Bitcoin Cash (BCH) fork split — What does it mean in simple terms?

So you’ve read about Bitcoin Cash splitting but are a bit confused on the reason? Well you are not alone. If you give me 5 minutes of your time, let me get you up to speed!

Bitcoin Cash infamously split from the main bitcoin branch on 1 August 2017. This caused some major philosophical discussion surrounding bitcoin’s original vision at the time. Fast forward 13 months and it feels like Groundhog Day.

There are two camps involved in the new Bitcoin Cash fork each having significant resources, different ideas and with their own coin ‘ticker’:

BCHABC Wormhole implementation:

On one hand we have the Roger Ver / Jihan Wu (Bitmain) alliance which are backing the existing BCH or Bitcoin Cash ABC blockchain.

BCHSV nChain implementation:

On the other hand we have Craig Wright; an Australian Computer Scientist who in the past was suspected as possibly being the original ‘Satoshi Nakamoto’. He intends on splitting to create BCH SV or Bitcoin Satoshi’s Vision.

The most contentious issue creating tension in the Bitcoin Cash ecosystem is ‘pre-consensus’ which is being backed by the BCHABC camp. In simple terms pre-consensus is defined as the use of technologies that establish standards which determine the characteristics of the next block in the blockchain before it is uploaded.

On the other hand, Craig Wright’s nChain proposal is to upgrade the existing 8mb block size limit to a 128mb block size for the network. This is less controversial and was the premise for the original split from bitcoin in the first place (1mb blocks to 8mb blocks).

In both instances there are some major politics at play between large Bitcoin Cash holders and miners. Various sources indicate that BCHABC has the majority of hash power at this stage of proceedings, however until the fork dust settles this is just speculation.

Interestingly Craig Wright made headlines a few days ago tweeting the following:

To all BTC miners…

If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.

Think about it. We will sell A Lot!

Consider that….

And, have a nice day

A very strong declaration of intent, indeed.

In summary, we are witnessing a very high level political battle between a group of influential Bitcoin Cash proponents. In market terms, we have already seen a response with a recent large scale buy up of BCH prior to the fork. In most instances the large exchanges are stating they will trade the forked chain, which has people scrambling to receive their ‘free’ forked coin; at one stage driving existing prices up almost 30%. Although as I write this article the entire cryptocurrency market has dropped significantly, raising the question whether this kind of high profile battle is negatively affecting the sector.

Again it will be interesting to see whether the original chain dominates proceedings.