Bitcoin Cash Has Split Into Two New Blockchains, Again. Ultimate Resource On Bitcoin Cash #GotBitcoin
Roger Ver, One Of The Biggest Advocates Of Bitcoin Cash, Said Paypal Would Not Have Supported Bitcoin Cash If The Payment Giant Knew About The Network’s “Contentious” Hard Forks.
The Bitcoin Cash network, a result of a hard fork from Bitcoin, has split into two new blockchains, again. At press time, Bitcoin Cash ABC (BCH ABC) has received no hashpower, meaning that it is possible Bitcoin Cash Node (BCHN) will become the dominant software of the Bitcoin Cash network, according to data from Coin.Dance.
The last “common block” among bitcoin cash miners was #661647, mined by Binance. The first block that split the Bitcoin Cash blockchain was mined by AntPool. Since then, hashpower has been in BCHN’s favor, as miners have mined multiple consecutive blocks on the network.
Before the fork, 80% of miners were signaling support for BCHN.
To recap, a group of Bitcoin Cash developers led by Amaury Sechet, known as BCH ABC, proposed an update on the Bitcoin Cash network, which has included a controversial new “Coinbase Rule,” which requires 8% of mined bitcoin cash to be redistributed to BCH ABC as a means of financing protocol development.
The upgrade is opposed by another group from the Bitcoin Cash community, known as Bitcoin Cash Node, who removed this so-called “miner tax” from their source code. When some nodes on a network adopt a hard fork and others don’t, then the blockchain will split into two different versions: one with the old software and one with the new software.
Prior to the hard fork, prices of bitcoin cash plummeted to as low as $237.54, down by 7.5% from an earlier high at $256.82, according to data from CoinDesk 20.
If BCH ABC does not attract enough hashpower to produce a viable blockchain, the ABC blockchain would in theory “disappear.”
Most major crypto exchanges have announced that they are likely to support BCHN and it will inherit the “BCH” ticker.
Roger Ver: Bitcoin Cash Hard Forks Could Have Thwarted PayPal Support
There are still a lot of uncertainties around the scheduled Bitcoin Cash fork event on Nov. 15, but one thing is for sure: The cryptocurrency’s biggest advocate, Roger Ver, executive chairman of Bitcoin.com, is not a fan of the scheduled upgrades on the network, which take place every six months.
“If PayPal knew that this sort of contentious hard fork was likely to happen, maybe they wouldn’t have added bitcoin cash at all to their roadmap,” Ver told CoinDesk in an interview, referring to PayPal’s recent announcement to add cryptocurrencies – bitcoin cash included – to its system. “So it is really a big problem to have these contentious hard forks. I’d like to see that come to an end.”
As of press time, PayPal hasn’t responded to CoinDesk’s request for comment on the upcoming fork event. Paxos, the company that provides crypto service for PayPal, rejected CoinDesk’s request to comment on the topic.
A Bitcoin Fork Known For Forks
Unlike a “soft fork” that allows non-upgraded and upgraded nodes to still transact with each other, a hard fork is a software upgrade that implements a new rule to the blockchain that is not compatible with the older software. Thus, developers tend to be extremely conservative about introducing hard forks and usually try to ensure there will be community consensus around these sorts of changes to the code. However, some hard forks have been contentious.
In these instances, if some nodes on a network adopt a hard fork and others don’t, then the blockchain will split into two different versions: one with the old software and one with the new software.
Bitcoin Cash itself is a result of a hard fork from Bitcoin, after a group from the Bitcoin community, advocating the literal interpretation of Satoshi Nakamoto’s Bitcoin white paper, insisted on increasing block sizes. They pushed for a hard fork of the original Bitcoin blockchain, as they view low-cost, peer-to-peer transactions as the blockchain’s core value.
Today, as the most well-known fork of Bitcoin, the Bitcoin Cash network undergoes an upgrade every six months, and a chain split can occur when the community is unable to meet consensus requirements. An example is when Bitcoin Satoshi Vision (BSV) forked away from Bitcoin Cash on Nov. 15, 2018.
The Bitcoin Cash hard fork expected this coming Nov. 15 is the result of a blockchain update proposal from a group known as Bitcoin Cash ABC (BCH ABC), led by developer Amaury Sechet. The update has included a controversial new “Coinbase Rule,” which requires 8% of mined bitcoin cash to be redistributed to Bitcoin ABC as a means of financing protocol development.
Developers With ‘Too Much Money’
This funding approach has triggered a debate within the BCH community regarding the governance and the development of the software that runs the Bitcoin Cash blockchain.
The group led by developers from BCH ABC holds there should be an organized and consistent effort in order for bitcoin cash to become a universal digital payment. Therefore, developers should be funded by the Bitcoin Cash network, according to Chris Troutner, a developer who formerly worked at Ver’s bitcoin.com and is close to Sechet’s BCH ABC group.
However, an opposing group against this funding mechanism, Ver included, said that because the software is an open-source protocol, developers should help improve the protocol on a voluntary basis and look for financial resources elsewhere.
Ver went a step further by saying the Bitcoin Cash network’s problem is developers have “too much money.”
“I think the way [Bitcoin] went off the rails from Bitcoin Cash is developers had too much money and then they started developing and tinkering with too many different things, which caused a problem in the network.”
Troutner, who told CoinDesk that he will support both chains after the fork, said the real issue behind the dispute is a collective hatred toward Sechet. Sechet’s BCH ABC has been leading the scheduled Bitcoin Cash updates for the past few years, Troutner said. And Sechet’s team has always wanted to implement this funding mechanism.
“[BCH ABC’s opponents] want Amaury Sechet to leave the ecosystem,” he said.
Ver said he didn’t think the fork will take place as planned, saying only about 0.2% of the blocks mined on Bitcoin Cash have signaled support for Bitcoin ABC.
As of press time, of the last 1,000 blocks mined on Bitcoin Cash, about 80% have signaled support for the Bitcoin Cash Node (BCHN) and only 0.3% for Bitcoin ABC, according to data from Coin Dance.
What the data may indicate is that a fork will take place because the software upgrade by BCH ABC is not supported by the majority of the miners, as more blocks are signaling support to BCHN. That will force BCH ABC to fork away from the old chain, said Aidan Mott, analyst at Messari.
On the other hand, Troutner posits that the data may have hindered the actual support of BCH ABC.
“If you think about it in terms of a game theory, some miners are probably legitimately signaling for BCH but other miners who are planning to mine on ABC probably are also signaling for BCHN because they want their competitors to mine on that chain,” Troutner explained. “That makes it easier for them to mine blocks on the ABC chain.”
Exchanges And ‘Fork Fatigue’
Ver’s early argument is service providers like PayPal can be frustrated by a cryptocurrency blockchain that’s constantly going through forking events. This sort of frustration is already happening at crypto exchanges.
Even though it is unclear which chain will become the dominant chain after the fork, a few major crypto exchanges have already announced their support for BCHN, which will inherit the Bitcoin Cash name, assuming the BCH ABC would get the minority of nodes.
In a Nov. 6 post by Kraken, the exchange said it will support BCHN, “regardless of the outcome of the fork.”
“Bitcoin Cash Node tokens will be called ‘Bitcoin Cash’ on our platform and represented by the ticker symbol ‘BCH,’” Kraken said in the post. “We will support Bitcoin Cash ABC ONLY IF the hash power on the ABC network is at least 10% of the hash power on the Bitcoin Cash Node network.”
“Exchanges have to put themselves in a position where they can know what their customers want, which means they understand the kind of the consensus of the miners but also they understand the positions of the development teams,” said Mott. “In this sense, it would be a pretty easy decision to just keep their support and only run Bitcoin Cash Node network software.”
Since prices of the two newly split cryptocurrencies will be decided by market supply and demand, exchanges play a significant role because they are the ones that allocate the new tokens to their customers.
Another important implication from Kraken’s post is that exchanges also get to decide which new chain will take the Bitcoin Cash name.
Ver claimed the reason Bitcoin Cash is less popular than Bitcoin is because the latter took the “Bitcoin” name after the hard fork. Ever since then, marketing has been one of the biggest obstacles for the mass adoption of Bitcoin Cash, according to Ver.
The market capitalization of bitcoin cash is approximately $4.88 billion at the time of writing, yet bitcoin has a market capitalization of $283.28 billion, according to data on CoinDesk 20.
“When the split happened, the Bitcoin Cash version had all the characteristics that made Bitcoin popular to begin with, but the other version that didn’t have those characteristics got the Bitcoin name and the infrastructure to go with it,” Ver said. “Bitcoin Cash has been rebuilding all of that infrastructure and its brand recognition basically from scratch.”
If that’s the case, BCHN will find itself ahead of BCH ABC, as evidenced by exchanges’ support, if it takes the name of Bitcoin Cash.
Updated: 5-16-2020
Bitcoin Startup Purse.io And Major Bitcoin Cash Partner To Shut Down After 6-Year Run
Bitcoin startup Purse will shut down after six years in the space, according to an email sent to customers Thursday and confirmed by CoinDesk. Bitcoin Startup Purse.io And Major Bitcoin Cash Partner To Shut Down After 6-Year Run
“We’ve made the very difficult decision to dissolve the company,” the email states. “We’re grateful for the opportunity afforded by our supporters to build products and infrastructure for the cryptocurrency community.”
Purse offered discounts of up to 5 percent at Amazon by connecting Amazon gift card holders and cryptocurrency investors. Users could buy gift cards at discounted rates using bitcoin or bitcoin cash, according to Purse’s website.
“It was a business decision, nothing funky going on,” Purse support manager Eduardo Gómez said in a Twitter DM. Purse will disclose more information in a forthcoming blog post, he added.
Purse will continue to facilitate services until June 26 but signups will cease Thursday. Additionally, the startup’s “Shop and Earn” functionality will be disabled next week on April 23 and open orders that have not been matched will be canceled, the email states.
As CoinDesk previously reported, Purse was once an active developer in the Bitcoin community. The firm proposed a third scaling solution called “extension blocks” during the 2017 debates that spawned Bitcoin Cash. The extension blocks specification was never adopted, however.
Gómez said the decision to wind down the company was not related to the recent move by Amazon to slash commissions on its affiliate program.
Updated: 4-24-2020
Bitcoin Payments Gateway Purse is Reconsidering Closure, Cites Community Support
Having just recently announced plans to close shop, Bitcoin payments facilitator Purse.io says it is now reconsidering due to “an incredible outpouring of support from the community.”
Having just recently announced plans to close shop, Bitcoin (BTC) payments facilitator Purse.io says it is now reconsidering due to “an incredible outpouring of support from the community.”
The veteran business — which offered Amazon shoppers a handy workaround and discount for paying with Bitcoin — had initially said it would be deactivating its “shop and earn” feature today, April 23, and ultimately cease all operations by late June.
In its recent update, Purse says that since announcing its intentions to shut down, the overwhelming response from the community has caused the team “to reconsider our decision”:
“Several parties — including well known Bitcoin advocates, high volume users, and established cryptocurrency companies — reached out with interest in acquiring purse.io.”
In light of this response, Purse has decided to keep “shop and earn” functional and asks the public to stay tuned for further developments. Meanwhile, it revealed, the team at Purse are now vetting new ownership for the platform.
On social media, multiple users said that the company’s role in facilitating peer-to-peer (P2P) Bitcoin transactions was key to their positive experience with crypto.
Purse had offered a community-led service that paired users and enabled them to directly trade their Amazon gift cards for others’ cryptocurrency, using discounts to incentivize participants.
Recently, Cointelegraph reported on Visa’s support for Fold, a Lightning Network-compatible mobile app, which, while not P2P, does offer users Bitcoin rewards while shopping at major retailers such as Amazon.
Updated: 8-10-2020
Number of Bitcoin Cash Whales Drops Following 39% Price Surge
The number of Bitcoin Cash investors holding at least $3M dropped by 10 since Aug. 1 following the price surge to more than $311.
Following a 39% price surge at the end of July, at least 10 Bitcoin Cash whales have left the network, possibly trading or selling their millions in holdings.
According to Crypto Twitter user Ali Martinez, data from analytics site Santiment shows the number of investors holding between 10,000-100,000 Bitcoin Cash (BCH) — roughly $3-30 million — has fallen by 10 since Aug. 1.
The drop comes after the token surged 38.7% from $224.46 on July 17 to a three-month high of $311.34 on July 31, implying that a number of whales could have sold their holdings.
Data from @santimentfeed shows that the selling pressure behind #BitcoinCash is surging dramatically. The firm recorded a major drop in the number of addresses holding 10,000 to 100,000 $BCH.
Since Aug 1, roughly 10 whales have left the network, representing a 5.6% decline. pic.twitter.com/uriR5j8K8q
BCH continues to be the fifth largest crypto asset by market capitalization at $5.6 billion, with Chainlink (LINK) trailing at $4.6 billion. At the time of writing, Bitcoin Cash is trading at $307.84, having risen 3% in the last 24 hours.
Adjustments To BCH Difficulty Algorithm
Bitcoin Cash uses the SHA256D algorithm — the same as that used by Bitcoin. However, its hashing power is less than 5% of that of Bitcoin, which has sometimes left it vulnerable to a 51% attack.
In response, the BCH community has floated changing the algorithm as part of the network’s November upgrade. Cointelegraph reported on Aug. 7 that developers have worked out a compromise between two proposed solutions. The network will implement the ‘Aserti3-2d’ difficulty adjustment proposed by lead BCHN maintainer Jonathan Toomin, and an infrastructure funding plan.
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