There is still a lot of uncertainty about the Bitcoin Cash fork event scheduled on November 15, but one thing is certain: The cryptocurrency’s biggest advocate, Roger Ver, the executive chairman of Bitcoin.com, is not a fan of the scheduled upgrades on the network, which happens every six months.
“If PayPal knew that this kind of controversial hard fork was likely to happen, they might not have added bitcoin cash at all to their roadmap,” Ver told CoinDesk in an interview, referring to PayPal’s recent announcement to add cryptocurrencies – bitcoin cash included – to its system. “So it’s really a big problem to have these controversial forks. I would like to see that come to an end. ”
As of press time, PayPal has not responded to CoinDesk’s request for comment on the upcoming fork event. Paxos, the company that provides crypto service for PayPal, rejected CoinDesk’s request to comment on the subject.
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Bitcoin fork known for forks
Unlike a “soft fork” that allows non-upgraded and upgraded nodes to still negotiate with each other, a hard fork is a software upgrade that implements a new rule for the blockchain that is not compatible with ‘ r older software. Therefore, developers tend to be extremely conservative about the introduction of hard drives and usually try to ensure that there is community consensus on these types of code changes. However, some hard forks have been controversial. In these cases, if some nodes on a network adopt a hard fork and others do not, then the blockchain will split into two different versions: one with the old software and one with the new software.
Bitcoin Cash itself is the result of a hard fork by Bitcoin, after a group of the Bitcoin community, in favor of the literal interpretation of Satoshi Nakamoto’s Bitcoin white paper, insisted on increasing block sizes. They pushed for a hard fork of the original Bitcoin blockchain, as they view low-cost, peer-to-peer transactions as the core value of the blockchain.
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Today, as the best-known fork of Bitcoin, the Bitcoin Cash network is upgraded every six months, and a chain split can occur when the community cannot meet consensus requirements. An example is when Bitcoin Satoshi Vision (BSV) forked off Bitcoin Cash on November 15, 2018.
The Bitcoin Cash hard fork expected this coming November 15 was the result of a blockchain update proposal by a group called Bitcoin Cash ABC (BCH ABC), led by developer Amaury Sechet. The update has included a controversial new “Coinbase Rule” that requires 8% of bitcoin cash to be redistributed to Bitcoin ABC as a way to fund protocol development.
Developers with ‘too much money’
This funding approach has sparked a debate within the BCH community about the governance and development of the software running the Bitcoin Cash blockchain.
The developer-led group from BCH ABC maintains that there should be an organized and consistent effort for bitcoin cash to become a universal digital payment. Therefore, developers should be funded by the Bitcoin Cash network, according to Chris Troutner, a developer who previously worked at Ver’s bitcoin.com and is close to ABC’s BCH group Sechet.
However, an opposition group against this funding mechanism, including Ver, said that because the software is an open source protocol, developers should voluntarily help improve the protocol and look for financial resources elsewhere.
Ver went further by saying that the problem of the Bitcoin Cash network is that developers have “too much money.”
“I think the way [Bitcoin] it went off the lines of Bitcoin Cash is that developers had too much money and then they started developing and tinkering with too many different things, which caused a problem in the network. ”
Troutner, who told CoinDesk that he will support both chains after the fork, said the real issue behind the dispute is mutual hatred towards Sechet. BCH ABC Sechet has been leading the scheduled Bitcoin Cash updates over the past few years, Troutner said. And the Sechet team has always wanted to implement this funding mechanism.
“[BCH ABC’s opponents] want Amaury Sechet to leave the ecosystem, ”he said.
Read more: Ethereum’s ‘Unannounced Hard Fork’ sought to Prevent the Right Disruption Caused
Ver said he did not believe the fork will go as planned, saying only about 0.2% of the blocks mined on Bitcoin Cash have indicated support for Bitcoin ABC.
As of press time, of the last 1,000 blocks mined on Bitcoin Cash, about 80% have indicated support for the Bitcoin Cash Node (BCHN) and only 0.3% for Bitcoin ABC, according to data from Coin Dance .
What the data can indicate is that a fork will happen because the software upgrade from BCH ABC is not supported by the majority of miners, as more blocks are indicative of support for BCHN. That will force BCH ABC to fork away from the old chain, said Aidan Mott, an analyst at Messari.
On the other hand, Troutner claims that the data may have hampered BCH ABC’s actual support.
“If you think about it in terms of game theory, some miners are probably legitimate signals for BCH but other miners who are planning to mine on ABC are probably also signing for BCHN because they want to to their mining rivals on that chain, ”Troutner explained. “That makes it easier for them to mine blocks on the ABC chain.”
Exchanges and ‘fork fatigue’
Ver’s early argument is that service providers like PayPal can be frustrated by cryptocurrency blockchain that constantly goes through fake events. This kind of frustration is already happening in crypto exchanges. While it’s unclear which chain will become the main chain after the fork, a few major crypto exchanges have already announced their support for BCHN, which will inherit the Bitcoin Cash name, assuming the BCH ABC gets the minority of goals.
In a Nov. 6 post by Kraken, the exchange said it will support BCHN, “regardless of the outcome of the fork.”
“Bitcoin Cash Node tokens will be called ‘Bitcoin Cash’ on our platform and be represented by the ticker symbol ‘BCH,’” Kraken said in the post. “We will support Bitcoin Cash ABC ONLY IF the hash power on the ABC network is at least 10% of the hash power on the Bitcoin Cash Node network.”
“Exchanges have to put themselves in a position where they can know what their customers want, which means they not only understand the kind of miners’ consensus but also understand the positions of the development teams,” said Mott. “In this sense, it would be a fairly easy decision to retain their support and run only Bitcoin Cash Node network software.”
As the prices of the two newly shared cryptocurrencies will be determined by market supply and demand, exchanges play a significant role because they are the ones that allocate the new tokens to their customers.
Another important implication of Kraken’s post is that exchanges also have to decide which new chain will take the name Bitcoin Cash.
Read more: Roger Ver Mining Pool Support for Bitcoin Cash Dev Fund Over Threat of Split Chain
Ver claimed that the reason Bitcoin Cash is less popular than Bitcoin is because the latter took the name “Bitcoin” after the hard fork. Ever since then, marketing has been one of the biggest obstacles for mass adoption of Bitcoin Cash, according to Ver.
Bitcoin’s cash market capitalization is around $ 4.88 billion at the time of writing, and yet bitcoin has a market capitalization of $ 283.28 billion, according to data on CoinDesk 20.
“When the split happened, the Bitcoin Cash version had all the features that initially made Bitcoin popular, but the other version that didn’t have those features was given the Bitcoin name and infrastructure to go with it,” he said Ver. “Bitcoin Cash has been basically rebuilding all that infrastructure and its brand recognition from the start.”
If that is the case, BCHN will find itself ahead of BCH ABC, as evidenced by the support of exchanges, if it takes the name of Bitcoin Cash.