Re: Bitcoin XT - Officially #REKT (also goes for BIP101 fraud)
There is a mechanism in place to limit the power of developers, the governance mechanism of Bitcoin allows for this by having multiple alternative implementations and the ability to hard fork. We are now going through the process of developing the understanding and ecosystem to further allow this. I believe this is a necessary part of the evolution and growth of the protocol as a whole.
Unlike other open-source project, bitcoin is money, everything happens here have direct economy impact, so it is suicide to do a hard fork without major consensus, since that is simply Mutually Assured Destruction - MAD
Imagine that Blockstream devs and chinese exchanges formed an alliance of no block size increase, while Gavin and western exchanges formed an alliance of BIP101. The moment following a hard fork, all pre-fork coins can be spent on both chain. So chinese miners will dump all their pre-fork coins on Bitstamp/Coinbase (which will be running XT by that time), and western miners will dump their pre-fork coins on BTCC/OKCOIN.
It seems the money supply only increased by 100% following a hard fork, but currently only less than 10% of the coins are in circulation, over 90% of them are hoarded as long term storage. Daily net sell volume on all exchanges combined is estimated to be around 5000-10000 coins. But after a hard fork, those hoarders suddenly get a double of their coins over night, so they will immediately sell their coins on the chain that they don't support. Putin said: "when a fight is inevitable, you hit first"
Then exchanges will face a sell volume counted in millions of coins, 1000x larger than the daily sell pressure, this will quickly send bitcoin value back to cents or in case of lack of liquidity, zero. And game over
Then investor confidence for bitcoin is all gone, no one will talk about it in years, and banks all laugh about the miserable fate of decentralized currency. And even if you managed to pull up another coin which prohibiting any hard fork to core protocol, it might still never succeed because the public image of cryptocurrency is totally destroyed, it will become the biggest scam in human history (instead of fiat money
)Anyone with a little bit literacy will understand this scenario, so let's hope it will never happen. However, if bitcoin succeeded and start to threaten banks, they would really like to see this happen. So any attempt to divide the core devs and trying to persuade some major exchange to use different forked versions can be regarded as highly malicious. And I doubt those exchanges really fully understand this yet, otherwise Bitstamp would never claim to support XT