it be done securely?

It’s hard to say at this point whether the hard fork split will go smoothly or not. The Ethereum Foundation developers are great, but the hard fork code was unduly rushed and has some issues. The network split could be done in a cleaner way. Now there is a risk of a so-called “replay attack,” where transactions can be replayed from one chain to another.

But there are some mitigation strategies. We are going to focus on the issues that require the least user involvement, to make it easy for everyone. The Ethereum Foundation and outside developers are helping with that as well.

You claim to have a solid user-base in the Russian-speaking part of the crypto-community. What about the rest of the world?

Well, there is something very interesting about Ethereum Classic. Essentially, this is an Ethereum “spin-off coin.” Spin-off coins were theorized for a while, but there's been no widely known attempt to make them so far.

It means that Ethereum Classic will immediately have a wide user-base: all the current Ethereum users. Some of them will see the value of transacting on a censorship-resistant chain, some won't. This creates interesting arbitrage opportunities for smart traders. And since Bitsquare will offer trading in classic ether, we'll have a market.

Additionally, all major ether exchanges — Poloniex, Bitfinex, and Kraken — are going to give their users both ether and classic ether after the fork. So all their users are going to have both deposited into their accounts. And once these exchanges see that Ethereum Classic is alive and kicking, allowing trade in already deposited customer funds is a no-brainer.

And, of course, all applications that run on Ethereum will run on Ethereum Classic just as well. That's the whole point.

What about developers? To date, none of the well-known Ethereum developers is joining Ethereum Classic.

At the initial stage, maintaining 100 percent compatibility with Ethereum is a high priority for us. This also means that we don't really need to do much development, we simply fork the code from the Ethereum repository and update accordingly.

But, of course, if current Ethereum developers want to join us — now or in the future — they are more than welcome to do so. We are aiming for the same thing here: building a better future for humankind, where smart contract platforms provide a mechanism for social and economic cooperation on a truly global scale.

Do you want to eventually “beat” Ethereum? Or can Ethereum Classic and Ethereum exist side by side?

I don’t want to slip into confrontational rhetoric. While I’m highly critical of how the Ethereum Foundation handled this issue and do think that they are making a grave mistake which undermines the long-term value proposition of their platform, I have high regard for most members of the Foundation, the community and developers.

I know that many developers are also very critical of this hard fork. But they acted responsibly, creating the hard fork code and giving the Ethereum community a choice. Well, we now intend to realize this choice.

Ethereum Classic is not some kind of “anti-Ethereum,” as some are trying to misrepresent us. We are part of a broader Ethereum ecosystem, and we intend to contribute positively to its development. We are just another Ethereum community that shares a different set of values, and that we believe may eventually deliver on the original promise and vision of an open, neutral and immutable blockchain. We are making the Ethereum ecosystem richer, not poorer.

Now we just need people to understand that this project is not some kind of joke. We're for real.

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