It is time to sum up the interim results and answer the most basic questions related to the bitcoin cash hard fork. If you don’t understand what is happening now, after the BCH blockchain has split, we have prepared a brief "guide" for you.
What happened?
On November 15, BCH hard fork was held, which was divided into two currencies - bitcoin ABC (BCHABC), backed by the original BCH developers led by Amaury Séchet, co-founder of Bitmain Jihan Wu and Bitcoin.com CEO Roger Ver, and bitcoin SV (BCHSV) from nChain Craig Wright and the mining pool Coingeek billionaire Calvin Ayre.
Why did the split happen?
Traditionally, the hard fork is just a technological update. In the absence of a conflict of interest, everyone is switching to an improved model, and the currency continues to exist in a new form. However, this time a consensus could not be reached, which led to the creation of two new coins.
What does BCHABC offer?
Bitcoin ABC updates the BCH protocol with canonical transaction ordering (CTOR), which, according to developers, can provide several advantages over topological ordering (TTOR), which implies the possibility of conducting child transactions only after processing parent operations. СTOR makes a profitable transaction more accessible to miners, but the structure of this transaction also implies that operators along with it will take less profitable transactions that were stuck waiting for the queue.
What does BCHSV offer?
Bitcoin SV insists that the new technology has not yet been tested, as a result of which its implementation may be of a high risk. Representatives of this “camp” believe that at the moment there is no need to change the order of processing transactions, scalability and, consequently, network performance can be achieved by increasing the maximum block size to 128 MB from the current 32 MB.
What is a "hash war"?
The fork that is recognized by the community is the one that wins the war. This requires the support of miners because it is them who ensure the functioning of the blockchain. Now, the hash rate of ABC and SV branches is constantly changing. Until November 17, ABC has consistently held the hash rate championship, but then the situation changed. By the end of the day, SV first surpassed ABC. Gradually, the size of the hash rate in both networks decreased, which indicates the return by the parties of the extra power input to the hard forks. At the moment, ABC has become the leader again.
Why is hash rate so unstable?
“Because it is just the beginning. As the fight between the two sides is now getting real, miners are switching power from BTC to either ABC or SV, this generates quite a mess in the space on you get all this instability. The real problem is that none of the sides want to let the other win, which means they will probably keep pushing for more power, and keep changing their hash allocation. We will probably see some stability only when a winner will be announced,” explained Stefano Covolan, founder of Korporatio.
Why are some blocks dramatically bigger?
SV is moving from 32MB to 128MB per block. It is a big jump, and bigger blocks mean more data inside each of them, overall ending in more transactions to verify inside each block.
What’s more important in determining who wins - hash rate or blocks?
“In a PoW, miners are extremely important. Seeing how things are going at the moment, I would say hash rate is more important. We are seeing the market losing quite a lot in the past few days exactly because of this. If you move your rates from A to B, the entire chain will suffer, in particular now that we need tons of power to make everything working. The bigger miner will be the one to win, simply because that miner can take losses longer than anybody else,” added Stefano Covolan. “Bitcoin cash is currently 55.5% ahead on proof of work” means that ABC has more computation power than SV. And that explains also why ABC is a couple of blocks ahead of SV.
Which side are the trading platforms on?
Most large cryptocurrency platforms support ABC and are cautious about SV, warning customers of the dangers this asset carries. The Kraken platform, for example, while adding the fork, emphasized that its network is unsafe, and the asset is high-risk and speculative, therefore it is better not to work with it. Bitcoin cash ABC fork is more widely supported by trading platforms, for many, it is traded under the ticker of the original bitcoin cash - BCH. Its average market price is significantly higher than that of SV. At the moment, I / O of funds in new cryptocurrencies is still unavailable on the exchanges, this possibility will appear only after the situation has stabilized.
Why is this hard fork so important?
Each of the parties to the conflict pursues its own interests, which has a very negative impact on the entire crypto market. Many analysts believe that such a “split” among project developers could have a negative impact on the market as a whole. The price of bitcoin set an annual minimum, the main cryptocurrencies are in the deep red zone, and the capitalization of the industry has dropped significantly.
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