Is BCH's fork upgrade changing from its inception to its finale?

Some people vividly compare the BCH fork to a battle for the succession to the throne.

Last year, BCH wanted to inherit the throne, but was blocked by conservatives (BTC core development team). However, BCH was successfully born, and in the following year of development, BCH's performance also beat all other BTC fork coins and became one of the mainstream coins.

But just when people thought BCH was about to achieve great success, the second-generation emperor suddenly "died". After that, the two groups led by Craig Wright and Jihan Wu took sides, and a naked fight for the throne began.

Of course, history does not repeat itself, it just resembles something strikingly similar.

Now, at the time of BCH fork, let Xiaocong take you to review the whole process of BTC fork, and review the stories worth remembering and reflecting on at the beginning of BCH. By the way, let’s take a look at the similarities and differences between the two forks, what roles they play in the long history of Bitcoin development, and what impact will they have on the community?

Reasons for the fork: Expansion & internal strife

As we all know, the reason for BTC fork is because of capacity expansion.

Bitcoin transaction data is stored in blocks. The size of the block will limit the amount of data that can be stored. Before the BTC fork, the block size was 1M, and each character was at least 250KB, which means that a block can process a maximum of 7 transactions per second.

As the number of users increases, more and more people are queuing for transactions, which not only makes the network increasingly congested, but also makes transaction costs increasingly high. Therefore, capacity expansion is imperative. However, people have serious disagreements about the way to expand capacity, which led to the BTC fork.

If the BTC fork is a historical necessity, then the BCH fork seems a bit childish, because the BCH fork is purely caused by infighting within the community.

Once upon a time, Craig Wright and Jihan Wu jointly made great contributions to the birth of BCH.

However, within a year, the consensus between the two parties broke down. The disagreement mainly revolved around whether to continue to expand the capacity, whether to return to the Bitcoin route or to follow the development of the crypto market, and more importantly, the interests of the mining pool behind it. Through the hard fork, the operator of BCH will be determined by the miners and computing power of both parties.

Both sides have their own reasons and the situation remains deadlocked.  

The shift in focus of forks: from community discussions to battles among bigwigs

The intensity of each fight for the throne is self-evident.

When it came to the BTC fork, people were discussing more about the expansion method - hard fork or soft fork.

Xiaocong has mentioned in previous articles that hard forks will generate new currencies, and there may be more than one new currency, which will cause the blockchain on which Bitcoin exists to form a competitive relationship, which may lead to large price fluctuations. Soft forks are only a temporary solution and can only keep the network unobstructed for a few years. In the future, it will need to continue to expand, which will affect the stability of the system. Both have their pros and cons.

(Picture from OKcoin)

So at that time, there was a heated debate within the community about whether to have a hard fork or a soft fork.

Gavin Andresen, chief scientist of the Bitcoin Foundation, has personally expressed his views on the expansion controversy on many occasions.

I think it's just a matter of priorities and risk-benefit assessments. The best way to see if something will work is to let the public try it themselves. Maybe many things will fail, but as long as some of them succeed, that's not a problem.

In addition, some people on the forum suggested voting directly.

(Picture from OKcoin)

This move began to show results. In August 2017, BCH became the first hard fork of the Bitcoin blockchain, and also pioneered the forked coin.

But when it came to the BCH fork, the discussion in the forum was not as heated as the war of words between Craig Wright and Jihan Wu. The two seemed to have been at loggerheads since the very beginning of the dispute, going back and forth and neither giving in.

Jihan Wu:

• Coingeek is controlled by the fake Satoshi Nakamoto;

• The entire BCH community is working together to resist the fake Satoshi Nakamoto, and the resistance to the cult leader is a testament to the inherent strength and savvy of the BCH ecosystem;

• There will be no more troublemakers in the BCH community after this new block!

Craig Wright:

• I plan to destroy Bitmain with money;

• Whether it is a quick victory or a war of attrition, we will only wait for your collapse. You lack funds, but we do. This game will continue until Bitcoin ABC fails.

• Just a reminder that the hash race is a marathon, not a sprint. Never assume victory is in sight too early…

The war of words attracted a lot of onlookers, and both sides also showed off their skills.

Xiaocong mentioned in a previous article that before and after the fork, the two sides fought over computing power, price and nodes. On the day of the fork, Bitcom.com (Wu Jihan's side) suddenly had a large amount of hidden computing power, and was once suspected of cheating with money.

Therefore, before and after the fork, Wu Jihan's side made much faster and more transactions than Craig Wright's side.

But this fork is not a simple sprint, but a marathon.

At present, both sides are running their own chains, but the competition has never stopped.

According to Coin Dance data, the current BCH ABC block height is 557415, and the BCH SV block height is 557347. BCH ABC is 68 blocks ahead of the BCH SV camp. 79% of Bitcoin Cash miners are mining BCH ABC, while only 21% of miners support BCH SV.

The website also allows users to intuitively see the changes in the hashrate (estimated based on the block interval and block difficulty) of both parties. Currently, the hashrate of BCH ABC is about 5,400PH/s, and the hashrate of BCH SV is about 1,400PH/s. However, from the overall trend, the computing power of BCH SV seems to be more constant, while the computing power of BCH ABC fluctuates violently.

(Source: Coin dance)

What is the impact of the fork?

Today, in the huge Bitcoin ecosystem, miners, exchanges, applications, users, and investors have long become an inseparable part of the ecosystem. If any link goes wrong, it will affect the stability of the entire ecosystem.

Therefore, although each fork is a game between different forces, it is more of a consumption of funds and technology.

The most direct impact caused by the BTC fork was price fluctuations.

According to Wall Street Journal, from July 15, 2017 to August 15, 2017, the price of BTC rose from $1,914 to $4,387, an increase of 129%; while BCH, which was forked from BTC, has been losing price since the fork date. By mid-August, the price had fallen from a high of $1,213 to $298, a drop of more than 75%.

Let’s look at the BCH fork this time.

According to Wall Street News, since November, BCH's market has been like a roller coaster. In just 20 days, its price fell from a high of $644 to $447, a drop of 44.7%. BTC, the "royal grandfather", was also implicated. During this period, BTC's market rose in a short period of time, but then plummeted, with the price falling from $6,607 to $4,976, a drop of 32%.

As of now, BCH ABC is trading at $212.6 and BCH SV is trading at $62.12.

Analysts pointed out that the approaching fork test will intensify market panic, and the accelerated exit of some speculative funds will cause huge price fluctuations.

According to Lianxiang Finance, since BTC successfully forked BCH, dozens of different versions of forked coins have emerged in just a few months. For example, forked coins such as BCD, BCX, and BTG do not have any practical application scenarios. More than 90% of these forked coins are disguised ICOs, the purpose is to raise money, and investing in forked coins is very risky. In addition, it is a bear market now, and there is no off-market capital entering. The amount of funds in the market alone is definitely not enough, and the risk of investing in forked coins is even greater.

Of course, risks and opportunities coexist.

BKCM founder Brian Kelly said that we are in the midst of a "cryptocurrency civil war" and that the decline in BTC stems from market concerns that the BCH hard fork and upgrade will cause chaos in the BTC and BCH markets, but the impact of this event is short-term and may be an opportunity.

It is undeniable that the two forks have injected new vitality into the market. The income of miners has been increased to a certain extent, investors have more choices, and the entire digital currency industry chain has become increasingly perfect.

But the question is, are the frequent disagreements and forks, the use of computing power wars to resolve conflicts of interest, the lack of replay protection that puts user assets at risk, and the infighting within the team that shakes the entire currency market also shaking people's faith in Bitcoin, Satoshi Nakamoto, and a secure decentralized system?