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In the letter
- Bitcoin Cash, the sixth largest cryptocurrency by market capitalization, will undergo a hard fork tomorrow, splitting into two separate versions.
- The hard fork move remains highly controversial due to plans to implement an internal 8% “tax” on miners, a move deemed contrary to bitcoin’s decentralized ethics.
- Some large companies like Coinbase will temporarily suspend BCH trading.
Tomorrow around noon Bitcoin Cash, the sixth largest cryptocurrency with a market capitalization of $ 4.7 billion, it will again be split in two. Here’s what you need to know and how to prepare.
Tomorrow, Bitcoin Cash will undergo a ‘hard fork’, which means it is blockchain it will split into two separate versions. This happens when there is a disagreement on the direction of the chain.
Why Bitcoin Cash Forking?
At the heart of this is a dispute between Bitcoin Cash ABC (BCHA) and Bitcoin Cash Node (BCHN), two of BCH’s main clients. Bitcoin ABC has proposed plans to introduce an Infrastructure Finance Plan (IFP) and plans to implement it through a hard fork Tomorrow.
IFP would introduce an 8% mining tax. This means 8% of the rewards miners receive for processing transactions it would go to a software team developing the blockchain.
BCHN believes the plan will discourage miners as it reduces their profits. Additionally, there is concern that it will centralize Bitcoin Cash development around a single team.
Consequently, Bitcoin ABC’s proposal is wildly unpopular, and many people think the Bitcoin ABC fork will fail, as a minority of Bitcoin Cash users will use it. About 82% of miners use BCHN’s full node software. This suggests that they are opposed to the ABC fork.
How to prepare for the Bitcoin Cash hard fork
The exchanges vary in their preparation for the hard fork. Here’s what you need to know about big exchanges and crypto Services.
Coinbase, a major cryptocurrency exchange, expects the BCHN update to become the dominant fork. He will pause BCH’s deposits and withdrawals until he has “determined that the update is stable,” he tweeted on November 5.
BitGo, a primary brokerage firm that has helped manage forks in the past, thinks there is a distinct difference between previous forks and this one: this one lacks the community support it needs to survive. “We will close all BCH services 12 hours before the fork on Sunday 15 November 2020 at 00:00 UTC,” reads a blog post.
Gate.io, a cryptocurrency exchange platform, is less concerned about the chances of survival. It will close the BCH trade before the form. It predicts than the forked coins it will last long enough for regular trading. “If we want to support the trading of” Candy ” [the minority coin] we’ll let you know by posting it on our ad, “Gate.io said.
Kraken, a major cryptocurrency exchange, will do so support BCHN “regardless of the outcome of the fork” and all BCH tokens will reflect that update. Kraken will send customers’ Bitcoin Cash tokens on their behalf. “Clients who want full control over the outcome of the fork should withdraw their BCH to a private wallet,” he advised.
Kraken will only support the ABC fork if “the hashpower on the ABC network is at least 10% of the hashpower on the Bitcoin Cash Node network”. Kraken advises clients to close margins for spot positions opened prior to the fork.
Cryptocurrency exchange Huobi Global want support the hard fork. In front of the fork, Huobi will suspend all BCH Exchange trading pairs, trading, deposits and withdrawals. Recommend traders to close their positions before … yesterday.
Binance will do it suspend BCH deposits and withdrawals at 10:00 UTC tomorrow. He said spot trading will not be affected but will suspend BCH’s loan until tomorrow. The BCHN chain is expected to become the most popular, but “reserves the right” to change the treatment of the rigid fork if the BCH fork becomes the most popular fork.
By adopting a similar stance, FTX will also allow trading of forked coins. “[A] the snapshot will be taken around 12:00 pm UTC and all users with a BCH balance at this time will be credited with equivalent assets on the minority chain “, FTX She said in a statement. “We will closely monitor the situation and may list markets for the minority chain if we believe there is sufficient demand.”
What is Bitcoin Cash?
Bitcoin Cash itself is the result of a hard fork. In August 2017, a group of developers thought that the Bitcoin blockchain was not optimized for payments, as the block size, which represents the number of transactions that can be processed in a single batch, was too small, at 1 MB. . A small block makes transactions expensive and slow to process.
The faction, led by Roger Ver and Jihan Wu of Bitmain, wanted to increase the block size to 8MB. This reduces the transaction fee to a fraction of a cent (compared to more dollars for Bitcoin) and makes transactions faster. In 2018, the Bitcoin Cash block size increased to 32MB.
Bitcoin Cash itself has survived major hard forks. Shortly after its creation, Bitcoin Cash split into Bitcoin SV, or “Satoshi’s Vision”. That hard fork, led in part by Craig Wright, the self-taught (it’s a lot disputed) creator of Bitcoin, increased the block size to 128 MB.
Did all the forks work? Guy. Bitcoin Cash’s transaction fees are a fraction of Bitcoin’s. But its price has undergone a downward spiral since its creation; Bitcoin, however, appears to be on the rise.
