What will another hard fork mean for Bitcoin Cash?
|Beyond the U.S. election, a potential coronavirus vaccine, Bitcoin's resilience, and its recent leap in hash power (up 42% in two days), a lot of the talk in the crypto community is surrounding the upcoming Bitcoin Cash hard fork. The fork will be contentious with neither side in agreement and it's highly likely that two chains will emerge. So, what will this mean for the most famous Bitcoin fork and will it affect its longevity moving forward? Let's take a look.
In any development project, there are always differences of opinion over which features are the most important, what upgrades are needed, whose opinions should be taken into account, and how to continuously and sustainably fund the project. All these challenges are par for the course and all cryptocurrency projects face them every day, implementing different solutions that best suit the needs of their projects and communities.
With the growing protagonism of governance tokens, we're seeing more and more blockchains trend away from hard forks and put the decisions about development direction directly in the hands of community members who accumulate voting rights and reach an agreement on proposals. However, when it comes to Bitcoin Cash, no such mechanisms exist and, if the developers cannot reach an agreement, the only option is to stage a hard fork.
What's the Bitcoin Cash Hard Fork All About?
With a hard fork over block size already occurring exactly two years ago, that saw the emergence of Bitcoin SV, Bitcoin Cash is becoming notorious for being unable to settle its disputes. The upcoming hard fork on November 15 will take place between developers in disagreement over the funding of Bitcoin Cash.
On the one side, you have a group of developers, proponents of Bitcoin ABC, who are proposing an upgrade to the network that would, among other things, redirect 8% of mining rewards to the development team. This may seem like a plausible way of funding the development of this popular altcoin, after all, popular coins like Zcash have had a similar system in place for years; but it's been met with more than a little opposition.
Most notably, Roger Ver, heading up the opposite faction for BCHN, is against the miner tax, believing it to clash with Bitcoin Cash's decentralized ethos and likening it to a "Soviet-style central planner’s dream come true," on Twitter.
BCHN is also planning to make some changes but in the form of an algorithm and uncontroversial upgrade that will end variations in Bitcoin Cash's difficulty and hash rate and ensure a fairer profit share between steady Bitcoin Cash miners and ones that mine across different networks. It also has security measures against Replay attacks baked in.
At the current moment, more than 80% of miners are signaling support for BCHN by adding messages to newly mined blocks, such as "Powered by BCHN." Just 0.3% of miners are currently supporting Bitcoin ABC's proposal, which means it looks very likely that BCHN will emerge as the dominant chain.
If this happens, exchanges will agree to assign the Bitcoin Cash name and BCH ticker to the chain with the most hashing power and highest price. You can read the details of OKEx's policy toward the Bitcoin Cash hard fork here.
What Does This Mean for Bitcoin Cash?
Bitcoin Cash hasn't exactly put in a stellar performance when compared with Bitcoin in 2020. In fact, at a time when Bitcoin is gaining momentum and posting YTD gains of 115%, Bitcoin Cash is trading at record lows against BTC, even lower than in 2018. And while other altcoins like Ethereum and up-and-coming DeFi protocols and tokens have seen outstanding results and registered record gains, Bitcoin Cash seems to be sliding in popularity.
Yet another contentious hard fork may rattle Bitcoin Cash investors and hurt the coin's prospects for the long term. As we can see from the declining price and hash rate, this certainly appears to be affecting the altcoin right now. However, the key to longevity lies in iteration and coins must seek to improve and upgrade as they evolve.
It could also be that the hard fork serves to finally resolve the miner tax issue that's been dogging the BCH community for too long, repairing developer differences, and shoring up the network, making it more robust, secure, and less susceptible to attacks. In short, it could be good for Bitcoin Cash in the long term. Either way, just like the rest of the crypto community, OKEx will be watching with interest as the latest drama unfolds.
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