Bitcoin Cash Hardforks On May 15th. What Does It Mean For BCH Owners?

On May 15, 2018, the Bitcoin Cash blockchain will undergo a network upgrade that will implement some drastic changes to its underlying protocols. The price of Bitcoin Cash (BCH) has soared considerably in the last one week.

Published in

CoinSwitch

6 min readApr 27, 2018

In November 2017, Bitcoin ABC developers released a Bitcoin Cash roadmap representing their goals for the next 6–12 months. Keeping in mind the team’s priorities to constantly improve the Bitcoin Cash network and its functionalities, the roadmap concentrated on improving aspects of the Bitcoin Cash (BCH) blockchain, a few at a time. This also included plans to reactivate some Bitcoin Opcodes (operational rules) that had been deactivated in the past. Additionally, the developers proposed protocol extension points to facilitate future upgrades — leading to developments like Colored Coins. However, all BCH protocols proposed in November were subject to further discussion, implementation and testing.

The BCH development team (Bitcoin ABC) confirmed a Bitcoin Cash (BCH) hard fork scheduled at 12:00:00 UTC on 15th May 2018.

Need for the hard fork

The BCH development team feels it is absolutely necessary to have a hard fork every 6 months to keep the protocols upgraded regularly. Hence, a BCH hard fork is scheduled every 6 months, the next one being in May. Following a meeting of seven BCH developers in London in November 2017, the May hard fork is set to improve the functionality and operations of the Bitcoin Cash blockchain.

There are several upgrades that are expected to happen in this fork. Bitcoin Cash will become more than just a financial cryptocurrency, and offer more functionalities, like Ethereum.

The block size is to be upgraded to 32 MB. This is the largest block-size that can be implemented without altering the fundamental peer-to-peer protocols in a blockchain.
The size of certain parameters in the blocks will be increased from 40 bytes currently to 220 bytes thus, allowing users to add more data on the blockchain. This concept will find application in colored coins, wherein an investor can can track other assets which are not validated by crypto-coin miners.
Increasing this size will also facilitate time stamping of data. This will further allow users to now hash documents and add them to the blockchain, which can be later used as substantial proof of the existence of the document.
Several protocol extension points using a scripting system in the transactions have been included for the development of colored coins, and simplified smart contracts to perform automated functions. These smart contracts would not only help in the advancement of self executing programs that would revolutionise the crypto industry, but also help the crypto-investors to leave funds for someone to receive at a future date.
Additionally, existing functions that had been disabled earlier due to bugs in the protocols will be reactivated. This move was made as a few of the advanced smart contracts will use these functions.

Bitcoin Unlimited [BU] is the full node implementation for Bitcoin and Bitcoin Cash networks. It is reported that BU also has a vital role to play in the upcoming hard fork along with ABC developer team.

What this means for BCH hodlers

A hard fork has popularly come to be seen as an opportunity for users to get free cryptocurrencies. Since Bitcoin Cash itself was born from a fork of Bitcoin in 2017, users holding Bitcoin received an equal number of Bitcoin Cash in their wallets. But in reality, this only occurs in cases of a contentious split, where miners or node continue to run separate blockchains and not all ‘upgrade’ on the fork.

If some Bitcoin Cash nodes do not upgrade on this fork, they may end up with another chain that could operate independently, although whether this chain would gain any popularity and acceptance is unlikely. Currently, no chain split is expected.

An important user impact however, is being seen on the price. On April 18th, the price of a single BCH token was worth about $770, which increased to $1550 on 24th April, by nearly 100% following the announcement on the hard fork. Clearly, the fork is already having a positive impact on BCH’s reputation. Expect the value to increase further as the fork date approaches closer — which means now may be a good time to get yourself some Bitcoin Cash.

Additional details about the fork

The Bitcoin Unlimited (BU) dev team will increase the block size by reducing the block intervals to 1–2.5 minutes. The team has also announced a new address (along with Cashaddr suggested by Bitcoin ABC) format to allow users to send Bitcoin Cash to various Bitcoin addresses. BU along with the BCH development team, is also working to achieve more efficient and seamless mining processes.

There are also talks of recruiting development teams who can develop and integrate tokenization functions in Bitcoin Cash blockchain — much like Ethereum has ERC20 tokens that support other cryptocurrencies. These developers will work to create an interactive system that has the capability of producing secure blockchain based tokens. An audit solution for the customers, to check the validity of their tokens would also be needed.

Currently, the ABC development team is running tests on both the new rules and their activation. They have also released a testnet (an internal blockchain for testing purposes) for public groups to test the new features. The subsequent Bitcoin Cash fork is scheduled to occur in mid-November 2018, following the fundamental belief that regular upgrades are required to develop the quality of the BCH blockchain.

Exchanges supporting the fork

Given the wide support for the fork all across the community, all major exchanges — including major ones such as KuCoin, Bittrex, Cryptopia and more are expected to support the hard fork. All of these exchanges are supported on CoinSwitch as well — which means you can trade your upgraded Bitcoin Cash post the hard fork directly from CoinSwitch!

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