BCH: 7 Days That Shook the Crypto World
TechnologyBit News Today2 min read
On November 15, 2018, a highly anticipated event finally arrived in the crypto world: Bitcoin cash split, as it underwent a "hard fork" that resulted in two separate versions of the blockchain. Crypto markets grew nervous as rival factions promoted incompatible versions of the cryptocurrency ahead of the high-stakes split. Prices for top cryptocurrencies plummeted: Bitcoin crashed 39% between November 13 and 24, from $6,339 to $3,854, its worst 11-day period since 2014. Ethereum declined over 15%, and Bitcoin cash itself fell 18%.
A divide sprouted by scaling debate
The contentious split was driven by a debate over network scaling. In this round, the "originalists" in one camp claimed fidelity to the ideas in Satoshi Nakamoto's original Bitcoin white paper. Spearheaded by a group called Bitcoin SV—short for Satoshi's Vision—this faction insisted the network should only adopt ideas from Satoshi Nakamoto's original bitcoin white paper. Meanwhile, the widely used Bitcoin ABC implementation scheduled an upgrade with two core changes: new rules for the ordering of transactions in a block and the addition of two new operations to the scripting language.
Mining pools' muscle flexing live
But the split itself wasn't only about technical upgrades. Coming to a dramatic conclusion was a battle for control over the hash rate. The division ultimately turned into a power struggle over who would control the future of Bitcoin Cash. The schism pitted Bitcoin ABC's maintainers against Craig Wright, whose claim to be Satoshi Nakamoto was doubted by insiders, while Bitcoin SV was backed by the CoinGeek mining pool and its roughly 16.8% share of the hash rate. The outcome of the hash-war drama played out in riveting real-time drama, building to a chain's decisive moment, live-streamed on YouTube. "Ver, behind the scenes, had redirected his awesome hashing power from Bitcoin to Bitcoin Cash, ramping it up 4,000 petahash— which seems very big indeed!— and surpassed Wright’s own firepower," observers of the Tokyo livestream recounted. "And even more thrilling news from the Ver camp: 'Bitcoin.com just mined a block,' somebody called out. Bitcoin.com gradually pulled ahead by three blocks.
ABC gains upper hand after losing millions
A week after the rift, the new Bitcoin Cash ABC may have emerged on top, but it was at a cost: With millions spent on the fight, the two crypto factions had quickly fractioned into two separate coins, with each losing huge amounts of their value. The price of Bitcoin Cash ABC fell from $571 to a low of $160. The other, Bitcoin Cash SV, plunged from $571 to $40. Together, the two forked coins fell to a combined value of $291, or 6.7% of bitcoin's worth, down from 8.9% on November 8.
