Recap from OST LIVE with Brian Krogsgard of Ledger Status — Explaining BCHABC vs. BCHSV and the Bitcoin Cash hard fork
Brian Krogsgard is the host of Ledger Cast and the founder of Ledger Status, a site for blockchain and cryptocurrency enthusiasts. Krogsgard provides a collection of resources, fundamental and technical analysis, and stories on all things crypto. He joined us today to discuss the recent BCH hard fork, the battle of the BCHs, and why the market is taking a hit.
The Creation of Bitcoin Cash
Last year Bitcoin had rising fees and it was relatively difficult to make transactions on the network. Roger Ver, a Bitcoin evangelist nicknamed “Bitcoin Jesus,” had doubts about where some of the Bitcoin core development process was going. In August 2017, Ver, Jihan Wu, Craig Wright, and Calvin Ayre attempted to solve for this issue by supporting the Bitcoin (BTC) hard fork that resulted in the creation of Bitcoin Cash. They had agreed that BCH was closer to the vision of Satoshi’s whitepaper regarding digital cash. This means keeping transaction fees low, making transactions quickly, and making Bitcoin a currency as opposed to a store of value.
Hard Forks
Fundamentally, most blockchain and cryptocurrency projects are software that is run by nodes and miners. A hard fork requests that the participants in the blockchain change the software they’re running. A hard fork is different from a soft fork because it requires drastic changes and significant adjustments. Miners have to switch to new software to support proposed upgrades. We experienced a hard fork last year with Bitcoin and Bitcoin Cash, widely known as BCH. Hard forks can create uncertainty in the market. In some cases, price action is involved when determining which coin will be more widely accepted by the community.
BCH has turned out to be a contentious hard fork. Supporters of Bitcoin Cash Satoshi Visionand Bitcoin Cash ABC have different ideas about what they want the chain to be, battling to be the longest chain with the most accumulated difficulty to be recognized as BCH. Only one can win. It is up to the underlying governance mechanisms to decide which forked cryptocurrency wins. There’s no actual voting built into the BCH blockchain. The voting is based on mining. This introduces new challenges like reply attacks, double spending, and 51% attacks.
Roger Ver versus Craig Wright
Craig Wright, Calvin Ayre, and Jimmy Nyugen are among the backers of Bitcoin Cash SV. CoinGeek, Mempool, SV Pool, and BMG Pool are also backers, currently mining the forked cryptocurrency. BCHSV proposes to increase block size from 32MB to 128MB, radically change the structure of Bitcoin cash, and implement smart contracts gradually.
Calvin Ayre has a lot of mining power. Mining power helps protect a blockchain and keep the network secure. Craig Wright is a big person in the ecosystem — he claims to be Satoshi Nakamoto, the creator of Bitcoin. Ayre and Wright have applied hash power to the BCHSV chain. A live feed of the blocked mined and hashing power can be viewed on coin.dance.
Roger Ver and Bitmain’s Jihan Wu are backers of Bitcoin cash ABC. Bitmain, Bitcoin.com, Antpool, viaBTC, btc.com, and btc.top are among the current backers. BCHABC backers also propose to increase the block size, but by allowing node operators to adjust it. They also propose smart contract capabilities, oracle services, and scaling improvements.
Bitmain has a lot of mining power, so there is plenty of hash power on both sides of the battle. Jihan Wu has tweeted that if BCHABC has to defend BCH against BCHSV, then he is willing to redirect hash power from Bitcoin to BCHABC. He predicted that doing so would drop the price below current levels. Bitmain is one of the most popular cryptocurrency miners in the world.
What’s Happened
In the early hours of the hard fork, it was impossible to predict who would win the battle. We are now starting to see that BCHABC is winning, as it currently has a 40 percent Proof of Work advantage. Deciding which fork is the successor to BCH will include which is the longer chain, how prices react, and raw hashing power. Although BCHSV has applied plenty of hash power, BCHABC has mined more blocks and it has the longer chain. “Essentially the market participants have decided,” Krogsgard says, “market participants being exchanges making statements that Bitcoin Cash will be BCHABC.”
This is not the first time we have experienced a contentious hard fork. This fork is strictly limited to BCH, however — it does not directly affect Bitcoin, or BTC. However, some Bitcoin BTC miners have moved their hashing power over to (BCH. It’s very important to know the differences between the cryptocurrencies and to understand the consequences of supporting one forked currency over another. For example, (BCH is not (BTC, but if BCH had become the longer chain during the August 2017 hard fork, then some exchanges would have recognized (BCH as (BTC. With PoW-based cryptocurrencies, the community votes with mining power.
Coming Up Next on OST LIVE: Matthew Liu
Matthew Liu is the Co-Founder of Origin Protocol, a protocol for creating sharing economy marketplaces using the Ethereum blockchain and IPFS. Liu will discuss how Origin is creating a sharing economy without intermediaries. Subscribe to our YouTube channel or listen to the audio format on anywhere you listen to podcasts, including on iTunes, Stitcher, and Spotify. We’re also now available on Alexa! Simply add “OST LIVE” to your flash briefing.
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OST blockchain infrastructure empowers new economies for mainstream businesses and emerging DApps. OST leads development of the OpenST Protocol, a framework for tokenizing businesses. In September 2018 OST introduced the OpenST Mosaic Protocol for running meta-blockchains to scale Ethereum applications to billions of users. OST KIT is a full-stack suite of developer tools, APIs and SDKs for managing blockchain economies. OST partners reach more than 300 million end-users. OST has offices in Berlin, New York, Hong Kong, and Pune. OST is backed by leading institutional equity investors including Tencent, Greycroft, Vectr Ventures, and 500 Startups.
