One of the famous cryptocurrencies in the world is Bitcoin. Most people however don’t know that there are different versions of Bitcoins. Bitcoin Cash (BCH) is one of these versions, and it itself split into two additional separate cryptocurrencies in November 2018. This is referred to as a “hardfork.”
There is still a Battle for Bitcoin Cash underway, and we will attempt to explain it in simple terms. Have you ever wondered what happens when two groups of people disagree on what a cryptocurrency should be? Well, read on!
What is Bitcoin Cash?
Firstly, let’s see what Bitcoin Cash (BCH) is before diving into the conflict. On August 1, 2017, Bitcoin Cash was formed as a “fork” of Bitcoin. A fork occurs when a group of developers and miners decide to change the way how the cryptocurrency works. The objective of creating Bitcoin Cash was mainly to speed up and make cheaper transactions as compared to Bitcoin.
The main change was a hike in the “block size limit,” which allowed more transactions to be processed in one batch. Bitcoin Cash supporters argued this made BCH more useful in everyday life as opposed to Bitcoin.
The Hardfork: Bitcoin Cash ABC vs. Bitcoin Cash SV
As fast forward to November 15, 2018, Bitcoin Cash also went through another split. The community was split this time into two sides: Bitcoin Cash ABC and Bitcoin Cash SV.
Bitcoin Cash ABC
Original Bitcoin Cash was Bitcoin Cash ABC (Adjustable Blocksize Cap). It was backed by Roger Ver, a larger than life character in the world of cryptocurrency, and Jihan Wu, co founder of Bitmain, one of the largest bitcoin mining companies out there.
Canonical Transaction Ordering (CTOR) was introduced by Bitcoin Cash ABC as a new system. The goal of this system was to make the transaction process easier and future upgrades as well. It added support for oracles, and offered an additional external data source for the blockchain.
Bitcoin Cash SV
On the other side was Bitcoin Cash SV, or “Bitcoin Satoshi’s Vision,” argumenting that the current cryptocurrency is wrong. The second blockchain icon that we should talk about is created by Craig Wright, a controversial character who claims to be Satoshi Nakamoto, the anonymous creator of Bitcoin. His claims have however not been proven.
Bitcoin Cash SV also aimed to restore the rules of Bitcoin as it was in 2009. The biggest difference to this is its proposal to increase the block size to 128 MB as against Bitcoin Cash ABC which is an adjustable size. Some of the new features introduced by Bitcoin Cash ABC also were rejected by Bitcoin Cash SV, who argued that these were just unnecessary changes to the original Bitcoin vision.
The Hash War: Battle for Survival
If the two parties couldn’t reach consensus, the Bitcoin Cash blockchain was divided into two different cryptocurrencies: Bitcoin Cash ABC and Bitcoin Cash SV. Along with this, we ended up having a “hash war.”
What is a Hash War?
Like Bitcoin and Bitcoin Cash, cryptocurrencies rely on “miners” to process transactions and keep the network secure. These miners solve complex problems by utilizing ‘hash power’ being equivalent in converting computing power to solve complex problems. The greater the number of hash power a network has, the more dominant and secure the network becomes.
Following Bitcoin Cash’s split, both sides tried to secure the network by getting more miners on their side. The group with the most hash power could claim Bitcoin Cash. This was named the “hash war,” the battle for hash power.
Who Supported Which Side?
Most cryptocurrency exchanges supported Bitcoin Cash ABC, which made it the official Bitcoin Cash (BCH) version.
Bitcoin Cash SV was backed by billionaire Calvin Ayre and a few mining pools which provided the project with a lot of hash power.
The Impact of the Hardfork
1. Replay Attacks
The main danger of this fracture was a replay attack. Generally, each chain has different rules when a hardfork happens. However, Bitcoin Cash SV copied the replay protection system that Bitcoin Cash ABC implemented, and thus it was cancelled out. This meant that the transactions on one chain could be copied onto the other which could lead to security threats.
2. Market Reaction
At the time of the split, the market had its own price both for Bitcoin Cash ABC and Bitcoin Cash SV. Bitcoin Cash ABC received the support of most investors and traders, and it was listed on major cryptocurrency exchanges under the BCH symbol.
Bitcoin Cash SV too could not sail smoothly at the beginning but struggled on for the top spot. The price of Bitcoin Cash SV surged 50% in 24 hours at one point, showing that it still had the support of a great deal of fans.
3. The Effect on Bitcoin
This battle also played a big role in Bitcoin itself. The overall hash power of Bitcoin dropped as some Bitcoin miners switched to mining Bitcoin Cash ABC. This uncertainty in the market meant a drop in Bitcoin’s price.
Who Won the Hash War?
Initially, Bitcoin Cash ABC was winning as most exchanges deemed it the true Bitcoin Cash (BCH). However, Bitcoin Cash SV was not gone. As of November 23, Bitcoin Cash SV accounted for 53% of the total Bitcoin Cash network hash power. It proved that the fight was not finished entirely.
Despite going against the cryptocurrency industry, Craig Wright and his team continued to promote Bitcoin Cash SV as the superior variant of Bitcoin currency.
What Does This Mean for the Future?
While Bitcoin Cash ABC initially won the fight, Bitcoin Cash SV still exists as its own cryptocurrency. The result of the split was that the cryptocurrency community can disagree and bring about big changes, in the case of investors and developers.
Lessons from the Bitcoin Cash Hardfork
- Cryptocurrencies Can Change: Cryptocurrencies split into new versions when people disagree how money ought to work.
- Mining Power Matters: As a result, the group with more hash power has a better chance of taking control of the network, but they do not always do it.
- Market Support is Key: With a lot of mining power, this cryptocurrency therefore is not sufficient for the remaining crypto exchanges and traders.
Conclusion
The Bitcoin Cash ABC vs. Bitcoin Cash SV war was amongst the most famous conflicts in cryptocurrency history. It illustrated how much people can be passionate about their digital money vision. Bitcoin Cash ABC grew further to become the dominant version, but the existence of Bitcoin Cash SV proves that in the Crypto world, nothing is ever really permanent.
As of now, Bitcoin Cash ABC is simply called Bitcoin Cash (BCH), though this could still change. As a result, we can conclude that when it comes to this story, the cryptocurrency world is full of surprises!
