Around 16:40 UTC, November 15, 2018, the Bitcoin Cash (BCH) network is set to undergo a hard fork upgrade. This fork is particularly important because recent developments and changes in direction have left the Bitcoin Cash community in a state of civil war. The proposed changes could potentially result in two entirely different chains, coins, and projects.
What is Bitcoin Cash?
Bitcoin Cash, the world’s fourth-largest coin by market cap, is a cryptocurrency that forked from the original Bitcoin blockchain in late 2017. A result of Bitcoin’s long-lasting scaling dispute, Bitcoin Cash increased its block size limit through a contentious hard fork upgrade, splitting off from Bitcoin to become its own independent cryptocurrency. Bitcoin Cash has garnered support from big names in the cryptocurrency space like bitcoin.com CEO Roger Ver and Bitmain co-founder Jihan Wu.
What’s The Problem?
The Bitcoin Cash dispute is between two competing sects, Bitcoin ABC and Bitcoin SV, who differ on the future of the network.
Bitcoin ABC is the “original” Bitcoin Cash client that provoked the fork away from the Bitcoin blockchain almost a year ago. With close ties to mining hardware titan Bitmain, Bitcoin ABC has a policy of hard forking about once every six months to upgrade the protocol. Roger Ver has come out as a supporter of the ABC chain.
For this hard fork, Bitcoin ABC will propose several changes.
“Canonical Transaction Ordering” (CTOR) is the primary modification. Transactions can presently be included in a block in essentially any arrangement, but under CTOR transactions must be included in a definitive order. The Bitcoin ABC team believes this development offers many advantages for scaling the network.
Additionally, a new piece of code, called OP_CHECKDATASIG (DSV), extends Bitcoin Cash’s features by enabling oracles, which allows for the development of smart contracts. Bitcoin ABC also introduced minor technical changes, like a minimum size for transactions.
On the other hand, nChain (the group behind Bitcoin SV) and its chief scientist Craig Wright, who claims to be Satoshi Nakamoto, want to remain as close as possible to the original Bitcoin Whitepaper. Having released a relatively new software implementation named “Bitcoin Satoshi’s Vision” (Bitcoin SV), Wright says he wants to restore Bitcoin to its original protocol. nChain proposes increasing the block size limit to 128 megabytes and even removing the block size limit entirely down the road. After that, the nChain community would take a rather conservative approach with few, if any, further protocol upgrades. In essence, nChain takes a conservative approach, refusing to add on the new upgrades that would allow for expanded capabilities and even overturning old upgrades.
What It All Means
Bitcoin Cash will experience a coin-split as soon as either Bitcoin ABC or Bitcoin SV mine a block that’s invalid on the opposing chain. This means that all BCH holders get coins on both sides of the split. In principle, all users should be able to mine, send and receive both coins.
This will most likely not be a clean split. While Bitcoin ABC implemented replay protection, Bitcoin SV copied this “protection” to nullify it. Thus, transactions will look identical on both chains. This means that a Bitcoin ABC transaction can be re-transmitted (“replayed”) on the Bitcoin SV chain, having users accidentally spend both. Forking without relay protection caused exchanges like Coinbase to lose significant amounts of cryptocurrency during the Ethereum-Ethereum Classic split.
Furthermore, the fork could unleash what has come to be known as a “hash war.” Craig Wright and members of the SV camp have stated that they will use any hash power under their control to 51% attack the Bitcoin ABC chain. For instance, an attack could consist of mining only empty blocks on Bitcoin ABC and rejecting any blocks mined by “honest” Bitcoin ABC miners. Thus, no transactions would confirm on the Bitcoin ABC chain, and “honest” miners will be strongly discouraged from mining on it because their hash power would go to waste.
This controversial hard fork will result in two very different projects, further dividing the Bitcoin community into smaller, more polarized tribes.