After reporting on the story that Miami-based UnitedCorp had filed suit against Roger Ver, Jihan Wu, Bitmain, Bitcoin.com, and Kraken exchange,…
After reporting on the story that Miami-based UnitedCorp had filed suit against Roger Ver, Jihan Wu, Bitmain, Bitcoin.com, and Kraken exchange, CCN had the opportunity to talk to Lawry Trevor-Deutsch, Vice President of Corporate Affairs, about the motivation for the lawsuit.
The first thing that should be disclosed is that UnitedCorp says that it is not acting on behalf of nChain, Craig Wright, or Calvin Ayre, as some outlets and some of the named defendants seem to be insinuating.
They originally entered the blockchain space with an eye toward developing products for Bitcoin miners, and they’ve determined that on-chain scaling is their preference, so they tended toward developing for Bitcoin Cash early on.
The company has two outwardly blockchain-focused product offerings either in development or on the market: BlockNum, a product that fuses blockchain and traditional public switched telephone networks (UnitedCorp started in telecommunications but decided to get heavily into blockchain in 2017) and BlockchainDomes, which are a serious effort at providing energy efficiency and cooling efficiency to mining operations.
About BlockchainDomes, Trevor-Deutsch explained:
"We started researching this whole cryptomining aspect. And it became clear that it was very cost-sensitive, it’s very energy-intensive, and having operations in Canada, we kind of put the two things together and developed what we call the BlockchainDome, which is a facility for miners that uses natural cooling through geothermal air exchange and which catches the heat that can be used for greenhouses. So we have the benefit of fairly low electricity rates in the province of Quebec, we have a natural cooling system that cools the servers, and we have the utility of the heat. So it seemed like with all the bad press that mining was getting, we thought there has to be a more sustainable approach, so that’s what we came up with."
He says they’re already servicing 5,000 mining rigs, and are looking to expand. The product could potentially be sold to other mining outfits in regions where it would be feasible for use. He says that a lot of international mining operations are looking into greener methods of mining, and their product has been getting a lot of positive feedback. He says, “Our core business is providing mining facilities in a more sustainable way for miners.”
This reporter has previously described the lawsuit that UnitedCorp is engaging in as effectively putting centralization or attempts at centralization – perceived or real – on trial. Lawry Trevor-Deutsch will be the first to tell you that he is not a technical expert – he is a corporate executive. He doesn’t need to fully understand the technical nature of a hard fork to understand that certain aspects of the way the Bitcoin Cash hard fork was conducted violate, in his view, the rules of Bitcoin. He specifically used the term “importing votes” later in the call, which is an interesting way to describe the move by Bitcoin.com to convert its regular Bitcoin miners – without their consent or forewarning – to mining the Bitcoin Cash ABC chain at the time of the hard fork in an effort to ensure the stability of the forked chain.
"Like anybody else who is in that business, obviously we are affected directly by what happens in the market overall. If it’s not profitable to mine, people aren’t going to mine. So we look at things that happen in the market, like market manipulation. We’ve been following very closely this scheduled network upgrade on the 15th (of November) and it became really clear to us […] just from a business standpoint, it seemed really clear that there were some shenanigans going on post-fork."
He is referring, of course, to the fork that has led to two versions of Bitcoin Cash, which are both independent of each other and have a roughly equivalent value in the market – combined they would not be equivalent to the previous Bitcoin Cash’s value – even if you adjusted for market losses on the whole, everyone seems to have lost money in this. For readers who are looking for a rundown of how the Bitcoin Cash hard fork came about, this article will help you.
Trevor-Deutsch said it was “not surprising at all” that the Bitcoin ABC side was up to what he describes as shenanigans.
"It’s supposed to be a distributed ledger with no dominating forces, everything goes by consensus, everything goes under democratic principals, but it seems that post-fork, those principals seem to go out the window."
This reporter then asked how the actions of Bitcoin.com actually affected UnitedCorp’s business, to get to the heart of the matter.
It certainly affected Bitcoin miners who were using the Bitcoin pool, whether they were paid in BTC or not, since they were intending to mind Bitcoin Core, not Bitcoin Cash, and it’s unlikely that they consented to this in any way. Even contracted Bitcoin mining contracts were converted. The whole pool was mining Bitcoin Cash that day, and the hashrate was quite a lot higher than normal to boot. Trevor-Deutsch and many others felt this was essentially playing dirty. Trevor-Deutsch explained:
"It affected our business because it affected everybody’s business. I mean, as I said, if mining becomes uneconomical, it affects our business."
As to the centralization, Trevor-Deutsch believes that some of the technical changes Bitcoin ABC have implemented in recent weeks cement Bitcoin ABC and Bitcoin.com’s control of Bitcoin Cash. This echoes the sentiments reported on by this author of developer _unwriter, who says that essentially Bitcoin ABC is fully in control of development of Bitcoin Cash, and have a sort of carte blanche to do as they please with the protocol and thus the network as a whole.
The irony, of course, is that previous to the original Bitcoin Cash hard fork, Roger Ver and his compatriots frequently accused blockchain development firm Blockstream of having similar control over Bitcoin Core, although the number of developers who contribute to Bitcoin and work for Blockstream at the same time is far fewer than the number of developers who contribute to Bitcoin Cash and work for outfits controlled by Bitmain and associated entities.
The lawsuit is still in progress, and so far CCN has not been able to secure an interview with Roger Ver, Jihan Wu, or anyone else on the other side of it. For balance, we will point out that the court must decide whether actual harm has been done to UnitedCorp. The case is extremely important in that it could determine what happens in US jurisdiction when someone is accused of trying to centralize an outwardly decentralized network. It is the first known case of its kind, and CCN will be following it closely.
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Last modified (UTC): December 10, 2018 6:08 PM