An Idiot’s* Guide to These Bitcoin Forks
I’m not a Core dev — I’m not an engineer at all — and I only bought my first coins around $100, but I am a cryptophile VC, Small ETH miner, and for better or worse among my larger friend group I’ve become the “Bitcoin guy”. Enough of them have asked about these forks that I figured some of you are probably also like “WTF?” So I’m publishing my synopsis here…
Bitcoin Cash (BCH), called “Bcash” by the Core/SegWit devs in an attempt to delegitimize it, is essentially Bitcoin Classic. They vehemently disagreed with the SegWit update and decided to continue Bitcoin as it existed pre-SegWit. They say they’re the real chain and believe themselves the stewards of Satoshi’s vision.
Now the nuances here are (1) that the chain had already been updated tremendously since Bitcoin’s launch and (2) in order to draw a line in the sand the BCH developers instituted what’s called strong replay protection. Here’s a quick overview of that: https://bitcointechtalk.com/how-segwit2x-replay-protection-works-1a5e41767103
Bitcoin Core/SegWit1x (BTC today): The majority of the Bitcoin Core developers supported August’s SegWit roll-out, as both a short-term scaling amelioration (it isn’t a solution as it only saves like 20–35%, I think) and to lay groundwork for potential solutions by way of side-chains (most notably, Lightning; hi Stark!), which can only be implemented on a chain using the segregated witness.
SegWit2x (Nov 16 fork): There is a separate scaling debate around Bitcoin’s block size. Essentially, larger blocks would speed up the blockchain. The politics here, however, are:
(1) Larger blocks would also be more profitable for miners, who thus largely prefer them, and miners have the hard power on a Proof-of-Work chain,
(2) They would also further centralize the blockchain, so most developers are against larger blocks, and while their power is “softer”, since they build the software in the first place most miners eventually acquiescence to the devs,
(3) Block size is really just kicking the can down the road (Bitcoin needs to be 1,000x faster, not 2x) so most devs want to wait for 1,000x-type solutions like Lightning to be tested before making another fundamental protocol update.
Current Status: Last time I checked something like 80% of miners were signaling for 2x, but signals are non-binding so we won’t really know until the agreed-upon fork block hits on the 16th. The developer divide has become so severe that many feel it is having adverse effects on the community in general and hence Bitcoin’s legitimacy. (One Core dev posted a photo of an AR-15 next to his desk, stating he had received death threats.) Some are calling it “Bitcoin’s Civil War”.
Outlook (here’s a much smarter one): Many feel the majority of Core devs supporting the current chain will win out, most miners will fall in line, and those who feel strongly enough to enact a 2x hard fork will remain a small minority like BCH. In that event the reduced uncertainty would likely positively affect BTC’s price (though Wall Street is inflating it with the futures exchange news and doesn’t understand forks). However, if the divide continues and a hard fork is a meaningful minority then you’ll have a split down Bitcoin’s middle. That would be an uncertain world, and would likely drive people to altcoins. We’ll find out on the 16th!
*To be clear, “idiot” is meant to include the author of this post.