Bitcoin Cash (BCH) Hard Fork Dilemma in Detail
The Bitcoin Cash blockchain will undergo a controversial network upgrade in a few days, which could split the coin in two. The two camps are BCHN and ABC.
Coins for developers
Bitcoin cash users and followers were surprised by the ABC camp’s proposal. The Bitcoin ABC developer team suggested taking 8% of the block reward from miners.
The ABC team’s proposal, dubbed Bitcoin ABC, would give the coins to its own development team. The idea is not new; privacy coin Zcash also played with this. But many Bitcoin Cash users saw this as a stingy move and feel it is contrary to the currency’s decentralized ethos.
Roger Ver wants it to stop
“Diverting some of the Bitcoin Cash block reward to pay a single development team is a Soviet-style central planner’s dream come true. Please stop, “Roger Ver said in August.
Split in the chain
The most likely scenario is that the majority of miners will support the BCHN version, as opposed to the ABC team version. This makes the ABC version a minority chain.
If a blockchain upgrade is divisive, the blockchain will split into two separate blockchains, each with their own cryptocurrency.
BCHN is getting more support
In recent months, Bitcoin Cash miners have indicated which way they want to go when the fork takes place. They do this by writing messages in new blocks. For example, it says Powered by BCHN, which indicates that they intend to adopt the BCHN version of the upgrade.
So far, 81% of miners have spoken out against the ABC team’s proposal. You can see this in the overview below of the last 1,000 blocks. Pools in this group include from Binance, Antpool, Btc.com, Btc.top, Bitcoin.com, Huobi, Okex, MY7A, easy2mine, and Bejn.
Scholarships follow miners
Either way, the upgrade is coming, and with it a new algorithm will go live on November 15th. The ABC implementation of the upgrade will add the controversial 8% coinbase rule.
Stock exchanges say they plan to support the network upgrade. But if the blockchain splits, they will follow the chain with the most computing power (i.e. most Bitcoin Cash miners).
Three major changes
Three changes are being made. According to Bitcoin Cash’s website, the network upgrade will make changes to the difficulty algorithm, Coinbase rule, and automatic Replay Protection.
ASERT Alogrithm
First, the difficulty algorithm is replaced regardless of the version of the upgrade. A new algorithm called ASERT will take its place. According to the upgrade’s GitHub page, this should put an end to variations in Bitcoin Cash’s difficulty and hash rate.
In addition, the replacement algorithm tries to equalize the profit between fixed miners and miners switching between different blockchains. This update also aims to keep block intervals as close to 10 minutes as possible. Finally, ASERT must also bring the average transaction confirmation time closer to the target time.
ABC
The second part is only for the ABC version of the upgrade. This is the Coinbase rule and the cause of all the controversy. It requires 8% of all block rewards to be sent to a specific Bitcoin Cash address. And that address is of course checked by the Bitcoin ABC team.
Replay Protection
Finally, the upgrade includes Replay Protection. This is to ensure that full nodes that are not upgrading will separate themselves from the main network after the next upgrade occurs on May 15, 2021.