It’s judgment day for Bitcoin Cash.
After a vicious war of words between the two competing sides, Bitcoin Cash will execute a hard fork today and split into two separate blockchains. By the end of the day, we may have two new cryptocurrencies on the market:
Bitcoin Cash ABC and Bitcoin Cash SV.
However, the developers behind Bitcoin Cash SV do not expect the two new blockchains to live in harmony.
Background reading: November’s Bitcoin Cash Fork, Explained
Bitcoin Cash SV: “The Intention is for Only One Chain to Survive”
Looking back to a press release issued earlier this month, the Bitcoin Cash SV camp explained clearly:
“With Bitcoin SV, we are not seeking to create a new Bitcoin variant and we are not intending to create a new Bitcoin SV token.”
The statement was issued by nChain, the software and development company behind the proposed SV upgrade. It continues:
“There will likely be a period of time before this temporary chain split is resolved, while miners are voting with their hash power.”
In other words, they believe only one chain should be allowed to exist after the fork: the longest one. That will simply be determined by how much hash power (or mining computer power) is directed to each chain.
“No Transaction Replay Protection” – a Technical Trip Wire
Transaction replay protection is a mechanism built into blockchains that makes transactions on one blockchain invalid on the other one.
Bitcoin Cash SV has not implemented this protection.
Without transaction replay protection, it means users can unwittingly lose money by accidentally transacting on the wrong chain. It also opens up holes for hackers to exploit.
It’s a sign of war from Bitcoin Cash SV. They expect the “losing” chain to peter out, with no protection needed.
If you’re a Bitcoin Cash holder, however, you need to be careful. The best advice is to keep your Bitcoin Cash safely in a wallet until the dust settles.
A Fight for Hash Power
If only one chain is to exist, it will come down to a fight over hash power. In other words, the decision lies with Bitcoin Cash miners: which upgrade will they devote their mining power to?
Indications suggest that Bitcoin Cash SV has the edge with at least 72% of estimated mining hash power compared to ABC’s 13%.
This also gives SV the potential power to initiate a 51% attack against the ABC blockchain. Craig Wright, the man behind SV has not ruled out this possibility. Miners could also mine “empty blocks” that don’t contain any transactions. It would effectively bring the blockchain to a halt.
Further reading: BCH Fork Wars: Who’s Winning? (The Two Sides, Explained)
What will happen?
It’s still too early to tell. However, there are three possible outcomes:
- Only one coin survives – As Bitcoin Cash SV hopes, a dominant chain could emerge and overwhelm the hash power of the other.
- Two coins emerge – If hash power is shared to a viable extent, there may be two concurrent blockchains and two separate cryptocurrencies.
- Implosion – There’s a chance that the vicious infighting and nefarious hashing actions could kill the value of both blockchains and endanger the entire future of Bitcoin Cash.
Block Explorer will keep you updated as more news comes in.