For the core developers, it was an attempt to retain some level of decentralization in a centralized mining environment, with the Bitcoin mining cartel looking to improve capacity to improve transaction times and therefore income.
Having only been created back in August 2017, a hard fork earlier in the year was relatively seamless, the May hard fork resulting in a pre-fork rally on hopes of a fresh cryptocurrency reward for Bitcoin Cash coins held at the time of the fork driving demand for Bitcoin Cash. The last fork, back in May of this year saw Bitcoin Cash rally from an early April low $600.1 to the first week of May $1,849.9.
The upcoming fork is scheduled for 15th November and, in stark contrast to the fork earlier in the year, Bitcoin Cash has been in rapid retreat in the last week, with Bitcoin Cash sliding to a November low $518.2% on Sunday, the reversal from the previous Sunday’s 18.8% rally to $571.6 seeing Bitcoin Cash down 9.34% over the period.
Hopes of a Bitcoin Cash hard fork rally have been dashed this time around and Bitcoin Cash continues to sit in the hands of the bears, with the upcoming hard fork looking to be far from seamless, there being quite a division of consensus ahead of the main event.
Hard forks are all about consensus and, while there was the necessary consensus in May to support the upgrade, this time around there is no consensus
What is the Bitcoin Cash Hard Fork Looking to Achieve?
Hard forks are not a rare occurrence for Bitcoin Cash, with the team looking to continue making improvements to the platform to make it a more viable option as an alternative to fiat currency than Bitcoin.
For the coming hard fork, the two sides of the fence are:
- Bitcoin ABC, which is looking to make a number of upgrades, including the introduction of the use of Oracles and cross-chain atomic swaps to deliver a smart contact offering. Forward-looking, the team has also proposed some block adjustments to address scalability down the road, using a technique called canonical transaction ordering.
- Craig Wright is backing Bitcoin SV and is proposing to increase the block size to 128MB from Bitcoin Cash’s current 32MB, with no other changes. Back in May, the block size was increased from 8MB to 32MB.
The Bitcoin ABC team are against the increase in block size and that’s where the disagreement has occurred, with Bitcoin ABC and Bitman, one of Bitcoin Cash’s largest miners sitting on one side of the fence.
Craig Wright is against the idea of Bitcoin Cash’s blockchain being used for non-cash transactions and canonical transactions, with nChain and the support it receives from one of Bitcoin Cash’s other largest miners CoinGeek, also being against canonical transactions, whilst supporting the proposed blockchain increase to 128MB.
Bitcoin SV, with its support from Bitcoin Cash miner CoinGeek, will be looking to take on new miners in support of Bitcoin SV, with CoinGeek and nChain reportedly having a higher hash power than Bitcoin ABC & Bitman, which is contributing to the downward trend seen in Bitcoin Cash ahead of the fork.
What to Do in the Days after the Hard Fork:
- Avoid holding Bitcoin Cash coins on an exchange and keep them in a wallet with private keys, a hard wallet preferred.
- Avoid making any transactions in the days after the Bitcoin Cash hard fork and wait until there is some clarity on what’s going on.
- Wait for advice on how to access Bitcoin SV coins and which exchanges are supporting Bitcoin SV.
While upgrades and enhancements are traditionally a good thing for any product, particularly one so new as Bitcoin Cash, the real issue lies in the breakup of Bitcoin Cash and the creation of yet another possible alternative to Bitcoin as a viable competitor to fiat currency.
The downward trend in Bitcoin Cash ahead of the hard fork reflects, not only a lack of support for Bitcoin SV, with those looking to receive Bitcoin SV needing to hold onto Bitcoin Cash at the time of the fork, but also some anxiety over the future of Bitcoin Cash ahead of the fork.
Some disruption and fallout are to be expected as a result of the ongoing disagreement between the 2-sides and one thing that has become apparent from is the lack of decentralization, an issue that other blockchains have attempted to address through hybrid consensus algorithms that limit the powers of miners in support blockchain development and adoption.
As the war of words between Craig Wright, who claims to be Satoshi Nakamoto, and Bitcoin ABC continues, more pain is likely ahead of Thursday’s fork and the worst possible outcome for existing Bitcoin Cash holders would be for Bitcoin SV to become the dominant coin come the weekend, Bitcoin SV miners currently threatening to mine empty blocks on Bitcoin Cash that would ultimately render Bitcoin Cash useless.
Investors and speculators will be looking at the direction of Bitcoin SV, an IOU, on supported exchanges and the direction of Bitcoin Cash, with where the hash power sits at the day of the fork key to which side comes out on top.