The Tradeoffs of Bitcoin Soft Fork Upgrades

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Although known as a slow-to-change protocol, Bitcoin has its own way of adding new features to the network. Soft forks, a type of upgrade that ensures those not using the new software can still participate in the peer-to-peer network, are probably the preferred method of introducing new features to Bitcoin. However, do soft forks have their drawbacks? What are the trade-offs for Bitcoin users?

A panel moderated by Ben Perrin, creator of the BTC Sessions The YouTube channel, at Bitcoin 2022, set out to explore this question. The talk, “Soft Forks: Advantages and Tradeoffs,” featured a longtime Bitcoin developer and educator jimmy songdeveloper and founder of Bitcoin R&D organization Judica Jeremy Rubinand thought-provoking bitcoin blogger Paul Sztorc.

“For a while I thought soft forks protected us from tyranny because you can stay in your own node,” Sztorc said, adding that today he sees how similar they can actually be.

Rubin explained that while there is a general consensus that soft forks are benevolent, an “evil” soft fork could harm users.

“In hard forks there’s a propensity to shove it down people’s throats and soft forks usually align with opt-in, but you can do both with both,” Rubin said.

Song acknowledged that evil soft forks could exist, but he disagreed that there was a good enough chance that they would ever occur in Bitcoin.

“With the soft forks, at least with the ones bitcoin has made, the benevolent ones are the ones that don’t change the permanent rules,” Song said. “Soft forks are important to stay in that zone and avoid bad soft forks.”

Rubin is currently working on its own soft fork. CheckTemplateVerify (CTV) aims to bring a new kind of programmability to Bitcoin with covenants. While currently a Bitcoin developer can restrict when or under what conditions a coin can be spent, CTV would also allow them to restrict where that coin can be spent. This new level of programmability seems scary to some people and has divided the community, even though Rubin’s CTV offers a simple and basic format of verifiable commitments.

“The thing is, soft forks…is that we do these things that involve major consensus,” Rubin said.

Song continued along the line of consensus, “Each soft fork has its own environment it needs to activate in, and you need to get consensus any way you can for this one. There is no process, you just have to seek consensus. It is up to you to prove that it is desirable. And it’s really hard to do, I sympathize with those guys.

Bitcoin 2022 is part of the Bitcoin event series hosted by BTC Inc, the parent company of BitcoinMagazine.

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