By their nature, cryptocurrencies often employ open-source practices that allow virtually anyone to build upon them and propose new changes. While this is a vital part of the ethos of the decentralization movement that blockchain technology powers, the logistics can often prove confusing for investors.
With something as popular as Bitcoin—which is credited as being the world’s first cryptocurrency—there was bound to be division among supporters. Now, we’re seeing a new split with Bitcoin Cash, which is splitting the Bitcoin spin-off into spin-offs of its own.
Bitcoin Cash (BCH) is an entirely separate cryptocurrency to Bitcoin (BTC) in the modern landscape. However, it was birthed from Bitcoin’s code as the result of an ideological divide in the cryptocurrency community. In making Bitcoin Cash compatible with the future, there is often debate about how the platform should be developed.
As the result of a recent debate, Bitcoin Cash itself has now been split into two blockchains. This means that the cryptocurrency has effectively been divided into two separate cryptocurrencies once again. They are Bitcoin Cash ABC (BCHABC) and Bitcoin SV (BSV).
How hard forks allow ideas to split cryptocurrencies
Many cryptocurrencies such as Bitcoin were designed around the core principle of creating a system for transactions that does not rely on any central party. Instead of having to leverage a bank or rely on a company, the Bitcoin network allows for trustless and decentralized transactions to occur among users.
This means that something like Bitcoin is not the product of any individual or organization, but rather its users as a whole. This has many effects on how ideological decisions and technological changes are made.
Since no one has the authority to change the Bitcoin code for all users, they can only work on their own version of the code. If users appreciate these changes and the majority choose to adopt it, this version of the code will be conversationally referred to as “Bitcoin” from then on.
However, when decisions to adopt a change to a cryptocurrency are particularly contentious or a fundamental split in ideology occurs, these cryptocurrencies can often split into two versions of the same coin in a process known as a ‘fork’.
The origins of Bitcoin Cash
Bitcoin Cash is the product of a fork that occurred during a time when some Bitcoin users were torn on the idea of implementing proposed changes to the network.
One of the main proposed changes involved the blockchain size limitation of one MB that was contentious at the time. In August 2017, a protocol known as Segregated Witness (SegWit) was proposed as a solution for Bitcoin. It was designed to solve issues with scalability in order to theoretically increase the efficiency of Bitcoin transactions.
Proponents of Bitcoin Cash opposed the implementation, and instead decided to increase the network block size from one MB to eight MBs with the goal of improving transaction speeds and lowering fees.
The first implementation of the Bitcoin Cash protocol is credited with the unveiling of what was known as “Bitcoin ABC” by a developer named Amaury Séchet at a Bitcoin conference in the Netherlands. Soon after, other developers introduced their own software that implemented various changes, and the modern version of Bitcoin Cash gained traction.
In 2018, Bitcoin Cash is once again split by opinions (ABC and SV)
When Bitcoin Cash launched, it inherited every transaction in Bitcoin’s history. Since then, however, all transactions have occurred on entirely separate blockchains and are now virtually unrelated.
Bitcoin Cash has since become its own cryptocurrency that shares only programming and a pre-2018 history with the Bitcoin currency that it split away from. Bitcoin Cash since garnered the ticker symbol BCH and is complete with its own advocates, critics, and even forks.
As of November 2018, Bitcoin Cash supporters have found themselves at an impasse, leading the cryptocurrency to split once again.
This recent division largely revolves around planning for Bitcoin Cash’s future. Across almost the entire cryptocurrency landscape, innovators are figuring out how to make cryptocurrencies more scalable in order to compete with existing payment methods in the modern world.
Bi-yearly, Bitcoin Cash undergoes a hard fork in order to implement changes and updates to the protocol. This process is designed to ensure that the currency is compatible with modern standards and that it develops alongside its peers.
In this instance, however, a planned update on November 15th was not met with complete support from Bitcoin Cash users. In what is often referred to in the discussion as the ‘Bitcoin Cash ABC’ community, these supporters believe that the proposed changes are too radical and are not necessary for the platform’s future.
These supporters are at a fundamental disagreement with supporters of Bitcoin SV. The SV protocol is a set of changes to Bitcoin Cash that increases the platform’s block size substantially in an attempt to improve the network’s transaction efficiency.
While cryptocurrencies generally do not have ‘leaders’ due to their decentralized nature, there are some key proponents behind each of these Bitcoin Cash movements. Bitcoin Cash ABC is championed by Roger Ver, an early investor in several Bitcoin-focused startups.
Conversely, Bitcoin SV is championed by a figure known as Craig Wright. The name comes from an initialism of “Satoshi’s Vision,” referring to the anonymous group or figure known as Satoshi Nakamoto who invented the original Bitcoin. This figure has since disappeared, and the identity behind the moniker remains a mystery.
Interestingly, Craig Wright, who now calls Bitcoin SV “the true Bitcoin,” previously claimed to be the real Satoshi. However, this claim has largely been dismissed by other industry pioneers and the broader cryptocurrency community.
Ultimately, proponents of Bitcoin SV (BSV) believe that their changes to the Bitcoin Cash platform align with what the since-disappeared creator of Bitcoin originally envisioned for its future. Bitcoin Cash ABC (BCHABC) proponents, on the other hand, believe in a more measured approach to updating the platform.
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