The Wright Way?
In what has been a relatively flat period for the rest of the market, Bitcoin Cash (BCH) has been at the centre of an increasingly controversial hard fork debate. The division of the community and subsequent development from that has been an incredibly interesting case study in how decentralised protocols deal with decision making and conflict.
The Update part 1 — Wright’s SV
Bitcoin Cash has struggled since inception to establish itself as a legitimate payments based alternative to Bitcoin. This has been a key catalyst in driving community figures to seek drastic change to the protocol. The release of a statement from major Bitcoin Cash miner CoinGeek demonstrates this, as CoinGeek’s desire to return Bitcoin Cash to its original payments system ethos was made clear. CoinGeek’s release was quickly followed by a press release from Craig Wright’s nChain, outlining their new Bitcoin Cash fork, “SV”.
The SV fork essentially reverts the protocol to the 0.1.0 version of Bitcoin, along with an upgrade to the original block size to 128mb. SV’s first goal is to restore Bitcoin Cash to something resembling the original Bitcoin whitepaper, thus the fork being named “Satoshi’s Vision”. SV supposedly targets the use of its protocol as a peer to peer payments mechanism, suggesting that the changes that Bitcoin Cash had consistently made were not conducive to that use case.
The update part 2 — Bitmain’s response
Following this, the biggest Bitcoin Cash client, Bitcoin ABC, released the details about a new update — version 0.18.0. This included minor technical upgrades to transaction ordering, and some additional opcodes which allow for off-chain messages to be communicated on chain. The update itself doesn’t necessarily change the Bitcoin Cash client in major ways, but the ignorance of Wright’s SV fork in its implementation means that a loss of consensus in client implementations is inevitable — and as such, so is a hard fork. Mining powerhouse Bitmain have since made their position clear on the side of the ABC client implementation, as CEO Jihan Wu took to twitter and labelled Craig Wright “Fake Satoshi”.
The whole BCH community are working together to kick Fake Satoshi out. The resisitence against cult leader proves the inner strength and sophistication of the BCH ecosystem!
— Jihan Wu (@JihanWu) November 9, 2018
With both sides declaring their intent to compete on hash power, it will be interesting to see how the situation evolves. It is rare to see two mining pools compete for 51% of a network, outside of the context of a hostile 51% attack (some may argue this constitutes one). The ability for each individual fork to garner hash power will greatly influence the performance and price of its corresponding currency. The long term success of each individual fork relies additionally on the adoption of the currency by users, as mining power alone has very little influence on the applications built on top of the blockchain — the main current driver of currency adoption.
So, a pretty exciting week in prospect for crypto enthusiasts:
- Who will win the hash power war? We know Bitmain has plenty of muscle but how much mining power has Craig Wright managed to garner over the last year? We’re about to find out
- Will Bitmain switch hash power from BTC to BCH to protect its investment, we think probably and this could drive BTC confirmation times upward and price downward (could do the opposite thought if people seek refuge in BTC)
- Will previously unseen hashpower be launched into this war? Again we suspect from the peaks in BTC hash that there is unused power sat waiting to be deployed.
Stand by your servers. This is going to be a fun week and this could be the first of many hash power wars you see over the next decade.