Bitcoin Investment and Strategy
Last spring the topic of Bitcoin betting was brought up during a conversation on BitcoinTalk, a website dedicated to the topic of Bitcoin. The conversation was started by an investor in the online currency named Roger Ver. He challenged other users to bet on which part of a Bitcoin would be valued more if it were split into its two blockchains. The results of this wager were not only the sizable reward of over one million US Dollars in the form of Bitcoin posted by Roger Ver, but also what would happen to Bitcoin Unlimited in the future.
The bet to find an answer came when Roger Ver was messaged by another investor named Loaded who wanted to make a one for one deal, trading his BTU for Roger Ver’s BTC. When Roger Ver agreed to the trade the problem of dealing with the details arose. Both BTU and BTC had different, ever-changing values, so finding out the right balance was key. There was also a time limit on finding an answer. Bitcoin’s community is favoring a hard fork to the currency which would split the currency into two separate parts that would increase or decrease independently.
Researchers from Boston University, the University of Illinois and University College London began to work together to find the best solution to the wager. The only one that they could create had a lot of steps and could easily be missed by both user and technical error. First, Roger Ver and Loaded would take the amount they decided on in BTC, which was 60,000 BTC and wait for the hard fork to occur. The hard fork would then split their BTC into equal parts BCT and BTU. Roger Ver would then trade his BTC for Loaded’s BTU, giving both of them a total value of 120,000 of their selected currency. The problem was, how could they get both users to commit prior to the hard fork? Also, what if the hard fork never happened?
The solution that the researchers found was similar to an atomic swap that required both a CheckTimeLockVerify which would allow Roger Ver and Loaded to set their transactions to occur in the future, and a hashlock which is a hidden image that would allow both of them to unlock their transactions. For the trade to occur, Roger Ver would need to send Loaded a hashlock, then they would both need to sign the funding, swap and forfeit transactions they created and then the CheckTimeLockVerify would complete the transaction after the hard fork occurred.
Now the only thing left to do is wait. Roger Ver is in favor of the BTU and has been doing everything he can to raise its value. However, BTC is currently more. Unless the value changes Roger Ver is likely to lose money in the deal either by trading away his BTC or by backing out of the trade which would cause him to forfeit the only currency to Loaded anyways. Loaded has already asked the Bitcoin community for the trading software necessary to carry out the bet.