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Aleksey Muratov: Revolution in the world of blockchain can destroy the idea of cryptocurrency decentralization

In the world of blockchain a revolution is emerging, and this revolution can completely destroy the idea of a decentralized electronic currency.

The government of China can become the creator of this revolution. This fact was announced by the chairman of the board of the international public movement “Change the World Together” (CWT), Mr. Alexei Muratov, at a regular conference held in Johannesburg on March 18th 2017.

Feel the difference

As per Mr. Alexei Muratov, all the signs point towards the fact that the Chinese government intends to privatize Bitcoin. "How will this happen?" For this to happen, it is necessary to collect more than half of the Bitcoins and the mining capacities that create blocks - in one hand. Thus the owner can change the rules of the game in his own interests. In the world of blockchain, this is known as “hard fork”. That means, it is a situation wherein the developers or owners of capacities unilaterally take a decision to technically create a new version of the network, in which some of the rules may differ from the original ones. So, now, China has all the possibilities to implement the fork and substitute Bitcoin for Bitcoin Unlimited, "- stated the Chairman of the Board of CWT.

He recalled about a similar situation that recently occurred with another crypto currency - the Etherium (Ethereum). "After Bitcoin this is the second most rated electronic currency, and recently there was also a “fork” implemented, the reason being the attacks on the classic version of it by hackers. In June last year, someone anonymously started withdrawing huge amounts of money through the exchange. People watched the money go away with their own eyes, it was almost like watching a bank robbery live. As a result, the hacker got about $ 50 million at the rate of exchange of the crypto currency at that moment. Developers managed to stop the theft and to move funds to another contract, but this turned out to be just a temporary measure. To prevent further withdrawal of assets, a new version had to be created, and that’s how Ethereum split," - said Mr. Alexei Muratov.

According to him, the most of the users supported the fork at that time. "After realizing all the risks of the hacked old code, most of the exchanges, services, websites and developers have supported the hard fork. Also, as most of the miners got used to believing the developers of the Etherium ecosystem unconditionally, during the “hard fork” they unhesitatingly followed them. But there was a minor part of users who did not leave the old version. As a result, the difference in the current exchange rate between these two versions is quite significant - the cost of one unit in the old system is about $ 2, and in the new version, it is quoted at about $ 45," – noted Mr. Alexei Muratov.

What is the catch?

Now let's go back to Bitcoin and see what is happening with it in China. As Mr. Alexey Muratov has told, now the authorities of China had frozen more than half of all the existing Bitcoins on stock exchanges of the country. "Now the Chinese authorities are trying to take control over all the local mining farms which create blocks (servers). Now it is clear that the reason why the equipment for local production of Bitcoins was first exploited in China for half a year. Then it was not sold, but only leased all over the world, while actually staying on the territory of the producing country. The trick is that now this producing country has the opportunity to take control over all the mining equipment in China, and through it - to introduce a new version of Bitcoin", - explained the head of the CWT board.

According to him, in fact, the Chinese government is now preparing the fork of Bitcoin. "All the conditions have been created for the splitting of Bitcoin and for the shifting of the majority of users to the Bitcoin Unlimited version which has been built under the control of the Chinese authorities. By holding most of the services in its hands, most of the Bitcoin users will be covered by the state. These users will have to accept the terms of the new system and will no longer be able to control Bitcoin. Control over this crypto currency will gradually move from small users to larger players until there are only 2 or 3 centralized companies left. These companies will be able to continue working with the highly inflated Bitcoin, and the rest will have to blindly trust them. By imposing regulation and control, it will be much easier for the government to manipulate these two or three massive companies, "- said Mr. Alexei Muratov, explaining all the risks of "hard fork".

What should we do?

 

The chairman of the board of the “Change the World Together” movement expressed confidence by saying that such a “hard fork” would turn Bitcoin into a modern bank, with the exception of having a unique source code. “In other words, we will be back to the centralized banking system, however this time not with fiat money but - electronic money in the form of Bitcoin. If earlier the entire world financial system was created and controlled by the US through the Federal Reserve System, the new financial system, based on Bitcoin, will be controlled by China, while the mining pool will also be located in China. In short, we are jumping out of the frying pan into the fire, "- said Mr. Alexei Muratov.

 

It is quite obvious that now, the users of Bitcoin will face serious risks and will be forced to move to Unlimited. "The developers are already fixing serious problems in the program. For example, on March 14th, almost 70% of the nodes which support Bitcoin Unlimited, went offline due to an error in the program code. The detected error showed the vulnerability of this system after certain type of messages had been sent to the nodes," – noted Mr. Aleksey Muratov.

What can the users of Bitcoin do to minimize the risks of this cryptocurrency centralization? "Now, at this stage, Bitcoin is still not lost, we have a chance to create a new single electronic currency. And this work is going on. We have our team of experts, developers and programmers from different countries, who have joined forces to create a new decentralized cryptocurrency. If Bitcoin implements the “hard fork” and follows the path of separation from the control center of China, there will be an alternative cryptocurrency. We understand that it is necessary to allow the Chinese authorities to fully demonstrate their intentions and to create a fork. Let them lay their cards on the table, then we will put ours, " – said the head of the CWT board at a conference in Johannesburg, South Africa.

According to Alexei Muratov, it is necessary to objectively evaluate the risks and not to hide your head in the sand. "We have no right to underestimate the consequences of the current actions by the Chinese authorities, who clearly show their desire to privatize Bitcoin. We cannot allow the centralization of the largest cryptocurrency and the conversion of Bitcoin into a new bank. Otherwise, we will simply lose the trust of our supporters, millions of activists and users of cryptocurrency around the world," - concluded Mr. Alexei Muratov.

Source: CWT News

  • March 19, 2017 7:46 PM MSK
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