Bitcoin Knots Developer Accuses Major Exchanges of Selling 'Fake Bitcoins'

Luke Dashjr, the developer of Bitcoin Knots, has claimed that major exchanges are peddling counterfeit bitcoins. This comes days after the Bitcoin hard fork separated his BLAKE2b chain from the primary network.

The developer points the finger at platforms that chose not to operate their own full nodes. Meanwhile, the broader market has largely dismissed his chain as non-viable.

Accusation of Fake Coins Follows Bitcoin Hard Fork

The dispute began on social media platform X. Yan Pritzker, co-founder of Swan, posed a question to Dashjr about whether he genuinely believed exchanges were bypassing node operation.

In response, Dashjr stated that skilled operators would never list the SHA-256 chain. “If they did, they wouldn’t be selling fake bitcoins now. Unless you’re saying it’s intentional fraud,” he posted.

If they did, they wouldn't be selling fake bitcoins now. Unless you're saying it's intentional fraud

Earlier in that conversation, he branded established exchanges as incompetent, alleging they were blindly following former miners away from Bitcoin. However, this perspective relies on his own definition of which ledger is legitimate. For months, Dashjr has argued that spam data on the main chain constitutes an attack on the network. David Schwartz, formerly Ripple’s CTO, called that argument absurd.

He also refers to the SHA-256 chain as “Spamcoin” and demands that exchanges cease promoting it under the Bitcoin name.

The Bitcoin hard fork permanently replaced SHA-256 with the BLAKE2b algorithm. This change renders all existing ASIC mining hardware obsolete. Dashjr stepped down from his roles as chairman and CTO of mining pool OCEAN prior to the split and now heads CONVOY Mining.

Split Gets Little Attention from Miners and Traders

To date, not a single major exchange has added the forked coin to its offerings. One small platform began accepting deposits under the BTCB2 ticker, where bids climbed to $82 earlier this week.

Bitcoin (BTC) in the meantime is trading around $80,670, having gained 3.83% over the past 24 hours. A 131.7% bid-ask spread on that exchange indicated virtually no real interest.

Mining support for the Bitcoin hard fork also failed to materialize. Hashrate signaling for the BIP-110 fork topped out at 2.53%, well below the required 55% threshold. A previous attempt in August ended after just two blocks.

Since the September 1 split, hashrate on the new chain has continued to decline. Blockstream CEO Adam Back provided a succinct summary of the situation.

“Live by the fork, die by the fork,” he said.

Consequently, Dashjr now finds himself largely isolated. The survival of his fake bitcoins claim will depend on whether he and his supporters keep mining the BLAKE2b chain.