Forking of A Fork, Bitcoin Cash To Split In Two
When two parties develop a disagreement, they part their ways. Similarly, in cryptocurrencies, when two groups emerge who have different opinions on the direction of the ecosystem should take, they split and one of them creates a whole new blockchain system, forking from the original.
This is essentially what is happening to Bitcoin Cash this month.
Bitcoin Cash is already a hard fork of Bitcoin itself. The BCH team wanted to introduce some changes in the structure of the largest cryptocurrency in the world, that would make it more efficient and better at performance. There was a disagreement and one group splintered away from the original, introducing its upgrades to its own forked chain.
History repeats itself. The BCH community is now again faced with the same issue. The community is not in agreement of the next step of upgrades. The upgrade is due on 15th of November and the argument this time is not on the upgrade, but the type of upgrade. The disagreement is down to two main communities, the Bitcoin Cash ABC and nChain.
ABCs of Fork
Bitcoin Cash ABC’s proposal for the upgrade is to introduce Canonical Transactional Ordering. According to ABC, this will be the stepping stone for massive future scaling of the chain. The upgrade, however, does not solve the issue of scaling immediately, but merely lays the foundation.
Another upgrade proposed is the introduction of smart contracts. Smart contracts are finding enormous uses and applications in other architectures, such as Ethereum. The ability of smart contracts in Bitcoin Cash will greatly benefit the currency as it will move from being just another cryptocurrency.
nChain, the other community, sees upgrades of ABC as slow and wants to immediately implement a block upgrade from 32MB to an astounding 128MB. This is their answer to the scaling issue. The team argues that the ABC’s proposal will not address the current issue and therefore, is not required at the moment.
Few of the world’s largest crypto exchanges are keeping an eye on the development. Coinbase has expressed that it will support both versions of Bitcoin Cash.
“Like previous BCH hard forks, there is a competing proposal that is not compatible with this published roadmap. Coinbase will monitor the hard fork process and work to minimize customer disruption until the network meets Coinbase security standards.”
Binance, although not specifying its preference, was also interested in the outcome, “Binance would like to confirm support for the upcoming Bitcoin Cash hard fork”
Ledger, the largest hard wallet manufacturer, however, said that it would be freezing BCH support in order to avoid any issues caused by the forking.
“Ledger will pause Bitcoin Cash service to avoid unwanted transactions until it is clear which of these chains will be the dominant one.”
An important thing to note is that there are big backings to both communities. ABC is backed by Bitmain, the largest Chinese dominating mining hardware manufacturer. Bitcoin Cash’s two third mining nodes are Bitmain based.
On the other hand, nChain has the support of CoinGeek, the largest Bitcoin Cash mining pool with approximately one fifth of the hashing power of BCH.
Surging Prices And Free Tokens
The impending fork of Bitcoin Cash has caused a frenzy of buying. This is because the way fork happens, the split causes a replication of the tokens. A person needs only to hold tokens in a wallet before the fork. When the fork is done, he or she simply needs to move out the assets and refresh his wallet on the other chain. The new tokens will be deposited and user will have free tokens.
What lies in the future of the two chain? Will one dominate the other, causing the weaker one to fizzle out? Or will the two chains continue on their own journeys, like BTC and BCH did. We can only wait and see.