Virginia Heffernan: Crypto trading has become more secure, and it’s a shame

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Something called the “London hard fork” is falling.

If you imagine a two-pronged tool spitting in a pub steak, you’ve got some catching up to do. It has nothing to do with the London grill.

Instead, the London hard fork is the insider (and admittedly cool) name of the first phase of an Ethereum blockchain gut renovation. It started in London on Thursday.

The Ethereum blockchain is one of the most established digital ledgers that keep track of cryptocurrency around the world. So the London hard fork is an upgrade of the accounting software.

It sounds trite. But the London hard fork has important philosophical implications. This suggests that cryptocurrencies such as bitcoin and dogecoin could grow.

So now is the time to be careful – even if you still think crypto is primarily aimed at teens with ballpoint tattoos.

The first consequence of the London hard fork is that it will make it easier to buy and sell cryptocurrency. Accounting will be more efficient. Imagine a credit card that processes your purchases faster, with lower fees.

The upgrade is also aimed at reducing the supply of Ethereum’s crypto coin, called Ether, and increasing its price. Overall, this could be an advantage for investors, but a disadvantage for “miners” whose digital machinations put such coins more into circulation.

Either way, the market seems to approve of Ethereum’s decision. Ether saw a rebound shortly after the upgrade went into effect.

But the hard fork raises the eyebrows of crypto obsessives, especially those who cherish blockchain as a massive experiment in fully decentralized governance. Some of them see it as a harbinger of something sinister.

They don’t like the idea of ​​top-down power changing how blockchain works and the value of crypto. The changes to the system, from this point of view, should be addressed by the countless little guys who use the blockchain. Many smaller players would rather accept the “regulation” of millions of trolls over millions of captions rather than by an organization like the Federal Reserve. Or the US Treasury. Or the Ethereum Foundation.

On Hacker Noon, a popular financial technology and crypto blog, a June post called Ethereum for abandoning crypto’s first principle: decentralization. “Ethereum, you are a centralized cryptocurrency,” the headline read. “Stop telling us you’re not.”

Bitcoin.com has long warned that centralization is taking hold all over cryptocurrency: “Many crypto projects behave like the financial institutions they were meant to replace.”

In fact, with the London hard fork, the Ethereum blockchain will only be slightly more scrutinized. Trading will continue to be a bit like leveraging some sort of peer-to-peer casino, trying to get three bunches of cherries.

But the more intense crypto traders care about the principles behind decentralized currencies like bitcoin and ether (the two bigger ones, in market value). What keeps the Ethereum Foundation from becoming just another central bank, doing ‘upgrades’ on ‘upgrades’ of their system, until they set the digital equivalent of rates interest and control supply like banks and nations do?

I must admit that I share some of this concern. I believe in crypto. Of course, this is a game of young people. But it’s not every day that you get the chance to be part of something brand new, philosophically challenging and fun.

The crypto bet I enjoy the most is the risk my brain takes in trying to figure it out. I have certainly invested more brain cells than dollars in the crypto proposal.

But there is more to the allure of crypto trading. Politically, I am in favor of a democracy, with a strong federal government that ensures the safety, health and well-being of a nation. But personally I like railings less. I generally prefer the expanses of uncharted territory to Disneyland.

I was lucky investing in dogecoin, a silly cryptocurrency that surged when Elon Musk promoted it on Twitter and “Saturday Night Live,” but has recently been plummeting. (To my amazement, my household got out just in time.)

So count me among those who are wary of the ongoing overhaul at Ethereum. I understand this means that the ether can benefit from greater stability. But we cannot claim that this is not a blow to the dream of a fully decentralized currency, which is not beholden to any government, bank or central authority.

The good news is that the London hard fork is indeed a fork. Two roads diverge. Ethereum doesn’t insist on one right way; it offers an option. You can trade Ether in a less regulated old-fashioned way, or you can upgrade to a bit more regulation.

We in the old guard have to be thankful for this, although dismally, unsurprisingly, most investors should sign on with the upgrade. They may be financial risk takers, but they are willing to trade the Wild West of the foreign exchange markets for more regulation. We have already seen it: sometimes free people choose repression, up to and including tyranny.

Crypto may be revolutionizing currency markets, but it doesn’t change the endless paradoxes of human nature, at least not yet.

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