Miners refuse "forced donations", BCH is about to fork again

If nothing unexpected happens, BCH will have its second fork on November 15. The two chains that are about to go their separate ways are BCHA and BCHN.

In the history of blockchain, every time there is a fork, a legitimate or illegitimate chain is always chosen. This time, the BCH community has voices leaning towards BCHN.

Who is the real BCH?

When blockchain communities make decisions, they often do so based on voting results or hard indicators such as coin price and computing power. Take the first fork as an example. In November 2018, BCH forked into BCH and BSV. Which is better, BCH or BSV? The market makes its judgment based on the most intuitive computing power growth and coin price.

BCH will undergo a second fork on November 15. Exchanges represented by CoinEx and OKEx have called out the slogan "The highest bidder wins". The two exchanges said in September and October respectively that "after the fork is completed, the chain with a higher price will be selected to inherit the name of BCH."

Data from the trading platform CoinEx shows that as of writing, the price of BCHA tokens is 0.1 BCH, a 24-hour drop of 12.7%, while the price of BCHN is 0.9 BCH, a 24-hour increase of 2.69%. If nothing unexpected happens, BCHN wins.

If measured from the perspective of computing power share, more than 700 of the latest 1,000 BCH blocks were mined by the BCHN community (including BCHU, BCHN and other nodes), and 71.3% of the BCH blocks in the past seven days were mined by the BCHN community. BCHN's computing power accounts for more than half of the BCH network, and BCHN also wins in computing power.

BCH mining output, image source: Coin.dance

Community opinions can reflect public opinion. After the community represented by CoinEx founder Yang Haipo officially announced the fork in August, BCH evangelist Roger Ver tweeted his position: "Bitcoin ABC announced that it will fork away from BCH, wish them good luck." The implication is that he believes that Bitcoin ABC does not represent the real BCH.

Searching for "Bitcoin ABC" on Twitter, you can find a lot of pessimistic comments. For example, a user named "Josh Green" advised users not to run Bitcoin ABC (software) and not to refer to their website. He wrote on Twitter that "Bitcoin ABC wants to impose an 8% tax on miners, which has been opposed by the community, miners, and futures markets."

According to BlockRhythm, Bitcoin ABC and its chief developer Amaury once launched a dynamic difficulty adjustment (DAA) algorithm proposal Grasberg, which seems to have not received support from community members other than the ABC team itself. This shows that the overall BCH community opinion is not inclined towards Bitcoin ABC. In terms of public opinion, BCHN also wins.

The outcome of the second BCH fork seems to be no longer a mystery.

Why fork?

In the blockchain world, forks are caused by different philosophies, conflicts of interest, and freedom of choice. The fork slogan shouted by the BCHN community is "BCH has suffered from ABC for a long time." PayPal Insight wrote in its analysis of the BCH secondary fork that "some influential BCH community members have expressed concerns about the community's over-reliance on the ABC team."

There are currently three mainstream teams promoting the development of BCH: Bitcoin ABC, Bitcoin Cash Note, and Bitcoin Unlimited, among which Bitcoin ABC has played a very important role. An introduction document shows that Bitcoin ABC has been leading the development of the project, and has released 65 software versions so far, and conducted more than 25 million tests for the BCH network.

At present, it is the BitcoinABC team that disagrees with most BCH community members. In response to a Weibo user’s question about whether BCH should fork, CoinEx founder Yang Haipo said: “BCH SXs are still arguing over whether to start eating eggs from the big end or the small end. It must be forked!” It can be seen that Bitcoin ABC has differences with the community on the development path and focus of BCH.

In addition, the real trigger of the fork was Bitcoin ABC's desire to "force taxation" on miners. An update note released by Bitcoin ABC mentioned: On November 15, BCH will add a new financing function, and 8% of the mining income will be used to provide development funds for the network. Based on this, the team can recruit a large number of technical talents for network development.

BCH Update Notes

This update is what the community refers to as the “Coinbase Rule,” an IFP, or Infrastructure Finance Proposal, where Bitcoin ABC wants to impose a mandatory tax of 8% of miners’ mining revenue to solve the long-term problem of development funding.

According to industry practitioner Nangong Yuan, Wu Jihan had promoted IFP before, and Jiang Zhuoer had previously held a neutral attitude towards the "miner donation plan", and his mining pool was ready to support IFP. However, at present, perhaps because Coinbase ABC is arbitrary in promoting project updates and IFP affects the "cake" of the miner group, Coinbase ABC has received little support.

The two parties of the BCH fork are the Coinbase ABC team (BCHA) and the community represented by Yang Haipo (BCHN). Currently, important BCH participants including Roger Ver and Jiang Zhuoer support BCHN.

In fact, the source of developer income is a common problem in blockchain projects. Some development teams are indeed financially strapped, and developers work full-time or part-time on projects, but can only rely on limited and unstable community donations to solve funding problems, or even "rely on love" and do free development work. However, this situation does not apply to BCH.

BCH is forked from Bitcoin. All BTC in the Bitcoin network are output as mining rewards for miners, and the development team does not receive development rewards (development funds) from the chain. However, it is worth noting that Bitcoin has fans from all over the world, and thanks to the expected increase in the price of the currency, at least 10 organizations have provided financial support to the Bitcoin development team.

As the most important fork of Bitcoin, it can be inferred that the situation of BCH is similar. Although there is no development funding from the chain itself, the BCH development team should not be short of donated funds.

In fact, Twitter user @im_uname recently tweeted that Bitcoin ABC’s fundraising goal for development by April next year - US$3.3 million, equivalent to about 14,500 BCH, has been completed by half by June this year, which means that the team has raised more than 7,000 BCH.

Information source: Twitter

Bitcoin ABC is not short of funds. @im_uname continued on Twitter: "Bitcoin ABC may just want more, endless funds."

Fork benefits: pull trays and candy

Although the community is not optimistic about the BCHA after the fork, it seems to welcome the fork.

On October 28, OKEx issued an announcement that it would choose a higher-priced chain to inherit the name of BCH, and airdrop tokens of another chain to users at a 1:1 ratio. Subsequently, the price of BCH rose against the trend, once rising to around US$270.

Although the gap between the two chains is already huge, considering that "the chain with a higher price can inherit the BCH name", there is still about half a month until November 15, and the two sides of the fork may stage a "price-pulling war". Many users on Bikan believe that BCH's recent trend is "pull-up".

Information source: Bikan

From another perspective, the BCH fork will be a universal benefit event for coin holders, because users can get free token airdrops. After Jiang Zhuoer proposed the fork in the community, he said, "I support good-faith forks (no name grabbing + replay protection), and give everyone candy." In order to get the airdrop candy, some users have already bought coins and hedged.

As of now, UAICoin data shows that BCH ranks fifth in market value, with a price of $259.82, down 2.04% in 24 hours. Bibi News will continue to update the situation of BCH's subsequent forks. In addition, Bibi News reminds readers that the above is not an investment advice, and readers are advised to pay attention to the risks of crypto investment.