ever since things like ordinals and inscriptions
were launched on Bitcoin there’s been a growing split in the community about which features
should be enhanced or eliminated this debate has reignited following a controversial
Bitcoin proposal with tensions escalating into a smallcale civil war within the Bitcoin
community adding to this uncertainty are the overhanging concerns about the vulnerability of
Bitcoin to quantum attacks together these issues point to the possibility of a Bitcoin fork in
the not tooistant future so today we’ll explore the potential causes for a hard fork assess the
possible implications for BTC and examine just how likely it is to happen my name is Guy stay tuned
all right let’s bring you up to speed recently the developers of Bitcoin Core the original and most
widely used software implementation of the Bitcoin protocol announced plans to remove a bit of code
that currently exists in Bitcoin’s architecture code that they say is arbitrary now this decision
has opened up a huge rift in the Bitcoin community some believe this is a minor change while others
say it will render the entire Bitcoin protocol worthless so what gives well specifically this
bit of code is the op return function which allows users to attach up to 80 bytes of arbitrary data
to a Bitcoin transaction for perspective 80 bytes is big enough for a transaction hash but far too
small for say a photograph op return allows small amounts of data to be embedded into Bitcoin
transactions with an unspendable transaction output or UTXO and if that sounds familiar it’s
because this was the concept that became insanely popular when ordinals and inscriptions hit the
Bitcoin ecosystem back in 2023 more on those later anyway the upcoming update to Bitcoin Core
will remove this 80 byt limit which effectively adds more functionality to the Bitcoin blockchain
one Bitcoin Core contributor Greg Saunders wrote on GitHub that quote “The long-standing cap
originally a gentle signal that Blockspace should be used sparingly for non-payment
proof of publication data has outlived its utility.” Core developers also explain that the
limit has proven to be ineffective since users have already been using workarounds to avoid
the 80 byt threshold for years they say that this activity could potentially damage the network
and by lifting this cap they would be encouraging less harmful onchain behavior now here’s where
things get interesting to determine a fix to these problems Bitcoin core developers had three
choices which were outlined on GitHub option A keep the 80 byt threshold in place this option
was quote rejected as ineffective and arbitrary option B raise the cap above 80 bytes this was
likewise rejected as arbitrary and ineffective since it would probably need to be raised again
in the future so Bitcoin Core developers opted for option C remove the cap entirely according
to them this quote aligns default policy with actual network practice minimizes incentives for
harmful workarounds and simplifies the relay path what’s crazy though is that this update is
going ahead without the unanimous support of Bitcoin Core developers even more controversially
though this change is being implemented without a proper community consensus process now this
is significant because many Bitcoiners do not agree with this change that’s because while
removing this cap could add extra functionality to Bitcoin many people believe that Bitcoin could
also become a data dump flooded with useless spam files that potentially bloat the network
this would directly impact the size of the blockchain and node operations however removing
the OP return function doesn’t actually require consensus and that’s simply because it’s a
standardness rule and not a consensus rule standardness rules like the OP return cap govern
how transactions are relayed on the peer-to-peer network while consensus rules define what can be
included in blocks as such removing the cap simply adjusts network policy without affecting consensus
aiming to align it with real world conditions and reminded many of the controversies surrounding
ordinals and inscriptions for context ordinals and inscriptions were both created by Casey Rodomore
a Bitcoin developer who isn’t exactly afraid to rock the boat in a nutshell the Ordinals protocol
takes small denominations of BTC called Satoshi’s and well orders them before ordinals Bitcoin
transactions were entirely fungeible one Satoshi was identical to another Satoshi with ordinals
though each Satoshi is given a unique identifier which creates a form of digital collectibility
especially for Satoshi’s created during key events inscriptions followed from ordinals allowing
data like images text or even videos to be attached directly to these individual Satoshi’s
and this allowed for the creation of unique NFTt like tokens on the Bitcoin network now needless to
say these features probably weren’t exactly what Satoshi had in mind and many people shared the
same thought just because you can do something doesn’t necessarily mean you should we should
add that Casey also created the runes protocol and you can learn more about all three by
checking out the links in the description for many however this operturn argument is
reminiscent of the so-called block size wars which resulted in a hard fork of Bitcoin and
the creation of Bitcoin Cash you see back in Bitcoin’s earliest days all you could really do
with it was mine and send BTC and that was it but early adopters saw Bitcoin’s potential albeit
from different angles and they generally fell into two camps those who primarily saw Bitcoin as a new
payment system i.e as digital cash and those who primarily saw Bitcoin as a new monetary system i.e
digital gold now to serve as digital cash Bitcoin needed to become much faster which meant changing
the protocol and increasing the block size whereas for Bitcoin to serve as digital gold it
needed to stay the same and provide permanence guarantees now most institutional investors saw
Bitcoin’s primary purpose as a new payment system and wanted the block size to be increased and
these became known as big blockers meanwhile most Bitcoin users saw it primarily as a new
monetary system believing that increasing the block size would make it impossible for Bitcoin
to achieve this and this camp became known as small blockers now small blockers were against a
block size increase for many reasons but primarily because it could open the door to other changes
to Bitcoin that could damage it in the long term such as raising BTC’s supply cap of 21 million
another reason was decentralization a larger block size would mean fewer nodes would be able to store
Bitcoin’s full transaction history and logically a more centralized blockchain with a potentially
inflatable supply isn’t the ideal store of value moreover many small blockers believed that
Bitcoin could support a new payment system but believed this purpose was secondary to creating
a new monetary system and could therefore be done using secondary layers such as the Lightning
Network and now here is where things get juicy a block size increase risks a hard fork which occurs
when a change is made to a blockchain but not all the nodes agree to the new rules what results
is a chain split with one blockchain following the old rules the other blockchain following the
new rules and both blockchains being less secure overall now believe it or not but the block size
debate began way back in 2010 when Satoshi set a 1 megabyte block size limit jeff Garzic an early
Bitcoin developer proposed removing it to allow Bitcoin to compete with the likes of PayPal and
this made Jeff the first big blocker meanwhile Michael Marott who created the first Bitcoin
block explorer warned that this would cause a hard fork making him the first small blocker now
Satoshi ultimately sided with Marort keeping the limit but note that Satoshi did seem open to
the idea of increasing the block size early on anyway the block size debate came back to the
four in 2015 when the segregated witness update or SegWit was released now SegWit optimized
Bitcoin transactions by effectively increasing the block size to 2 megabytes without a hardfork
it also enabled Bitcoin layer 2 solutions like the Lightning Network allowing for faster payments
without compromising Bitcoin’s monetary purpose after years of debate SegWit was activated in 2017
and those who didn’t support it forked the Bitcoin blockchain creating Bitcoin Cash hello hello it’s
me guys Cousin Barry i’m very very sorry to be current civil war taking place in the Bitcoin
ecosystem that’s because the oper controversy has sparked a debate between two Bitcoin node
implementations Bitcoin core and Bitcoin not now to understand why this is important we need to
understand how both sides differ philosophically so put simply Bitcoin core is the original
and most dominant node implementation serving as the foundational standard it provides a robust
method of validating transactions and maintaining a wallet and has been thoroughly tested notably
Bitcoin core is maintained by a distributed group of developers conversely Bitcoin not is based on
Bitcoin core meaning both are compatible with one another however there are some notable differences
put simply Bitcoin Knots provides users with more control over how nodes handle transactions
by adding additional features bug fixes and more configuration and notably Bitcoin Knots is
maintained by an independent Bitcoin developer Luke Dash now both Bitcoin core and Bitcoin knots
follow the same consensus rules but they differ in their intended use cases and ideologies central
to these philosophical differences is whether Bitcoin should only be used as a form of money or
if it could also support other use cases such as ordinals inscriptions or runes for example now
as we mentioned earlier it’s Bitcoin Core that wants to remove the 80 byt return cap according
to core developer Peter Todd this will modernize Bitcoin improving transparency and network
efficiency by dissuading users from resorting to those potentially harmful workarounds that
we mentioned earlier meanwhile not maintained by Luke Dash says this change invites spam and goes
against Bitcoin’s monetary use case what’s crazy though is that Bitcoin Core dominates roughly 96%
of node clients which is something that has been heavily criticized the caveat is something we
touched on earlier though and that’s the fact that pretty much all other node implementations
are managed by a single developer whereas Bitcoin Core’s developer base is much more decentralized
by comparison regardless though the disagreement between the two clients is at a policy level which
is to all intents and purposes a much smaller deal than a full-blown consensus disagreement both
clients are happy to validate the same blockchain making a fork therefore unlikely to happen
however if the conflict worsens to the point that one client refuses to accept blocks from
the other then a chain split would be inevitable the good news though is that the chances of this
happening are very low and that’s for the simple fact that the forked version would likely be
a flop and Bitcoin itself would likewise lose some of its appeal put differently neither side
wants to rock the boat because neither would stand to benefit if they did however while this
civil war will probably end up being a nothing burger there is a much larger threat to Bitcoin
that we need to be aware of and that is quantum computing we actually covered this in some detail
in a previous video which you can find right over here and we highly recommend you give that video
a watch after this one for now though here’s a quick quantum crash course so quantum computers
are massive high-tech machines that are designed to do incredibly complex calculations in very
little time fair warning things are going to get technical from here but we’ll do our best to keep
them simple so normal computers use bits which are basically ones and zeros what you have is two
bits of data but quantum computers use cubits and if you have two cubits then you actually have
four bits of data that’s because cubits can be a one and a zero at the same time the resulting
combinations are 0 0 1 1 0 and 1 1 this means that with each cubit added the number of combinations
grows exponentially and these combinations are why everyone is panicking about quantum computing
since they could potentially be used to crack encryption for those unaware encryption is used in
everything emails bank accounts cryptocurrencies and even the internet itself as you’ll know public
crypto keys use this cryptography to stay secure for a computer to crack your key encryption it
would need to make guesses until they got it right now this would take a normal computer
trillions of years and even a supercomput a similarly unfeasible amount of time but a quantum
computer could theoretically do this in minutes possibly even seconds scary stuff the key word
there though is theoretically in practice cubits make quantum computers incredibly unstable and
this instability means they often make mistakes and their calculations only last a fraction of
a second the problem is that quantum computing chips are developing fast to the point that they
could quickly become a real danger if you watched our quantum video you’ll know that a notable
advancement was Google’s Willow chip which improves the stability of cubits while reducing
the number of errors and these chips will only become more advanced thankfully though Willow or
indeed any other quantum chip won’t be a threat to crypto anytime soon for perspective a quantum
computer would require 4,000 logical cubits to crack the RSA 2048 encryption used on the internet
and would require 8,000 logical cubits to crack Bitcoin’s SHA 256 encryption willow uses just
one logical cubit the bad news though is that as quantum chip innovation grows so too does the
number of logical cubits so it’s not a case of if a quantum computer could crack common forms of
encryption but when when now Bitcoin could protect itself by increasing or changing its encryption
making its code harder to crack and in this sense Bitcoin is already quantum resistant because
quantum tech is nowhere near the 8,000 logical cubits needed to crack its encryption the catch
is that millions of BTC have been lost or rendered otherwise inaccessible around 3.8 million BTC to
be exact as such even if Bitcoin’s encryption was increased the BTC lost on old hard drives and
wallets couldn’t be made quantum resistant this means that all 3.8 million BTC could theoretically
be stolen by quantum computers and dumped on the open market now obviously this would crash BTC’s
price dragging confidence in Bitcoin down with it the worst thing is that this theft is arguably
inevitable and the only way to prevent it would be a hard fork of some kind as such a number
of proposals have been put forward to increase Bitcoin’s quantum resistance for example one
proposal involves a hard fork that enforces a network-wide migration of BTC from legacy wallets
to ones secured by postquantum cryptography any unmigrated BTC left in legacy wallets would then
risk being locked or burned if not claimed by a certain deadline this leaves inactive addresses
including Satoshi’s vulnerable if left unclaimed it’s not ideal to say the least however the most
likely hard fork would involve upgrading Bitcoin to become quantum proof at a fundamental level
but as we saw earlier this would result in two versions of Bitcoin one that’s quantum resistant
and one that’s not the new clear option is that Bitcoin forks in a different way making it
possible to reclaim or delete this lost BTC from the supply however aside from the risk
of removing BTC that wasn’t lost this would completely destroy the ideologies that Bitcoin
was built on namely that only you can control your BTC if that ever happened Bitcoin would be no
better than a fiat currency and yet this is a very real possibility if quantum computing evolves too
quickly the Bitcoin community could be forced to make an impossible decision allow this BTC to be
stolen and watch its price collapse or destroy the very core principles of Bitcoin itself now in our
view the former would be the lesser of two evils but it goes without saying that well not everybody
probably feels the same way so then this brings us to the allimportant question will Bitcoin see a
fork in the near future well from our perspective this seems incredibly unlikely in case it wasn’t
already obvious by this point in the video there doesn’t seem to be much of a reason for this split
to take place while we don’t want to discredit the viewpoint of those opposing the removal of OPRON
from Bitcoin’s code it does seem that these fears are somewhat overblown that’s not to say that
they aren’t legitimate concerns but there does seem to be some confusion around what this removal
will actually mean for Bitcoin in the long run to be blunt removing the OP return cap won’t make
much of a difference to the future of Bitcoin and this is for multiple reasons but primarily
because people are already using alternative methods to store data on the Bitcoin network that
exceeds the 80 byt limit some are using technical workarounds while others are using services that
are specifically designed to offer this bypass one example of this is Mara the biggest Bitcoin
mining company which offers a service called Slipstream that’s specifically designed for
this purpose and we should note though that Mara Slipstream is a controversial solution to
this problem that’s because while some praise Slipstream for enabling innovation and supporting
complex Bitcoin transactions others see it as an opportunistic move to capitalize on this activity
from what we can gather though workarounds like slipstream are 4x cheaper than using OP return and
this means that even with the cap being removed there won’t be many users adding data in this way
it simply wouldn’t make sense from a financial perspective realistically then a hard fork of
Bitcoin would be a bit of an overreaction and the same is true from the perspective of quantum
resistance at least in the near term a hard fork is unlikely simply because quantum computing
is still a long way from cracking Bitcoin SH 256 encryption as such rushing into a hard fork
at this stage would probably do more harm than good making such a move counterproductive and we
should also address the elephant in the room and that’s all the other Bitcoin forks it may sound
harsh but the reality is that these forks proved that a hard fork of Bitcoin would most likely
fail not trying to upset any holders of these forked coins out there but you only have to
zoom out on their BTC pairs to see that most have pretty much flatlined suggesting that most
Bitcoiners are unlikely to make the switch as such we reckon that this drama has become overblown by
crypto media outlets and Bitcoin maxis spreading doomsday level FUD on X from where we’re sitting
Bitcoin will continue to plot along in the same way it always has which I’m sure will be a huge
relief to many of you so take a deep breath touch some grass and keep on stacking those SATs not
financial advice of course okay if you enjoyed that video then go ahead and smash those like and
subscribe buttons to show it some love and if you want to learn about five companies going allin on
Bitcoin then check out the video right over here and if you want to see how Bitcoin has decoupled
from the stock market well then you can check out the video right over here okay thanks for watching
and I’ll see you next time this is Guy signing off
