(11/16) Non-fungible by Nature

(11/) The following post is part 11 of a super long story about how I came around to crypto. Part 10 can be found here. Part 12 here.

Disclaimer: (I really don’t want to get into the technicals about ETH, but I think this is kind of important…at least to understand what I was thinking for at least this post).

So I bought into a bit of ETH…so I was ‘invested’ at that point and kinda followed the news surrounding it. I remember hearing about this code issue with Ethereum that caused a ton of people to lose money, so the developers of Ethereum had a choice - ‘do we just keep it moving or do we make it right?’ It was really interesting to me and I had no idea what was going to happen. I was also working as a (pretty crappy) developer at the time, so I distinctly remember thinking ‘that dude was 19 when he built this thing, so there has to be some bugs.’ But their choice, as a collective, was to either fix the bug and move forward, or leave it alone and move forward. Somewhat surprisingly, this caused a pretty large rift within the community…and that’s because if the chain gets tinkered with - it’s no longer ‘pure’ and ‘decentralized’. If the bug doesn’t get fixed, all of those people - through no fault of their own - were screwed. It was a hot-button debate for a while. And I STILL don’t totally know how I feel about it.

Ultimately they decided to fork it. I’m not going to go too deep into forking (I’m no technical expert), but it essentially meant that they’d keep the original version of the (block)chain without the bug fix, and then create another copy of the chain with the bug fix, and whichever one the majority of stakeholders chose, they’d put their resources behind and move forward. What I didn’t know at the time, but if you held ANY Ethereum BEFORE the fork was to take place - they’d give you the EXACT same amount you owned ON BOTH CHAINS. So, for example, if you owned 3 ETH on the ETH blockchain before the fork, you’d get to keep that 3 ETH on the original chain, plus they’d give you that same 3 ETH on the new chain (that came with a new name). So effectively you’d have 6 ETH on two different chains. So as soon as the fork occurred, the price of each was right around the same. My $600 had then doubled to $1200…out of thin air.

I wasn’t planning on explaining that in such a level of detail, but to see that happen in real-time was fascinating to me. On the face of things, with my understanding of currency and economics, it made no damn sense at all. But when I understood what it was meant to accomplish, it made perfect sense. And it was an interesting solution. Why live with a shitty system if you don’t have to? How is this possible? I know it sounds crazy, and I can see how it can definitely be perceived that way, but is it any better or worse than the corrupt fiat systems currently running the world? If, with fiat, the powers that be can just *print* their way out of their issues (and we are the ones that suffer), why would that be preferable to fixing an issue to improve the system? It’s not, IMO. And this was a *much* better solution. At least we can still determine what’s going on as it is a *public* ledger.

But back to the point - over time the price action between these two chains shows which one ends up mattering and which one does not. As of today - 1 ETH is ~$2.5k and 1 ETC is worth ~$35; I’d say one has clearly won.

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So after the ETH fork, where I basically doubled my tiny investment without even knowing what was going on, I heard Bitcoin was going to undergo a similar fork…maybe around early 2017 or so. I don’t really even recall what the theoretical rift behind the fork was but I think it was due to a disagreement in how to better run the network. I also remember thinking - no matter what happens, anything I put into Bitcoin would automatically double. So I needed to buy as much as I could. It was like the easiest investment decision I had ever faced in the space. Buy 1 Bitcoin, watch it double to 2. And when it became clear which one would fail, I’d trade it out for the other. The only risk was going all-in on one versus the other, and I wasn’t going to do that. So…I just saw it as free Bitcoin. Simple.

So…a day or two before the fork…I remember we were at a beach house with my cousins and I was frantically buying, selling, just trying to stack as much as I could before the fork was to occur. I explained to everyone what I was doing and I must’ve looked like a maniac. I think they were following, but I wasn’t pretty frantic trying to get it done.

And It worked.

So now I had equal amounts of both BTC and BCH. I was really feeling myself that day.

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Part 12 can be found here.