The launch of an alternative Bitcoin network, initiated by renowned developer Luke Dashjr, has turned into a resounding failure. The hard fork, activated on September 1, received virtually no support from the mining community, casting doubt on the viability of the entire project.
The core of the conflict and technical details
The basis for the split was the BIP-110 proposal, which implied cleaning Bitcoin blocks of all data not related to payment transactions. Dashjr, a longtime critic of network congestion, has repeatedly called the main chain "Spamcoin." However, his radical idea of switching the network to the BLAKE2b mining algorithm instead of SHA-256 backfired.
The transition to the new algorithm automatically rendered all specialized Bitcoin mining devices (ASICs) useless. Instead of attracting ordinary users with CPUs, as planned, it drove away industrial miners. The hash rate of the new chain collapsed almost immediately after launch, and the network itself essentially came to a halt.
Notably, this is not the first attempt of this kind. In August, another branch with BIP-110 survived only two blocks before miners from the OCEAN pool, dissatisfied with management actions, effectively sabotaged it by redirecting their power back to the main network.
Industry reaction and positions of the parties
Blockstream CEO Adam Back, known for his skepticism, succinctly summed it up: "Live by the fork, die by the fork." This statement perfectly reflects the consensus of most market participants.
Dashjr himself, however, continues to insist that his creation is the "real" Bitcoin. He claims that the BTC ticker belonged to the original network for over a decade, and now it has moved to BLAKE2b. However, network data and market reaction suggest otherwise. He made similar statements in August, which drew sharp criticism from former Ripple CTO David Schwartz, who called them "nonsense."
Market reaction and liquidity
The market has also shown no interest. The main Bitcoin network is operating without issues, and BTC is trading near the $76,900 mark. Major exchanges are in no hurry to list the new asset. Only a small test platform has begun accepting orders under the BTCB2 ticker.
However, liquidity there is virtually zero. The maximum buy order did not exceed $82, which is almost 900 times lower than the Bitcoin price, and the spread between the bid and ask price is 131.7%. This is a clear sign of the absence of any real trading or investor interest.
My analysis: This incident is yet another confirmation that a technically perfect idea without economic and social support from the community is doomed. Dashjr, trying to "clean" Bitcoin, forgot about the most important thing—the people who ensure its security and value. In the world of cryptocurrencies, consensus matters more than code.