The Bitcoin Cash (BCH) has finally proceeded to its hard fork, after months of tensions between developers. Does this signal the beginning of the end for altcoin, or the promise of a revival?
Bitcoin Cash (BCH) hard fork: who will win the battle?
End of the Bitcoin Cash (BCH) funding debate?
Before undergoing this hard fork, the Crypto Bank project was crossed by heated debates throughout the year 2020. Last January, there had been talk of introducing a „mining tax“ that would finance the development of the network. 12.5% of the rewards would then be automatically paid to the development teams. The measure caused such an outcry from the BCH community that it was quickly cancelled.
But the idea had taken hold. Amaury Séchet, the manager of Bitcoin ABC, an implementation of the Bitcoin Cash protocol, had indeed forced a change for the next network update. Last August, he explained that the new rule would allow to send 8% of the BCH produced with mining to an address controlled by Bitcoin ABC, in order to finance the development.
The Bitcoin Cash (BCH) hard fork took place
It is this unilateral maneuver that forced the inevitable: a hard fork for Bitcoin Cash. The payment network was therefore split into two implementations during its recent update. On one side we have Bitcoin Cash ABC (BCH ABC), which has implemented this new financing tool. On the other side, there is the implementation without mining tax: Bitcoin Cash Node (BCHN).
Supporters of BCHN had historically opposed the network’s financing plans, citing too much centralization of operations. It should also be noted that the two teams had also strongly opposed each other on the new difficulty adjustment algorithm.
The result was that Bitcoin Cash split in two, even though it had already experienced an exodus of its developers when Bitcoin SV (BSV) was created in 2018.
BCH has split into two separate chains – BCHN and BCHABC – with BCHN mining the first block and leading for the #BCH ticker. pic.twitter.com/Og6rKzKjgu
– Bitcoin Cash (@bch_pls) November 15, 2020
„The BCH has split into two chains – BCHN and BCHABC. BCHN has mined the first block and is in the lead for the #BCH ticker. »
Immediately after the hard fork, BCHN collected the most miners: 60% against almost 40% for the Bitcoin Cash ABC version. It is of course still too early to determine if the two versions will be able to stick together in the coming months.
What are the consequences for Bitcoin Cash?
The price of Bitcoin Cash experienced a sudden drop in the hours following this hard fork. While Bitcoin (BTC) and Altcoins were on the rise, it lost more than 10% in the space of one day:
Bitcoin Cash price BCH price
So we have to wait and see how the after hard fork for both versions of Bitcoin Cash will go. For now, it seems that the BCHN has several cards in hand to become the dominant version. But a hard fork is never harmless and the Bitcoin Cash project might have a hard time recovering from it.