Just days away from yet another hard fork for the Bitcoin Cash cryptocurrency, there’s some strange weather brewing for both of the spinoffs of this additional split.
Those who have been paying attention to Bitcoin Cash (BCH) know that it generated as a hard fork off of the original Bitcoin last year. Now it’s due to split on November 15 into Bitcoin ABC and Bitcoin SV.
Over at Ethereum World News, in an article posted today called: “Does the Bitcoin Cash Hard Fork Hurt Mainstream Adoption?” Michael Lavere talks about how processors and exchanges are favoring Bitcoin ABC. But at Bitcoinist, in an article yesterday, John Norsted reveals how miners may have a preference for Bitcoin SV!
“Bitcoin SV is projected to control the network after the fork. That is a completely different outlook compared to how traders perceive things. The pre-fork trading of SV and ABC clearly shows Craig Wright’s vision has far less ‘financial support’.”
A little more digging shows that this new Bitcoin Cash fork is contentious in more than one way – Craig Stephen Wright, who has been central in the Bitcoin Cash community, is mounting a challenge with the new Bitcoin SV, while others are making efforts to banish him from the Bitcoin Cash world entirely.
But the other more organic struggle over Bitcoin Cash’s hard fork shows exactly why hard forks can be so destructive in the cryptocurrency universe.
Some experts characterize the competition for mining power as a “hash war” – a process where one or the other hard fork version gets more “hash power” and is better able to generate blocks and process transactions over time. There’s a metric called mean block time that analysts use to talk about continual mining.
So while Bitcoin Cash SV seems to be winning the hash war, it’s apparently not winning the hearts and minds of either the exchanges or the individual investors – and so market activity is going in a different direction. This presents all sorts of opportunities for confusion, chaos and conflagration. In the article mentioned above, Lavere characterizes a potential problem this way:
“Bitcoin ABC, the main implementation of the currency BCH software is being favored by payment processors and crypto exchanges for its continuation of the blockchain technology, compared to the upcoming newcomer of Bitcoin SV,” Lavere writes. “While investors who keep their coins off-exchange will be able to duplicate their holding following the fork, Bitcoin SV is in danger of falling through the cracks of support post-launch if few exchanges integrate the currency for trade. The end result could be confusion for the investment base and an unnecessary pumping in price for the fourth largest cryptocurrency by market capitalization–factors that hold the potential to harm the image of cryptocurrency to mainstream adopters.”
With something as intangible and complex as cryptocurrencies, it’s absolutely important to have some type of consensus on the way forward. A hard fork is, in itself, a consensus crisis as it is defined by cryptocurrency experts. If parties can’t agree, the hard fork occurs. How many hard forks can a cryptocurrency handle?
In some ways, that’s kind of an untested puzzle, and one that Bitcoin Cash is testing to some extent. Look for all of this back and forth to be reflected in this area of the cryptocurrency market. Along the way, you’ll learn quite a lot about how miners, processors and everyone else work together (or how they don’t) to create stability and consensus for a coin.