BCH is about to hard fork Bitcoin's "eldest grandson" is coming

Since November 2, BCH (Bitcoin Cash) has been like a wild horse that has broken free from its reins. "The price has been rising wildly, going against the wind, illuminating the long bear market and ushering in the prelude to an upward trend.

From November 2 to 7, BCH rose as high as 45.85%, and then fell back. BCH is now trading at $599.61, with a 24-hour increase of -5.04%.

Behind this round of rise is the second hard fork of BCH which will be carried out on November 15.

This BCH hard fork was initiated by CSW (Craig Steven Wright), an Australian who has long called himself "Satoshi Nakamoto".

BCH was also forked from Bitcoin on August 1, 2017. It overcame all obstacles along the way and achieved a counterattack, occupying a place among mainstream currencies in one fell swoop, becoming the most successful fork of Bitcoin.

According to the roadmap, BCH will undergo a hard fork every six months. BCH completed its first hard fork in May 2018. The development teams reached a consensus at the time of the fork, and no new forked coins were generated, increasing the block size from 8M to 32M.

This hard fork has caused the BCH community to face a split due to CSW's interference.

BCH Community Rift: Craig Wright vs. Jihan Wu

This is a major battle that has divided the BCH community. The two sides are Bitcoin SV (the community camp led by blockchain technology research and development company nChain CSW) and Bitcoin ABC (backed by Bitmain, which is owned by Jihan Wu).

How did the conflict occur?

Bitcoin ABC believes that, with the block size maintained at 32M, BCH should be developed in the direction of infrastructure public chain to open up more application scenarios to adapt to the ever-changing crypto market. Therefore, on August 8, 2018, Bitcoin ABC released a BCH upgrade announcement, stating that BCH will be upgraded to version 0.18 on November 15, with two updates:

1) Add Canonical Transaction Order (CTOR) to transactions within a block;

2) Add two opcodes (OP_CHECKDATASIG and OP_CHECKDATASIGVERIFY).

On the same day, CSW publicly criticized the updates announced by BCH developers as meaningless and emphasized that Bitcoin is not a toy for developers.

Then, on August 13, BCH mining pool Coingeek and CSW expressed strong opposition to the update, wanting BCH to return to its original intention, and announced that they would make an update different from Bitcoin ABC based on BCH 0.17 version:

1) The block capacity is increased from the current 32M to 128M;

2) Restore 4 opcodes that were designed by Satoshi Nakamoto in the early version but were disabled.

The BCH community had a heated discussion around the two different plans. In fact, there are three focal points of the debate between the two sides.

1. The dispute over BCH capacity expansion: Bitcoin SV believes that in order to improve transaction efficiency, the block capacity of BCH should be expanded. However, this move was opposed by Bitmain and Bitcoin ABC. They believe that the actual capacity of each BCH block is about 200k, and the current 32M block limit is already 160 times the actual capacity, so there is no need to expand the capacity.

2. The debate on the development path. Bitcoin SV advocates returning to the Bitcoin path and wants BCH to follow Satoshi Nakamoto’s original idea, while Bitcoin ABC wants to follow the development of the crypto market;

3. The struggle of interests behind the scenes. Through the hard fork, the operator of BCH will be determined by the miners and computing power of both parties. According to Babbitt, the struggle between the two parties is caused by the dispute over the interests of the mining pool.

In fact, as early as June 5 this year, CoinGeek, the largest BCH mining pool, and nChain jointly released the "Miner's Choice Plan", which put forward two suggestions for the BCH mining pool, thus opening the curtain on the interest disputes among mining pools.

1. Remove the minimum transfer amount limit of 546 Satoshi, allowing users to send transfers of 1 Satoshi (one millionth of a single Bitcoin Cash coin).

2. Accept some 0-fee transfers.

CSW represents the interests of mining pools CoinGeek, SVPool, and BMGpool, and together they own 37.2% of the computing power in the BCH network.

Bitcoin ABC represents the interests of mining pools BTC.com, AntPool, ViaBTC, BTC.TOP, and Bitcoin.com, and holds 35.2% of the computing power of the entire BCH network.

Image from Coin Dance

The two sides are equally strong and the battle in the mining pool is particularly fierce.

According to Deepchain Finance, recently, AntPool, a subsidiary of Bitmain, is expediting the deployment of 90,000 S9 mining machines in Xinjiang, and some mining machines have been deployed. This behavior of Bitmain is interpreted by miners as preparation for the BCH hard fork, after all, Bitmain is a major BCH user.

Bitcoin SV has also received support from Coingeek, the largest BCH mining pool.

In addition, according to Coindesk, six of the top ten BCH exchanges, including Coinbase, OKEx, Binance, Bitforex and Huobi, have announced their support for this hard fork and will suspend deposits and withdrawals of BCH shortly before the fork to ensure that customer funds are not at risk due to the instability of the network after the fork.

Will it bring "crisis" or "candy"?

There will be two possible outcomes for this hard fork:

1. The fork failed. BCH is still called BCH, no new currency will be generated, no candy, and no grandchild of Bitcoin.

2. The fork was successful. The block capacity of BCH was successfully upgraded, and BCH will also generate a new forked coin, BSV. For BCH holders, they will get the same amount of candy as BCH, that is, BSV forked coins. This buy one get one free, pie in the sky good thing is probably the reason why the BCH price is soaring this time. However, due to the distribution of computing power, both currencies will face some risks.

Amaury Sechet, the lead developer of Bitcoin ABC, said that when a cryptocurrency forks, it will cause great damage to the network effect of the blockchain and affect its ability to create future value. Forks can only happen a few times, and 99% of the forked coins will be worthless.

eToro market analysts believe that no matter what the driving factors of the market are, it will have a positive impact on the crypto industry.