Bitcoin may Split on August 1st

Even though most Bitcoin users feel there will be no chain split in the next few weeks, they may be wrong. While the BIP91 lock-in makes SegWit2x and the UAHF compatible, it does nothing to address the Bitcoin ABC issue. This user-activated hard fork will still go into effect on August 1st and seemingly gains more traction every single week. Various exchanges will support this solution come August 1st.

BITCOIN ABC IS STILL A MAJOR CHAIN SPLIT LIABILITY

Few people seem to deem Bitcoin ABC to be an actual threat. While it is true BIP91 solved most pressing matters on the network, there is still a chance for a hard fork. It is likely Bitcoin ABC will be the reason why we end up with multiple versions of the Bitcoin blockchain in the future. A user-activated hard fork will certainly create a lot of friction on the network, especially if it can gain enough mining power.

It seems ViaBTC will be one entity supporting this concept moving forward. The company will offer cloud mining contracts using Antminer S9 hardware to actively mine the Bitcoin ABC blockchain on August 1st. Their exchange platform started trading Bitcoin Cash -or BCC- which is the native currency of the user-activated hard fork. This currency can now be traded against the Chinese Yuan.

As we discussed in a previous Bitcoin ABC article, this solution will cause a network split. Any hard fork of existing code will automatically result in two blockchains, unless the entire mining community would suddenly favor Bitcoin ABC over SegWit2x or the UASF. That outcome seems incredibly unlikely, which means we will see a chain split in the end. August 1st will still be a crucial date for Bitcoin, regardless of which solution one wants to support at that time.

Bitcoin ABC is designed to present the Bitcoin community with a choice. That choice comes in the form of big blocks and massive on-chain scaling. It will not rely on second-tier solutions such as SegWit, the Lightning Network, or any other future innovation which acts as a Layer 2 solution. While it is understandable not everyone is in favor of SegWit, a user-activated hard fork to create bigger blocks seems a bit drastic. However, no one will complain about the lack of choices Bitcoin community members have right now.

Bitcoin ABC will never amount to much more than being yet another altcoin. Even the exchanges who will support Bitcoin Cash -two platforms, so far- will not consider it to be the “real” Bitcoin. Instead, they use the Bitcoin Cash name to indicate this is clearly an altcoin and not the real deal. Whether or not this “label” will hurt the future of Bitcoin ABC, remains to be determined. Considering how BCC can already be traded against the Chinese Yuan, it seems there will always be a market for this new currency.

August 1st will still lead to a Bitcoin chain split, by the look of things. Even if Bitcoin ABC gets a marginal amount of hashpower to support it, the chain will live on regardless. It will be similar to Ethereum and Ethereum Classic, as this hard fork is all about ideological differences. Big blocks are the future, according to some, whereas the rest of the community feels SegWit and the Lightning Network are the right way forward. Time will tell who is “right,” although it is possible both solutions will coexist for quite some time to come.