2018-11-2 20:31 |
Hard forks are tense times for any protocol. Blockchain updates need to be implemented seamlessly and harmoniously. Not all work, but the upcoming Bitcoin Cash fork is doing the opposite. Prices are on the rise as investors turn their attention back to the coin that fans still call “the one true Bitcoin”.
Bitcoin Cash prices have been stagnant since the start of the week. Starting Monday at approximately $415, the price ranged within a ten dollar spread right up until Friday afternoon. BCH prices surged at around 13:00 GMT to well above $455 in little more than two hours. Although only a $20 increase per coin, these small gains play out at a $500m increase in the coin’s total value. It’s like last year’s bull run all over again.
The price rise coincides with announcements from some well-known exchanges expressing support for the upcoming Bitcoin Cash fork, set to take place in just under two week’s time. Chief amongst them was the Binance, the world’s largest exchange, which announced at midday that it would support the fork. Hong Kong exchange OKEx has also said it would support the system update.
Bitcoin Cash Fork: the details.Most system hard forks lead to the creation of two chains: the original chain, which stays the same, and the new chain which includes the system updates. Parties migrate to the new chain, leaving the old one. It still exists, but without any users, it essentially stops working. It would be impossible for transactions to be confirmed on the network.
That’s if it all goes according to plan, and forks don’t always do that. The DAO debacle back in 2016, when hackers made off with millions of Ether (ETH) by exploiting a loophole in the codebase, led to the creation of two separate blockchain networks: Ethereum and Ethereum Classic (ETC). The two are technically identical, the main difference is ETH doesn’t honor the hack, whilst ETC does.
The Bitcoin Cash fork is a way to resolve some of the disagreements amongst the network’s key developers. The dispute is multi-faceted. Whereas all the groups want to improve the BCH’s scalability and performance, there’s no agreed way on how to do this.
Some parties, including Bitmain, argue that changes to the scripting language will enable the protocol to handle non-cash transactions, but want to keep the blocksize at 32 MB. Others disagree. Mining pool and chief BCH advocate, CoinGeek, doesn’t want to enable non-cash transactions but wants to raise the block size up to 128 MB.
The differences are seemingly irreconcilable, and the debate has become heated over the past few months. The Bitcoin Cash fork is seen as a way to test out and find the best solution. On November 15th the network will split off into multiple different chains, each implementing a separate set of system updates. Over the period, many exchanges will suspend BCH trading.
So why the BCH price rise?The intention is the fork will allow the better chain to win out over the others. That said, some figures within the space, including Ethereum founder Vitalik Buterin, have even suggested that the fork could result in the creation of two separate communities. The now defunct ‘BCC’ ticker symbol could be brought back from the dead.
The BCH community should NOT compromise with Craig Wright to "avoid a split" and should embrace it as an opportunity to conclusively ostracize and reject him. Bitcoin Craig (BCC) can go take the ticker symbol from the now-defunct cryptocurrency to which it is a fitting successor.
— Vitalik Non-giver of Ether (@VitalikButerin) August 22, 2018
This is a clear opportunity for investors. Whenever a hard fork happens, token holders receive tokens both on the old and new chain. Most of the time this doesn’t really matter. If no one uses the old chain then the tokens are essentially worthless. But no one knows how the Bitcoin Cash fork is going to go; it might lead to the creation of two new networks.
If that happens token holders will receive a whole set of new tokens that have value, essentially duplicating their holdings. That exchanges, like Binance, have come out in support of the fork gives it legitimacy. That they will also suspend trading over the fork window creates a time limit. Investors are getting in now to gain exposure and reap the benefits.
Time’s a’ticking.
The author is invested in ETH, which is mentioned in this article.
The post Bitcoin Cash Fork Whets Investor Appetites appeared first on Crypto Briefing.
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