Bitcoin Cash (BCH) Blockchain Hash War Takeaways: Who is Fighting and Where is the Consensus?
The Bitcoin ecosystem is currently a battlefield, with most activity revolving around Bitcoin Cash and Bitcoin SV. As most investors are undoubtedly aware of, Bitcoin Cash has recently had an upgrade, which was scheduled for November 15. However, due to disagreements within its community, two opposing groups emerged, which caused the blockchain to split into two.
This also resulted in the appearance of a new coin — Bitcoin Satoshi Vision (BSV) — which is trying to establish dominance over BCH. To a lot of newcomers, this probably sounds extremely confusing, which is why we will now go over the entire story and try to make sense of the current situation.
BCH/BSV Hash War Explained
About Bitcoin Cash
To explain all of this, let's start by saying a thing or two about Bitcoin Cash (BCH). This is currently the fourth largest coin by market cap, with a current price of $361 per coin. It came to be as a fork of Bitcoin's own blockchain on August 1st, 2017.
A part of the Bitcoin community led by Roger Ver decided to increase Bitcoin's block size. Their goal was to help Bitcoin grow and thrive as a crypto used for transactions, instead of being used as an investment asset. Since the rest of the community resisted the idea, the hard fork was performed, and BCH came to be. Since then, the two coins went their separate ways.
In order to bring necessary protocol upgrades, Bitcoin Cash needs to perform hard forks twice per year. The latest one was only days ago, on November 15. However, for months prior to the event, BCH community entered a similar disagreement to the one that led to BCH's own creation.
Once again, the community split into two large fractions, one supporting Bitcoin ABC, and the other supporting nChain. To explain them briefly, Bitcoin ABC (Adjustable Blocksize Cap) is a conservative group that wants to preserve BCH the way it is. This group is led by Roger Ver, as its most vocal representatives, but also by others such as Bitmain, Binance, Coinbase, and others. According to them, Bitcoin Cash is already good enough, and it doesn't require new large changes.
On the other side, there is nChain, which is led by blockchain developer Craig Wright. This side wants to restore BCH to the original Satoshi protocol, believing that the coin cannot properly advance the way it is now. They created a new coin called Bitcoin SV (Satoshi's Vision) back in August of this year, and they finally launched it with the November fork.
Furthermore, Wright continued his aggressive campaign against BCH by starting the hash wars, and he even started claiming that he is Satoshi Nakamoto himself — the man that created Bitcoin 10 years ago.
Bitcoin SV, led by Wright, also got support from numerous news outlets such as Bitcoin.org, CoinGeek, CalvinAyre, and others. Their aim is to increase the size of blocks to 128MB, which is the maximum size, deemed unnecessary by the ABC.
We should also mention that there is also a neutral party called Bitcoin Unlimited, that suggested a way to change Bitcoin ABC and Bitcoin SV and empower miners by giving them the ability to vote during the hard fork.
The Start Of The Hash Wars
As scheduled, the hard fork was performed on November 15th, and the first ABC block was created by Bitcoin.com mining pool at 1:00 pm EST, with the block height 556767. The twist came 22 minutes later when SV miners created their own block 556767 on the other chain. BCH officially split into two active blockchains — BCH ABC and BCH SV.
This is where the war started, as BCH ABC needed to establish dominance, so one of its allies, Bitmain's co-founder Jihan Wu, mobilized his mining force. While unwilling to do so due to the fact that it will damage Bitcoin by relocating hash power to BCH mining, he still went through with it in order to oppose what Wright was doing. Roger Ver did the same, and Wright responded with a claim that continuous mining will eventually determine the winner.
As a result, BCH total hashrate nearly doubled within the last week, and the traditional BCH is currently leading with the majority of hash power on its side. However, as a considerable amount of mining power did leave Bitcoin in favor of BCH, Bitcoin's price dropped by over $1,000, and the rest of the market followed.
Most exchanges halted BCH trading and withdrawals during the fork, and the hash war started immediately after the event. Right now, BCH still leads being two blocks ahead of BSV. In addition, BCH ABC managed to accumulate more PoW, despite the fact that they have nearly identical hash power right now.
One day after the fork was performed, Binance took action and started trading both coins. Following that, other exchanges started doing the same, with BCH ABC being officially titled BCH on most of them. In a way, this means that most of these exchanges already decided that ABC will be the winner in this conflicts.
At the same time, BCH SV is traded under the name BCHSV. While many believe that one coin will gain the title of BCH, Binance's CEO, Changpeng Zhao, stated that both BCHABC and BCHSV will stay.
The war is still on-going at the time of writing, and its end is not yet in sight. At the same time, the market is struggling to regain stability, BTC dropped to around $5,400 and is trying to rise once more, and Ethereum has been bested by XRP which overtook its place as the second largest coin days ago.
The market is still in state of chaos, and many are wondering whether all of it was done only so that Bitcoin's price can be easily manipulated. Speculations like this emerged from all corners of the internet, and the community is holding its breath while awaiting the end of the battle.