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Why forking a blockchain doesn’t “steal” the value

By February 12, 2022No Comments

Forking is a concept in software development where you copy a code base, line by line, to then create a different version of it. Imagine if a code base was a book. Forking would be like the ability to copy that book word for word then have the ability to add, remove, or edit any chapter you like. 

It’s a very common practice in most code repositories like GitHub:

You can essentially do this on any open source project, heck,  any of my public projects on my code repository GitHub you can do this for. 

You can even do this for blockchain projects like Bitcoin. There have been many forks over the course of its history. Perhaps the most famous one was when the classic or “main” version of Bitcoin forked into Bitcoin cash. This fork occurred because there was a major debate within the community over block size and transaction time. 

The Bitcoin cash crowd wanted smaller blocks in order to speed up transaction time to push Bitcoin to be a medium of exchange quicker. 

Ultimately this side lost the argument seeing as though Bitcoin “main” has seen nearly a 25x increase in market cap whereas Bitcoin Cash hasn’t seen relevant movement in price. 

This fork and forks like it do not threaten the system or code base itself. 

Let’s think about it this way. Imagine if you had the legal rights to copy, word for word, any book in human history and publish it and distribute it on your own. You could then profit from the sale of that book, you could create merchandise off of that book, fan clubs, create entire amusement parks, etc. 

You could build worlds of infrastructure around this new story if the fan base grew big enough, and you wouldn’t even have to do all the initial work.

Sounds amazing right? But there’s one catch, you would have to name the book or set of books with an entirely different title and then try to sell the franchise. 

Let’s use a real world example to drive this point. You get the rights do to whatever you want with the most successful franchise in literary history; Harry Potter. 

For some reason J. K. Rowling has opened up the copyrights to her master piece and anyone is free to do whatever they like with it. 

You say to yourself “this is awesome”! I loved the series growing up and I have some major ideas that could make it 10% better. First you start off by changing its name. Let’s say you change the first book’s title Larry Hotter and the Sorcerer’s Stone. You also make some minor and major tweaks to the storyline. 

Instead of having one cousin (Dudley) Larry grows up with two of them and they are equally cruel. Then for the major change let’s say that Ron Weasley ends up dying at the end of this story. 

You personally think this increases the drama of the story and the world will know it. So you embark on this quest to sell your new children’s book franchise; Larry Hotter. 

Imagine how hard this would be. How downright impossible this could be. The brand name and story, and folklore, and imagery of Harry Potter is in the mind share of literally bIllions of people world wide. 

That story has resonated with billions of people, and you’re trying to convince those same people that your tweaks in fact make it better.

You would be viewed as a crazy person. Even if you got someone to buy and read your book after the second paragraph they would realise they are just reading some third rate version of Harry Potter. Even IF killing off Ron Weasley did somehow add to the series in a measurable way there are too many people attached to the original story to buy into yours. 

Perhaps your verbiage and word choice is actually better writing, it doesn’t matter. J. K. Rowlign did a great enough job that it will forever be cemented as a work of art and loved by millions upon millions across the world. 

Your forked version of Harry Potter would have no chance. 

There is a similar level of difficulty with trying to do so with a cryptocurrency. Especially one that’s established to the point of Bitcoin.

That’s why you shouldn’t fear the possibility of someone just “copying it” in order to compete with it. It has a competitive “moat” that’s just too hard to bridge at this point. It’s brand name is too strong to be overtaken by something as similar.

Peter