Bitcoin Cash Hard Fork: Watchful Waiting For Investors, Exchanges On Which Path Will Rule

Blockchain, FinTech, Investing, News | November 15, 2018 By:

The Bitcoin Cash hard fork has occurred, splitting the existing blockchain into two new cryptocurrencies:  BAB (running on bitcoin-ABC software) and BSV (running a protocol called bitcoin SV developed by nChain). There is also a third proposal to combine the best aspects of the two competitors into Bitcoin Unlimited.

At stake: which will emerge as the “real” Bitcoin Cash. So far, a majority of miners have indicated they will support Bitcoin SV, with ABC and Unlimited trailing.

Bitcoin ABC  is the “original” Bitcoin Cash client that split away from the bitcoin blockchain in August 2017.  It has been tied unofficially to mining company Bitmain, but is led by Amaury Séchet. The new fork will introduce several changes, “Canonical Transaction Ordering” (CTOR), which will aid in scaling.  Another addition is a piece of script called OP_CHECKDATASIG (DSV), which enables oracles, a type of smart contract.

Opposing this is nChain and Craig Steven Wright, which claims its version will restore bitcoin to its original protocol. Wright has claimed in the past to be Satoshi Nakamoto, the mysterious creator of bitcoin, although the evidence is questionable.

Bitcoin SV rejects CTOR and increases the default block size limit to 128 megabytes versus Bitcoin ABC’s 32 megabytes.  It also removes the size limit on scripts.

Exchanges have largely halted trading until it all shakes out. After that, they will determine which of the new coins will be supported. So far, some will support both coins, while others will back only one, making it the de facto “real” Bitcoin Cash.

Yesterday’s market meltdown left Bitcoin Cash at about $431 this morning, down about $100 in value since the crash, which affected the entire market.

Some industry reactions:

“A single event, like a fork, can be a significant factor across wider crypto markets thanks to their relative immaturity. Large holders will often make trades across multiple coins, causing ripple effects beyond the asset that instigated the movement.”
Andy Bromberg, co-founder and president of CoinList, a platform for listing digital tokens

“The market continues to be unpredictable, the way it has always been. Bitcoin has been declared dead 316 times (https://99bitcoins.com/bitcoinobituaries/). This feels like the continuation of a natural cycle, and it’s important to note that even in this turbulence, the blockchain industry is flourishing. We’ve never had as much talent and interest in the space, and the tech has been evolving in leaps and bounds. I try not to concern myself with short-term market volatility, because this space is going to revolutionize nearly every facet of the economy. To quote the American classic Field of Dreams, “If you build it, they will come.”
Jimmy Zhong, co-founder of IOST, enterprise-grade blockchain infrastructure

“The best path forward for blockchain is to stop focusing on market swings, and focus on building great technology. We’re bullish on both Bitcoin and Ethereum and think the market will recover before the end of the year, but we’re most encouraged by the caliber of talent that is continuing to flood into this industry. Origin has always been focused on building; the rapidly increasing level of development driven by top talent that we’re seeing across this space is what will continue to move the sector forward.”
Josh Fraser, co-founder of Origin Protocol, a platform for decentralized sharing economy marketplaces

“Volatility ultimately boils down to the basic economic forces of supply, demand, and uncertainty. Uncertainty is what’s driving volume and volatility this time around, just as it did earlier this year with the Aug ’17 BTC fork and the Dec ’17 launch of BTC futures. This rampant volatility validates that there’s still a lot of money behind crypto, and that trading infrastructures have improved to handle more flow; we probably won’t see that volume slowing down until the BCH hashwar settles.”
Danny Kim, Head of Growth at SFOX, the premier prime dealer for institutional cryptocurrency trades