A battle brewing between rival camps of the Bitcoin Cash (BCH) community has devolved to the point of threats and will likely lead to a split of the cryptocurrency on November 15th when the protocol undergoes its next planned update. The upcoming Bitcoin Cash fork will most probably see BCH split into two coins. One of those coins is supported by early bitcoin investor Roger Ver and Bitmain CEO Jihan Wu while the other side is supported by Craig Steven Wright who has previously made dubious claims to be the original creator of bitcoin.
WTF – What the Fork?
In software protocol development, anytime a change is made to the code and a new version is released it is called a ‘fork’. If the new version of the protocol is backwards compatible with the old (i.e. the two versions can work together) then it is called a ‘soft-fork’. If the two versions are not compatible with each other it is called a ‘hard-fork’.
Based on the decentralized nature of cryptocurrencies forks can get very complicated very quickly due to all the different stakeholders involved. In hard fork situations for cryptocurrencies, it is possible that both versions of the protocol can continue to exist after a change if there is enough support from developers, miners and users of each. This effectively creates an entirely new cryptocurrency coin and holders of the original coin are entitled to both the new and the old coin.
History Repeating – Forking into a Fork
Bitcoin Cash (BCH) is itself the result of a hard fork from Bitcoin (BTC) which occurred on August 1, 2017. At the time there was intense debate among the bitcoin community on what changes needed to be made to the protocol for bitcoin to scale. One group wanted to support additional scale by increasing the block size while the other wanted to implement a change called Segregated Witness (Segwit) which reduced the amount of information needed to be stored in each block. Both proposals allowed more transactions to fit into each block and thus increased the transaction rate of the protocol. Since there was support for both proposals from developers, miners and users both coins have continued to hold some value.
In the case of bitcoin cash, the protocol is planned to be updated every six months and the next update is planned for November 15th next week. Two competing proposals have emerged for the upcoming bitcoin cash hard fork:
- Bitcoin ABC proposal would add new features allowing for atomic swaps
- Bitcoin SV (Satoshi Vision) proposal would increase the block size from 32MB to 128MB
The changes proposed by Bitcoin ABC, which is a development group responsible for creating one of the more popular implementations of Bitcoin Cash, has thus far been supported by Roger Ver and Jihan Wu. Ver is an early bitcoin investor and has been a vocal supporter of Bitcoin Cash since its inception. He is also the CEO of Bitcoin.com a site which provides a bitcoin wallet as well as promotes bitcoin cash (BCH) as being superior to bitcoin (BTC). Meanwhile, Wu is the CEO of Bitmain, the largest crypto mining equipment maker in the world, operator of several very large mining pools and reportedly a major holder of bitcoin cash.
The changes in the Bitcoin SV proposal are primarily supported by nChain, a blockchain research and development firm, whose CEO is Craig Steven Wright. Wright is a very controversial figure in the crypto community as he has previously claimed that he was the original creator of bitcoin, Satoshi Nakamoto, a claim which has been pretty thoroughly debunked. Nonetheless,
Given that both proposals have thus far received support from users, developers and miners it is quite possible that both could survive after the hard fork thus creating two versions of bitcoin cash: BCHABC and BCHSV.
The Drama of the Upcoming Bitcoin Cash Fork
Given that Bitcoin Cash is currently the fourth largest cryptocurrency by market cap (worth around $9.75 billion USD at the time of publishing according to Coinlib), there is a substantial amount at stake for both sides.
This disagreement has devolved into threats and name calling between the two sides. The Bitcoin ABC proposal feature to enable atomic swaps uses a technical feature called DSV. Wright has claimed that he is intent on taking legal action against any miners who process transactions using the Bitcoin ABC fork.
I will ensure that ANY miner passing DSV can be held liable (under the law of the UK, China and US, they can be)
The end will be a drop in value for those using DSV
And, I will help ensure those who lose claim against this act.
— Dr Craig S Wright (@ProfFaustus) November 8, 2018
Here is a great twitter thread documenting some more of the drama that has taken place between these crypto personalities:
(Thread) If you are not following the Soap Opera around the Bitcoin Cash hard fork, you are missing all kinds of excitement today. pic.twitter.com/nmzc4b9OfE
— Ray [REDACTED] (@RayRedacted) November 8, 2018
What this Means for Bitcoin Cash Investors
Whichever of the proposals you may support, if you own Bitcoin Cash (BCH) it is very important to check with your exchange and/or wallet provider to find out their policy regarding the upcoming fork.
Below are some links to a few of the major exchanges and wallets latest statements or policies regarding the upcoming bitcoin cash fork.
If you don’t see the exchange or wallet where you are currently storing your BCH above then we would strongly recommend you get in touch with their support team.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.