BCH forks again: NODE development team versus ABC development team

OKEx’s announcement further spread the news of BCH’s fork. The exchange was the first to announce its support for BCH’s fork, and its BCH-related C2C transactions, contract transactions, mining pools and other businesses will be adjusted. Huobi also issued an announcement to deal with BCH’s fork.

BCH forked again, exposing the differences between the core development team BCH ABC and BCH Node to the public. The former is well known to the outside world for the fork in 2018 and is the main development team of BCH. The latter was born in February this year and was established to oppose BCH ABC's IFP (Infrastructure Financial Plan). The initiator was Freetrader, an early BCH developer.

In February this year, BCH ABC announced the IFP plan, requiring miners to share 8% of their income with its technical team as a development fund. This move caused strong controversy in the overseas community, and Freetrader and others chose to "start their own business" and support the BCH version without IFP.

As the disagreement fermented, the fork became inevitable. A BCH community member revealed that the majority of the Chinese community remained neutral, while in the Western community, BCH Node gained more support. The futures performance of the two forked coins on the exchange CoinEx also seems to illustrate this point. The price of BCHN is more than 9 times that of BCHA (BCH ABC).

The confrontation between the two major camps will push the BCH community towards division and make some community members discouraged about the future of BCH.

Exchanges are preparing for BCH forks

Two years later, BCH, the "prince" of Bitcoin, has once again reached a fork in the road.

In November 2018, BCHABC and BCHSV made a big show of competing in a battle of computing power. This hard fork first attracted attention from exchanges or the market level. How to name the two chains and assets is also a topic of concern for BCH users.

On October 28, OKEx took the lead in releasing an announcement on the BCH fork event handling plan. The announcement stated that BCH is expected to undergo a hard fork on November 15. There are currently two node solutions, BCH ABC and BCH Node (BCHN). Therefore, users who hold BCH before the fork may obtain two new assets due to the two chains parting ways.

This is more commonly known as "splitting the sugar" in the cryptocurrency circle. Due to the market uncertainty that may be caused by the fork, OKEx will suspend the C2C coin issuance and trading function of BCH on November 8, and at the same time, BCH contracts, lending, mining pools and other businesses will have corresponding emergency adjustments.

During the last fork, the two opposing camps chose to use a computing power war to compete for the "naming rights" of BCH.

This time, some exchanges have made preparations in advance to facilitate user identification. OKEx clearly stated in the announcement that after the fork is completed, the platform will refer to the transaction prices of the forked coin pairs on various mainstream exchanges, select the chain with the higher price to inherit the BCH name, and the tokens of the other chain will be airdropped to the user's fund account at a ratio of 1:1.

Shortly thereafter, Huobi released an announcement on October 30 to support BCH's potential fork upgrade. Similar to the measures taken by OKEx, Huobi will suspend BCH currency-to-currency trading, leveraged trading and other businesses on the eve of the fork.

In terms of naming, Huobi is slightly different from OKEx. Huobi said that since there is no fair BCH fork naming standard in the current BCH community, Huobi will set a fork transition period. After the community reaches a consensus on the BCH naming, Huobi will end the transition period and rename the two forked coins. Before the renaming, the two forked coins were named BCHA (BCH ABC) and BCHN.

Another exchange, CoinEx, has provided futures trading services for the two forked coins in advance. On CoinEx, users holding BCH can already redeem forked coins in advance. 1 BCH can be exchanged for 1 BCHA and 1 BCHN. CoinEx provides a trading market for the two forked coins. According to data on November 1, BCHA is temporarily quoted at 0.07 BCH, and BCHN is quoted at 0.92 BCH, which is far ahead of BCHA in price.

BCHN "futures" price is higher than BCHA

Judging from the futures price, the signal of being optimistic about BCHN is very obvious. Jiang Zhuoer, a BCH supporter and founder of Litecoin Mining Pool, explained this on Weibo, "The price ratio of BCHN to BCHA is about 9:1, there is no suspense." He said that the BCH fork solved a problem - the development team is not BCH, the community is BCH, even the main development team cannot violate the community consensus, otherwise it will be abandoned by the community.

The main development team mentioned by Jiang Zhuoer is obviously the more well-known BCH ABC team. Judging from his statement, ABC seems to be abandoned by the community.

Community divisions arise over infrastructure financing plan

If it weren’t for this fork, few people would know that there is a BCHNode (BCHN) development team in the BCH community. In fact, this development team was established not long ago. Public information shows that BCHN was established in February 2020 and is a new force in the BCH community.

According to its official Weibo, all of BCHN's current income comes from donations, about half of which was raised through the BCH financing platform Flipstarter. Major donors include overseas investor Marc de Mesel and developer Georg Engelmann.

In an official promotional video of BCHN, it can be seen that the team is mainly composed of overseas technical developers, including BCHN initiator, chief maintenance officer Freetrader, maintenance and development personnel sickpig, Calin Culianu, developer BigBlock If True, etc.

Among them, Freetrader and sickpig are both early developers of BCH. In a public interview, Freetrader said that he participated in the development of the Bitcoin ABC client with Amaury Séchet (BCH ABC chief developer) and others in 2017, and worked with other nodes to develop the BCH upgrade specifications.

Main members of the BCHN team

According to a person in charge of the market in the BCHN community, BCHN is responsible for maintaining the BCH full node software, website and infrastructure. The short-term goal is to establish a professional mining node to ensure that the network development is not hindered and to provide stable upgrades required by all sectors. Specific tasks include sorting out and analyzing the existing BCH difficulty adjustment algorithm (DAA) and providing alternatives, investigating the bottlenecks of the existing software in various situations on the unconfirmed transaction chain, providing a more reliable test network and related infrastructure, and establishing an ecosystem communication mechanism.

"The long-term goal of BCHN is to support BCH's progress towards electronic cash. BCH must remain permissionless, useful, and affordable for everyone." The above person told Fengchao Finance.

It seems that the vision of BCHN is consistent with the long-proclaimed goal of BCH ABC. So, why did the disagreement arise? Why is the BCH community facing a split again? This needs to start with an announcement previously released by BCH ABC.

In February this year, BCH ABC released the IFP (Infrastructure Financial Plan) on its official website, in which the ABC team required miners to share 8% of their income with its technical team as a development fund. This policy triggered a strong backlash.

Some miners expressed their understanding and approval of the ABC team’s approach, while others expressed great dissatisfaction. They believed that the community’s over-reliance on the ABC team was not a good thing.

At the BCH 2020 Developer Conference, Amaury Séchet said that the emergence of IFP was due to repeated requests from the Chinese community, which is not very controversial in China but is very different in the West.

Freetrader and others from the BCHN team are the main opponents of the IFP plan. They jointly formed BCHN and deleted the Infrastructure Financing Plan (IFP) from the code base. A member of the BCHN team said that the actual desire to establish BCHN is to unite the BCH ecosystem and avoid destructive divisions.

The IFP plan was indeed shelved for a time, but the BCH ABC team released a two-month upgrade guide in September, which clearly stated that the upgrade would introduce the IFP coinbase rule. The team also emphasized that this does not mean that miners will lose 8% of their income. Due to the difficulty adjustment, mining income will only decrease by 0.2%. Even so, IFP still faces opposition.

"The introduction of such a tax, no matter what people call it, will lead to many new problems, such as conflicts of interest, suppressing the development of BCH through a central point, and so on." BCH ABC's opponents believe that IFP violates the spirit of decentralization, and anyone who believes in freedom and Bitcoin principles should decisively reject this regulation.

Who will get the BCH title?

BCHN market participants told Fengchao Finance that due to the behavior of BCH ABC, a short-term fork is likely to occur. It seems that the second fork of BCH is inevitable.

A BCH community member revealed that in the domestic community, most people maintain a neutral view on the fork, including Yang Haipo, CEO of CoinEx and ViaBTC mining pool. He tweeted on August 23 that ViaBTC and CoinEx will remain neutral.

However, in the Western community, most BCHers do not agree with ABC's move, including BCH supporter Roger Ver. There are even BCH community members who wrote that they hope that ABC's chief developer Amaury will step down. It is worth mentioning that in addition to ABC and BCHN, BCH has other active development groups, one of which is Bitcoin Unlimited, which also opposes IFP. From the price comparison of BCHA and BCHN on CoinEx, the BCHN camp has a leading advantage.

So, if the fork really happens, which party will eventually get the name BCH?

The aforementioned BCHN market person said that the naming of BCH is granted by the ecosystem and all users, and BCHN will keep the ecosystem as united as possible to maintain the value of BCH and its network effect. In other words, the ownership of the BCH name still needs to be determined by community consensus.

Another group closely related to the BCH fork is investors in the secondary market.

PayPal Finance researchers believe that the benefit of hard forks is that users can participate in the distribution of "candy". The community did not seem very happy when BTC forked into BCH. However, some people still look forward to the BCH fork this time, because it can bring about the hoarding effect like BTC.

Earlier, a Weibo celebrity publicly stated that by buying a large amount of BCH before the fork and hedging through the contract market, one can get the new forked coins without loss.

Judging from the market trend, BCH has indeed strengthened recently. From October 8 to October 28, BCH rose from $220 to $280, a 27% increase in 20 days. However, PayPal Financial researchers pointed out that after the fork is completed, the price of BCH may fall back.

With another fork imminent, some BCH supporters are worried about the future of BCH. As a currency forked from BTC, BCH has not developed satisfactorily in recent years. In August this year, Yang Haipo said that "BCH has suffered from ABC for a long time, and it is time to make changes", which seemed to indicate that he intended to fork, but there was no further news.

In the secondary market, many investors have lost confidence in BCH. They believe that the ongoing conflicts and disputes over interests in the BCH community have led to the continuous weakening of the community's power and the continuous decline in value. "BCH already has a deep-rooted fork coin gene, and it may continue to fork endlessly in the future." A BCH holder said helplessly.