The Impending Bitcoin Cash Hard Fork
On November 15th, Bitcoin Cash (BCH), the world’s fourth-largest cryptocurrency by market capitalization will be undergoing a Hard Fork.
The coin, which was initially forged to compete against its big brother, Bitcoin, has had a difficult time reaching consensus within the development team and has sparked a heated debate in recent weeks.
Following the news of an impending hard fork, daily average trading volumes have increased from $200 million to $1.4 billion, which subsequently has led to price gains of close to 40% over the past week, cooling off over the last couple days as the fork nears.
Bitcoin Cash was first introduced in mid-2017 by Bitcoin developers who recognized a problem with Bitcoin’s limited block size. A small block size hinders scalability, meaning, fewer transactions can be processed on the blockchain network. BCH was introduced to implement a solution to this problem, truer in the eyes of its supporters to Satoshi’s original vision of Bitcoin as peer-to-peer electronic cash.
The network achieves this by incorporating a block size which is eight times larger than that of BTC. As a result, the network can offer cheaper transfer fees and faster transfer times.
To execute these new proposed changes, on August 1, 2017, the Bitcoin blockchain split in two. Bitcoin Cash was forged and existing Bitcoin investors received one BCH for every BTC they owned.
Hard forks on the Bitcoin Cash blockchain are not a new phenomenon. The network is set to split every six months to embody new coding changes. However, for the upcoming fork, no consensus was reached and a debate between two prominent crypto-pioneers was sparked.
Bitcoin Cash ABC vs Bitcoin Cash SV
The two rival solutions which caused so much attention in recent weeks are Bitcoin Cash ABC (most famously backed by Roger Ver) and Bitcoin Cash Satoshi Vision (SV) (backed primarily by Craig Wright).
The two protocols have differing visions for the future of BCH. On one hand, BCHABC proposed several critical technical improvements, including the replacement of the current transaction ordering with canonical transaction ordering.
On the other hand, the BCHSV camp believes that an increase in the block size will be necessary. ABC will remain with the current 32 MB block size, whereas SV plans to increase it to 128MB.
Both parties aim to make the Bitcoin Cash network more scalable. Canonical transaction ordering, proposed by BCHABC, would replace the current topological ordering (TTOR) system and allow for less complex and more efficient block validation and encoding. On top of that, oracles and cross-chain atomic contracts, which are the building blocks of smart contracts, will be introduced.
Craig Wright (backing Bitcoin Cash SV), who has previously proclaimed himself to be Satoshi Nakamoto, is strongly against canonical transaction ordering. He claims that there is insufficient supporting evidence and not enough testing done to ensure its success.
Increasing the block size to 128 MB would enable a vast increase in scaling, making transactions faster and more efficient. Bitcoin SV’s goal is to restore the original Bitcoin protocol, making it a solely peer-to-peer cash transaction cryptocurrency.
Amaury Séchet, the lead developer of Bitcoin ABC, argues that a future increase in block size will eventually be necessary. In return, however, the network will become more vulnerable to attacks.
Internal War in the Bitcoin Cash Community
The contrasting views between Craig Wright and Roger Ver have led to fierce debates. Over the past few months leading up to the hard fork, the two figureheads have exchanged several threatening messages.
For instance, Craig Wright sent a strongly worded email to Roger Ver, stating that he will eliminate the competing coin:
“If you want a war, I will do two years of no trade, nothing.”
“If you want ABC, you want s***coins, welcome to bankruptcy.”
“Side with ABC, you hate bitcoin, you are my enemy. You have no f***ing idea what that means. I AM Satoshi”
Following this email, Roger Ver responded in a 21-minute YouTube video, explaining that he finds Wright’s behavior immature and that his technical knowledge is limited.
In the past, Ver has expressed his negative opinion regarding Wright’s integrity and capabilities. In an interview with CNBC, for example, Ver named Wright “Faketoshi” and on top of that, called him a “dumb person”.
Both proponents are well known for their aggressive opinions and assertive actions, thus it is not a big surprise that a “civil war” broke out between them.
Days before the hard fork
Now, just days before the long-awaited hard fork, there is plenty of high-stakes drama and action to be expected.
Both coins have sufficient backing from various significant organizations. Bitcoin Cash ABC has support from the Chinese mining giant Bitmain and BitPay, along with Coinbase.
Bitcoin SV receives help from the single biggest BCH miner, CoinGeek.
Pre-fork trading is well underway. Future contracts for both BCHSV and BCHABC can be actively traded on Poloniex and HitBTC. It is revealed that market support for Bitcoin Cash ABC appears to be significantly higher than for Wright’s Satoshi Vision, but this ratio has been fluctuating.
A day to remember
Investors who are interested in taking part in the fork will need to split their coin by holding BCH on supporting exchanges or instead by sweeping keys via supporting wallets after the fork is completed.
Although certain predictions about price movements can be made, no one will be able to predict the market’s reaction to this unique situation. When BCH split from BTC in August 2017, speculators expected the price to be half of BTC’s price. This optimistic prediction never became reality.
On November 15th, once the fork occurs, the heated dispute between Ver and Wright might finally be settled once and for all.
Or not. If the split doesn’t go his way, Wright has vowed to continue with an all-out war against competing solutions, using 51% attacks, market dumping, and empty-block mining to bring rival networks to their knees.
While Wright’s and Ver’s opinions and perspectives may be highly divergent, it will ultimately — hopefully — be up to the community to have the final word in this long-lasting controversy.
This article intends to depict an unbiased view of the upcoming chain split without taking a side in the controversy. It was written for informational purposes only.