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There are still a lot of uncertainties about the planned event of the Bitcoin Cash fork on November 15, but one thing is certain: the biggest supporter of the cryptocurrency, Roger Ver, executive president of Bitcoin.com, is not a fan of the scheduled updates on the network, which takes place every six months.
“If PayPal knew that this type of controversial hard fork is likely to occur, they might not have added bitcoin cash to their roadmap,” Ver told CoinDesk in an interview, referring to PayPal’s recent announcement to add cryptocurrencies – bitcoin cash. included – to his system. “So it’s really a big deal to have these controversial hard forks. I’d like it to end. “
At press time, PayPal has not responded to CoinDesk’s request for comment on the upcoming fork event. Paxos, the company providing the cryptographic service for PayPal, declined CoinDesk’s request to comment on the topic.
A Bitcoin fork known for forks
Unlike a “soft fork” that allows stale and updated nodes to still transact with each other, a hard fork is a software update that implements a new rule for the blockchain that is not compatible with the older software. Therefore, developers tend to be extremely conservative about introducing hard forks and usually try to ensure that there is community consensus on these kinds of code changes. However, some hard forks have been controversial. In these cases, if some nodes on a network adopt a hard fork and others don’t, the blockchain will split into two different versions: one with the old software and one with the new software.
Bitcoin Cash itself is the result of a hard fork of Bitcoin, after a group from the Bitcoin community, supporting 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 core value of the blockchain.
Learn more: OKEx, Still Paralyzed by Founder’s Arrest, Details Plans for Bitcoin Cash Hard Fork
Today, as the best-known fork of Bitcoin, the Bitcoin Cash network undergoes an update every six months, and a chain split can occur when the community is unable to meet consensus requirements. One example is when Bitcoin Satoshi Vision (BSV) split from Bitcoin Cash on November 15, 2018.
The Bitcoin Cash hard fork scheduled for November 15 is the result of a blockchain upgrade proposal by a group known as Bitcoin Cash ABC (BCH ABC), led by developer Amaury Sechet. The update included a controversial new “Coinbase Rule”, which requires the redistribution of 8% of the bitcoin money mined to Bitcoin ABC as a means of funding the development of the protocol.
Developers with “too much money”
This funding approach has sparked a debate within the BCH community regarding the governance and development of the software that runs the Bitcoin Cash blockchain.
The developer-led group at BCH ABC argues that there should be an organized and consistent effort for bitcoin money to become a universal digital payment. Therefore, developers should be funded by the Bitcoin Cash network, according to Chris Troutner, a developer who previously worked at Ver’s bitcoin.com and is close to Sechet’s BCH ABC group.
However, a group opposed to this funding mechanism, including Ver, said that because the software is an open source protocol, developers should help improve the protocol on a voluntary basis and seek financial resources elsewhere.
Ver went a step further by stating that the problem with the Bitcoin Cash network is that developers have “too much money”.
“I think so [Bitcoin] went off the rails from Bitcoin Cash because the 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 he will support both chains after the fork, said the real problem behind the dispute is collective hatred of Sechet. Sechet’s BCH ABC has been leading Bitcoin Cash’s scheduled updates for the past few years, Troutner said. And the Sechet team has always wanted to implement this funding mechanism.
“[BCH ABC’s opponents] he wants Amaury Sechet to leave the ecosystem, “he said.
Read more: Ethereum’s ‘unannounced hard fork’ was trying to prevent the real discomfort it had caused
Ver said he doesn’t think the fork will happen as expected, saying only about 0.2% of blocks mined on Bitcoin Cash have reported support for Bitcoin ABC.
As of press time, of the last 1,000 blocks mined on Bitcoin Cash, around 80% reported support for Bitcoin Cash Node (BCHN) and just 0.3% for Bitcoin ABC, according to data from Coin Dance.
What the data may indicate is that a fork will occur because the software update by BCH ABC is not supported by most miners, as more blocks signal support to BCHN. This will force BCH ABC to abandon the old chain, said Messari analyst Aidan Mott.
On the other hand, Troutner speculates that the data may have hindered effective support from BCH ABC.
“If you think about it in terms of game theory, some miners are probably legitimately reporting for BCH, but other miners who are planning to mine on ABC are probably also reporting BCHN because they want their competitors to mine on that chain,” Troutner explained. “This makes it easier for them to extract the blocks on the ABC chain.”
Exchanges and ‘fatigue forks’
Ver’s initial argument is that service providers such as PayPal can be frustrated by a cryptocurrency blockchain that is constantly going through forking events. This kind of frustration is already happening in crypto exchanges. While it is not clear which chain will become the dominant chain after the fork, some major cryptocurrency exchanges have already announced their support for BCHN, which will inherit the name Bitcoin Cash, assuming BCH ABC would get the minority of nodes.
In a November 6 post from Kraken, the exchange said it will support BCHN, “regardless of the outcome of the fork”.
“The 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 need to put themselves in a position where they can know what their customers want, which means they understand the type of consensus of the miners but also the positions of the development teams,” Mott said. “In that sense, it would be a fairly easy decision to keep their support and only run Bitcoin Cash Node network software.”
Since the prices of the two newly divided 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 of Kraken’s post is that exchanges can also decide which new chain will go by the name of Bitcoin Cash.
Read More: Roger Ver’s Mining Pool Pulls Support For Bitcoin Cash Dev Fund Over Chain Split Threat
Ver said the reason Bitcoin Cash is less popular than Bitcoin is because Bitcoin got the name “Bitcoin” after the hard fork. Since then, marketing has been one of the biggest obstacles to the mass adoption of Bitcoin Cash, according to Ver.
The market cap of bitcoin cash is around $ 4.88 billion at the time of writing, but bitcoin has a market cap of $ 283.28 billion, according to data on CoinDesk 20.
“When the split happened, the Bitcoin Cash version had all the features that made Bitcoin popular to begin with, but the other version that didn’t have those features got the Bitcoin name and infrastructure to go with it,” said Ver. “Bitcoin Cash has rebuilt all that infrastructure and brand recognition basically from scratch.”
If so, BCHN will face BCH ABC, as support from exchanges shows, if it takes the name of Bitcoin Cash.
