Quitting: When Bitcoin Is Not Enough
Bitcoin works...until it does not. Some believers lose faith. Here are some of the more dramatic "rage quits" in the nine years since Bitcoin has existed.
Bitcoin can be frustrating even for true believers. Sometimes, people just decide to quit, or send a message. This rarely affects the momentum of Bitcoin, which has already grown into a megastructure of intertwined interests and power plays. But still, "rage quits" or giving up on ideas are a large part of the Bitcoin story. Here are five prominent stories of quitting:
1. Bear Whale, selling off at $300 - a rather old story of trying to quit Bitcoin, part of the Bitcoin lore along with the two-pizza story. The selling of 30,000 BTC in October 2014, almost three years ago, came in the midst of a long-term price slump, a "Bitcoin Ice Age" where lots of investors and users somehow lost their faith. But the market had another mind, and the whole order was bought up- in fact sparking a price spike in Bitcoin.
Later, the Bear Whale again bought in at $1,000 and held onto the coins, not reporting another rage quit coming up, and actually coming up as a Bitcoin Supporter.
2. Mike Hearn and the "failed experiment"- just toward the end of the Bitcoin ice age, the beginning of 2016, Mike Hearn did the original "rage quit". The Bitcoin juggernaut, obviously, continued without him. But today, the words of his famous "rage quit" are quite relevant. Hearn announced Bitcoin to be an experiment on the verge of failing, mostly because of block size. The sentiments of Hearn look like a predecessor of the SegWit2X group, which, however, stopped its project at the eleventh hour, but otherwise shared the same sentiment of gloom and doom toward Bitcoin in its current state.
Hearn wrote a lengthy Medium post explaining his position:
"What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system."
A lot of things are changing quickly in the world of cryptocurrencies- and Bitcoin has not lost the game yet. But the challenges Hearn outlined follow a notable slowdown in the network at the beginning of last year, the same conditions repeating again in November 2017 at a much larger scale. It seems like Hearn's prophecy that Bitcoin will face a severe network backlog is happening in real life right now, and the community is trying to figure out ways to solve the problem
3. Circle Internet Financial Disappointed with Bitcoin
Another case of quitting at the end of 2016, just months before the biggest Bitcoin rally in history. Circle is a digital payments startup that dramatically announced it would move away from Bitcoin, blaming Bitcoin developers for its suspension of payments. The media at that time recorded the case as a failure of Bitcoin to get traction with the firm that boasted Wall Street talent. The Circle Financial quit was considered "the latest indication that the financial revolution that Bitcoin’s early developers had hoped to spark isn’t playing out as planned." Needless to say, the Bitcoin trend continued even without the input from Circle Internet Financial. Circle CEO Jeremy Allaire believed that "Bitcoin hasn’t evolved quickly enough to support everyday financial activities." In other words, Bitcoin at that time was not business-ready:
"The story is one of essentially gridlock amongst core developers, while mainstream companies are using this technology,” Allaire said of Bitcoin. “We’ve been deeply frustrated with that lack of progress, and we want to move it forward."
4. The closing of Bitcoin Classic
Bitcoin Classic announced its closing a few days ago, pointing to a potential redirection of resources toward Bitcoin Cash as one currently viable solution to the scaling problem. Since the Bitcoin Classic nodes could not go on to support large blocks, the project's creator, Tom Zander, claimed that in six months, a rather short timeline, Bitcoin would be replaced by Bitcoin Classic. The announcement has something of a sour grapes flavor to it, as Bitcoin Classic could not impose its ideas and quit.
5. Roger Ver, 2017: A bluff or a true rage quit?
Reddit is abuzz with the movement of the funds by Roger Ver, an early Bitcoin adopter. A wallet by Ver has been emptied, and another transaction shows nearly 25,000 BTC being moved to an exchange. Roger Ver supported Bitcoin scaling, and has moved to a full-on defense of Bitcoin Cash. No one knows if he would actively switch between the two assets and remain holding only BCH.
Earlier, Roger Ver participated in a bid ahead of the now-defunct SegWit2X hard fork. He promised to swap his Bitcoin Core coins with Charlie Lee, creator of Litecoin. The move was never realized, but he was one of the few people ready to quit a vast sum of Bitcoin in case the new SegWit2X coin showed weakness.
All those cases of rage-quitting show the underlying reality- that Bitcoin is evolving and still finding its way. But with every drama survived, the asset may become a little bit stronger.