ABC vs CV: Assessing the Consequences of the Bitcoin Cash War
It has been more than a week since the Bitcoin Cash (BCH) blockchain was split into two during the fateful hard fork. Two opposing sides clashed over the future of BCH as an asset, and it is time to see where both parties stand, now that the dust has finally started to settle.
Conservatives secured the victory, but the cost was high
As described in an earlier Cointelegraph article, Bitcoin ABC (BCH ABC, where ABC stands for Adjustable Blocksize Cap) is spearheaded by the likes of Roger Ver, renowned BCH advocate, and Jihan Wu, co-founder of Bitmain, an extremely powerful mining outfit. It was founded back in July 2017 as part of the original BCH blockchain, but morphed into an independent entity as the conflict escalated and the split became inevitable.
BCH ABC proponents stand for the idea that the basic structure of BCH “does not need any radical change.” Still, Bitcoin ABC’s roadmap suggests further development of the network, mainly via increasing Bitcoin Cash’s blocksize (hence the name) and minimizing transactions costs.
On the other side of the corner was Bitcoin SV (Satoshi’s Vision) lead by Craig Wright, who has previously declared himself as Satoshi Nakamoto. Other supporters include niche news outlets like CoinGeek, CalvinAyre and Bitcoin.org. BCH SV was created in August 2018, not long before the hard fork began.
The “reformers” attempt to restore “the original Satoshi protocol” by changing the BCH structure. Specifically, the plan involves entirely overwriting the network scripts of Bitcoin ABC and increasing the block size of BCH from 32MB to a maximum of 128MB to elevate network capacity and scale.
On Nov. 15, the BCH blockchain was split, and both parties started to form blocks on their respective, separate blockchains. The aim for both was to assert dominance, get as many blocks as possible, and show that their rule set is more reliable. Both sides mobilized some of their mining power, shifting it from BTC to BCH during the peak time of the conflict. That could have affected the Bitcoin (BTC) price, and therefore the overall crypto market, which notoriously started to slump at the time, eventually resulting in the market’s current, shredded state.
According to statistics from Bitcoin Cash data aggregator Coin Dance, BCH ABC has been accumulating more proof-of-work (PoW) than BCH SV since the date of the split and, eventually, it won the allegiance of major crypto exchanges including Bittrex, Kraken, Bitstamp, and Coinbase, among others, who initially chose to halt BCH trading during the most active stage of the hash war: after several days of silence, those exchanges appointed the winner by assigning the original “BCH” ticker to the BCH ABC rule set. Other signs suggesting that BCH ABC has come out ahead include platforms like CoinMarketCap merging BCH and BCHABC listings, and cryptocurrency hardware wallet Ledger, which resumed its BCH services in the form of BCH ABC only.
Further, news about BCH SV failure could have helped BCH ABC to further cement its winning position. On Nov. 19, Peter Rizun, chief scientist of Bitcoin Unlimited, reported that BCHSV suffered a blockchain reorganization (a situation when a node or a blockchain client needs to disregard blocks they have previously considered as accepted). Emin Gün Sirer, creator of the world’s first cryptocurrency to deploy a PoW concept and vocal critic of BCH, soon questioned BCHSV’s level of decentralization.
“This should not be possible in a decentralized system.
“You can only invalidate your own block and create a new tail if you're the majority miner. BCHSV is a centralized coin.”
Haters gonna hate: Bitcoin SV lives on as “the original” BTC, not BCH
Nevertheless, Bitcoin SV is far from being dead. First, on Nov. 16, Binance, one of the largest players among crypto exchanges, opted to stay neutral in the fight: its CEO, Changpeng Zhao, announced that both tickers — BCHABC and BCHSV — “will stay” on his platform under their respective tickers, thus recognizing BCHSV as an independent entity. Currently, BCH ABC trades at $183 there, while BCH SV is set at $114. BCH price on other exchanges seem to correlate with BCH ABC price on Binance, as per CoinMarketCap data.
Then, around Nov. 19, Kraken, the platform which initially claimed it would only support one of the two BCH chains – Bitcoin Cash ABC – launched trading of its counterpart chain, Bitcoin SV under the “BSV” ticker. Still, in the accompanying blog post Kraken warned its clients that “Bitcoin SV does NOT meet Kraken’s usual listing requirements,” adding that there are “many red flags” that traders should be aware of, including miner coercion:
“Custodial losses taken on due to attacks originating from nChain or its affiliates will be socialized among all BSV holders on Kraken. Given the volatile state of the network and threats that have been made, Kraken cannot guarantee perfect custody of BSV.”
Afterwords, on Nov. 23, billionaire entrepreneur and BCH SV supporter, Calvin Ayre, declared that the coin “no longer want[s] the name Bitcoin Cash [BCH]” in an article published on his own crypto media outlet CoinGeek.
The statement clarified that Bitcoin Cash SV will continue to exist independently from Bitcoin Cash (BCH), and that the coin is in fact the “original” Bitcoin (BTC):
“Bitcoin SV is the original Bitcoin not the original Bitcoin Cash.”
Bitcoin (BTC), in turn, is referred to as “Segwit BTC” in the article.
The author also accuses supporters of both BTC and BCH of having “tinkered it [Bitcoin] to death,” as their cryptocurrencies “abandoned Bitcoin’s core principles by abandoning Nakamoto consensus and trust in miners’ Proof of Work.”
Ayre finished by saying that he has instructed his team to “start working with everyone” to release Bitcoin SV as an independent coin from Bitcoin Cash. The coin is scheduled to release as soon as next week during a CoinGeek event.
BCH, in turn, has been steadily losing its value since the hard fork began. It trades at around $197 as of press time, according to Coin360.