Exchanges, Startups Pick Sides After the Bitcoin Cash ‘Hash War’

The so-called “hash war” over the future of bitcoin cash is over – and what remains appears to be a persisting rivalry between the forces behind what are now two distinct cryptocurrencies.

Created in November when the blockchain underwent a controversial system-wide upgrade (also called a hard fork), there remains a segment of the bitcoin cash community that follows a new software protocol called Bitcoin Satoshi’s Vision, or BSV.

With the remaining community following a competing implementation of bitcoin cash called Bitcoin Adjustable Blocksize Cap, or ABC, the expectation shortly after the split was that one blockchain would quickly overtake the other.

In part, these expectation were stoked by rumors of an impending “hash war” in which SV proponents would redirect computation energy also called hash power – normally used to mine blocks on a blockchain – to sabotage operations on the ABC chain.

But following the hard fork that led to a split the bitcoin cash blockchain, Craig Wright – the one-time Satoshi Nakamoto claimaint, chief scientist at nChain and one of the leading figureheads for BSV – denied plans of chain attacks, instead calling for a strategy called “persistence hunting.”

He told CoinDesk:

“This is long term. People have got to understand that we are not taking the quick easy path and if they don’t like it that’s too bad.”

Now, nearly one month after the fork occurred, proponents on the SV side, including Wright, are focusing efforts on developing SV’s brand and attracting adoption among users and businesses.

Though on this front, Roger Ver – CEO of bitcoin.com and outspoken supporter for Bitcoin ABC – argued at a CNBC event in Tokyo last week the SV side was still losing.

“The ABC version of bitcoin cash has more hashrate, more exchanges, more wallets, more everything. The BSV coin – I wish them good luck – but it’s a separate project and it’s not bitcoin cash. They have … less everything,” said Ver.

As such, the two coins – while no longer engaged in a battle over sustained computation energy or hash power – are nonetheless in fierce competition with one another to achieve the highest degree of user adoption.

After all, the original vision of bitcoin cash, still championed by Bitcoin ABC and SV supporters alike, is the creation of a global peer-to-peer payments network.

Both see the ultimate use case for their respective cryptocurrencies as a digital form of cash, certain proponents on the Bitcoin SV side even go so far as to say that in the long-run there will exist only one cryptocurrency.

Speaking to CoinDesk, Lorien Gamaroff CEO of BSV wallet Centbee said:

”There will be one bitcoin. I think that all these other coins – all these thousands of them – will disappear and only bitcoin [SV] will survive and that’s bitcoin in its original form.”

A “pro-business” move

Straying from the original design of bitcoin in an important way, bitcoin ABC developers implemented a contentious upgrade five days following the bitcoin cash split.

The changes to the network were two-fold:

  1. Block finalization: The history of blocks on the bitcoin ABC blockchain can only be reorganized – or “reorged” in short – back to ten blocks. This means that transactions featured in a block that has been added to by a minimum of 10 blocks are final. In other words, these transactions cannot be changed even if a longer running version of the ABC chain proposes alternative transaction history.
  2. Reorg threshold: In addition, for a longer running bitcoin ABC chain to reorg even less than ten of the most recent validated blocks, the length of the chain must feature twice as many blocks as the number it seeks to reorg. This means that for an opposing chain to attempt a four block reorg, this chain must present not only five newly rendered blocks but eight.

Outside of preventing a maliciously mined version of the bitcoin ABC blockchain from overtaking the network, this upgrade dubbed “Bitcoin ABC 0.18.5″ poses benefits to businesses and cryptocurrency exchanges operating on the network.

Speaking to CoinDesk, Tanooj Luthra – ex-Coinbase engineer and current CTO for blockchain startup Elph – explained:

“It’s definitely a pro-business, wallets, operations heavy move … If you don’t have some amount of guarantee that a transaction has been finalized how can you ever actually use the currency? How can you actually buy a good with it?”

Viewing the traditional guarantee of “proof-of-work” or the longest running chain as an ideological preference, Luthra explained that in practice reliance on hash power did not hold practicality for smaller cryptocurrencies like bitcoin ABC.

As such, he predicted strengthened support from exchanges and businesses exchanging funds on the network as a result of this upgrade.

To Luthra’s point, three cryptocurrency exchanges – Coinbase, Bitso and Gemini – have since allocated the bitcoin cash ticker symbol “BCH” to the Bitcoin ABC blockchain. They have also additionally refrained from adding support for users looking to trade the Bitcoin SV cryptocurrency citing continued “uncertainty” over its future as in the case of Gemini.

Outside of these three, other exchanges have enabled support to Bitcoin ABC and Bitcoin SV either allocating the bitcoin cash symbol to Bitcoin ABC or differentiating it from Bitcoin SV as “BAB/BCHABC.” These exchanges include but are not limited to: OKEx, Kraken, Poloniex, Bitfinex, and CoinEx.

The makings of ‘sound money’

And though Bitcoin SV is currently unlisted by certain cryptocurrency exchanges, it’s value on the exchanges that do allow SV trading has climbed in recent days to sit almost at par with the ABC coin.

Having grappled over the past week on the five exchanges listed above, bitcoin ABC looks to hold a slight price advantage over the other – both being valued below $100 at the time of publication.

Confident that the SV platform will “ramp up” in profitability over time, Steve Shadders – Bitcoin SV developer and director of solutions and engineering at nChain – told CoinDesk:

“Substantial businesses and organizations have committed to building on the SV blockchain … I’m very confident about the future of bitcoin SV because the businesses that have pledged to support us are the ones that have real sustainable business models.”

Pointing to the official bitcoin SV website, Shadders noted that two dozen cryptocurrency services and ten different wallet applications currently support the nascent blockchain network.

One of these very businesses being Centbee, Gamaroff added that his convictions about the SV blockchain came down to believing in its future as “sound money.”

Rejecting all new and controversial changes to protocol – apart from increases to block size – bitcoin SV supporters like Gamaroff believe in “a fixed protocol set in stone.”

“Every coin out there wants to be sound money but nobody realizes that for it to be sound, it needs to be unchangeable,” said Gamaroff.

Echoing these sentiments, Ryan X Charles CEO of MoneyButton – an online payments tool listed to operate on the SV network – told CoinDesk before the split that the “burden to businesses” of continual changes to the protocol was “well-intentioned but not based on operating a … business.”

At the same time, supporters of ABC like Luthra maintain that changes to the code – as opposed to reducing the stability of a network – are healthy signs indicating prolonged usability.

Speaking to ABC’s most recent upgrade 0.18.5, he told CoinDesk:

“It’s a really good sign that [ABC developers] are trying to get more widespread adoption and make things little bit more usable and little bit more practical.”

Though several businesses, such as CoinText and BitPay, have already announced their support of the new bitcoin ABC network, a full list to indicate the relative number of competing services on ABC has yet to be created.

As such, with the bitcoin cash hash war having come and gone, the renewed battle between these two camps are unlikely to be solved on the basis of hash power any longer. Leaving it up to market forces now to decide the fate of bitcoin ABC and SV, the key question to ask moving forward will be: who is using which network?


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Author: Christine Kim
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A BCASH Civil War Might Actually Be Good For Bitcoin – Here’s Why

The crypto world has seen lots of online exchanges between two rival Bitcoin Cash camps over the last few weeks. However, the real concern is just how much this battle will impact Bitcoin, now that the planned system upgrades or forks have gone live.

The Battle Of The Forks

On one side, you have Craig Wright with BCH Satoshi Vision, and on the side you have Bitmain’s Jihan Wu and Bitcoin.com’s Roger Ver with BCH ABC. BCHSV is conservative in that it wants to keep the network in its original form only meant for financial transactions. On its side, the BCHABC camp wants to upgrade the system to make a modern platform similar to Ethereum that can be used to develop other solutions.

The BCH “Game of Thrones” has been heating up for months. At the moment, Bitcoin Cash ABC seems to be gaining more support, with influential people like John McAfee and Roger Ver throwing their weights behind it. It has also gained favor with Bitstamp, a fairly large crypto exchange. Binance has announced that it will support both BCHABC and BCHSV on its trading and exchange platform.

BCASH ABC Is Prevailing

Besides gaining traction in terms of support, BCHABC has started out well ahead of its rival. Within hours of the fork going live, BCHABC had mined over 50 blocks more than BCHSV. BCHABC mined the first two blocks while BCHSV took the third, pronouncing the official split of the chain.

One of the main reasons for the apparent success of the BCHABC chain is the support it has drawn from Bitmain and Bitcoin.com. Roger Ver mining pool possesses a hash power that’s double the total power of the BCH network.  That makes a great difference especially as Roger Ver announced that the organization will be redirecting its Bitcoin mining power towards mining BCHABC.

A Bullish Twist For Bitcoin

So, how does this BCASH civil war affect Bitcoin as the original chain? It should be remembered that just last year, 2017, BCH was created through a similar fork process from the original Bitcoin network. In fact, the timing was close to this year’s BCH upgrade. Bitcoin’s fork that created BCH happened on 13th November, 2017. BCH’s fork happened on 15th November, 2018.

Before the fork happened on Bitcoin’s network in 2017, the network was down on hash power. Merely days after the fork, BTC’s hash rate sky-rocketed, sending the crypto’s price “mooning” to hit $10,000 by end of the month. By end of December 2017, Bitcoin was trading at upwards of $19,000. In the lead-up to the BCH fork, Bitcoin had started losing hash power as supporters on both sides of the divide redirected their resources, making the BTC network a little clogged up and ultimately affecting its price. In that sense, it’s fairly safe to opine that the current hash rate war between BCHABC and BCHSV could play out in Bitcoin’s favor since whichever side wins will end up stabilizing the network, boosting the total hash rate, and causing a Bitcoin bull run.


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Author: Nick James
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Bitcoin Cash (BCH): 5 Possible Scenarios after Contentious Hard Fork

On November 15, Bitcoin Cash braces for the “hash wars,” essentially an expensive, sustained 51% attack aimed at taking over the coin.

Bitcoin Cash (BCH) is facing a watershed moment given that the first Bitcoin (BTC) hard fork has left the community and miners split over the future direction of the network. This time, however, the attempt to steer the course of the coin would take the form of a 51% attack, testing the understanding for network consensus.

A 51% attack is often viewed as disastrous for the credibility of a coin, allowing miners to alter the distributed ledger, double-spend, or perform other actions on the network. The way the Bitcoin Cash SV version would be implemented is precisely this: sustained mining of an alternative chain. However, the version of Graig Wright will have only 182 nodes to run against 1,103 ABC nodes.

Taking Bitcoin’s history as an example, the nodes signaling their allegiance is a form of consensus. At least in the case of the SegWit2X wars for influence, it was not hashrate but nodes that defined the dominance of one version over the other.

But the attempt to take over Bitcoin Cash is hostile. Here are the possibilities following the switch of 72% of the Bitcoin Cash hashrate to the SV version.

Bitcoin Cash dies: BCH becomes a coin with two separate ledgers, under a constant 51% attack. No one is certain which version would survive. With no replay protection, siding with one version could mean a total loss. Chaos on exchanges ensues. No one can tell how long the hash wars may continue, but, in effect, the supporting sides would mine blocks and receive rewards of an asset that may not exist.

One of the versions capitulates: The hash wars could end if one of the chains raises the white flag. However, it is unknown who would be the arbiter of the winning chain, and both may try to produce “the longer chain.” Exchanges may become arbiters as some are ready to accept one version over the other. There is no timeframe for deciding which chain would be longer, but even one block could suffice. Nodes, however, are not enough to define a version’s dominance in the final analysis. Based on the Bitcoin white paper, the principle of deciding on the version of the blockchain entails both nodes and miners. As it says there, “The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”

Wright has promised a never-ending attack:

Both versions split off: It is possible that two versions of Bitcoin Cash survive. There are different scenarios for this. The supporters of Bitcoin Cash SV seem more adamant about taking over the ticker and posing as “the original Bitcoin Cash.” At the same time, the other version may not admit defeat and may proceed to create a new digital asset. This would be a best-case scenario since holders of BCH could end up owning two types of digital assets, both with a chance to show up on exchanges. It is impossible to predict which version would be deemed more valuable, and the market would decide which the dominant one is.

Bitcoin Cash ABC changes PoW: In case the attack becomes too long and too expensive, the impossibility to save the ABC version by brute force mining may lead to an emergency upgrade. Talks of a possible proof-of-work (PoW) change, in essence making the chain independent, may leave the SV version free to mine the old type of blocks while having no way to take over the ABC version.

Litecoin’s Charlie Lee was skeptical of this scenario:

The SV version gets defeated: Defeat for the Satoshi’s Vision version may come by way of emergency mining from Bitmain. Recently, Roger Ver suggested he may redirect hashing power from the Bitcoin.com mining pooldespite users’ wishes to defend the ABC version. There are also expectations that Bitmain will step up to ensure the stability and continuation of a BCH version. Protecting a stash of one billion coins may be incentive enough for Bitmain to burn money on mining and defend the version of a blockchain.

Hours before the fork, BCHSV, the pre-fork asset, fell toward $167 hours after briefly “flippening” the ABC version. BCHABC trades at above $278. BCH prices plunged to $427 before recovering to $445.88.

The hard fork for the ABC version is expected at 4:40 UTC on November 15, which is also the potential hour for the launch of the “hash wars.”


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Author: Christine Masters
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What Should I Do With My Bitcoin Cash to Prepare for the Hard Fork?

“What should I do with my bitcoin cash (BCH) to prepare for the hard fork on November 15th?” readers have been asking us this past week. Fearful of either losing funds or missing out on potential free tokens of value, they’re wondering what to do with their stash — or whether they should have a stash at all. In this article, we’ll explain some of the options available.

“History never repeats but it often rhymes,” said someone once, in an oft-repeated maxim. And now, over a year since the Bitcoin BTC/Bitcoin Cash BCH hard fork and a year since the aborted BTC hard fork over SegWit2x, history rhymes again. So the best option would be to look over our guides from that time, since the rules are basically the same. Otherwise, read on and we’ll explain specifically your options for the current BCH situation.

Option #1: Do Nothing

What? It’s a hard fork! How can I just do nothing? Well, to be honest, if you don’t hold bitcoin cash or don’t particularly care which protocol software drives its network, this is the best option for you. Bitcoin and other proof-of-work cryptocurrencies are designed to follow the chain with the most computing power, meaning BCH coins are still BCH coins no matter what happens.

Whatever wallet or exchange you’re using, if it supports bitcoin cash now it will most likely still support the main-chain coin after a fork, at least. You may or may not receive extra “free” coins if the chain splits into two surviving assets, but you won’t lose what you already have.

*It’s advisable to not attempt any bitcoin cash transactions around the time the fork is happening, or until the dust has settled after (we can’t say exactly how long that will be). With no “replay protection” built into BCH or a minority-chain forked asset, there are dangers transactions may be broadcast to both networks, and that bad actors may exploit this.

Option #2: Store BCH With Your Own Private Keys

However, our advice is always that your cryptocoins are always safer on a wallet where you control the private keys. In fact, that advice follows for any cryptocurrency, and whether there’s a fork happening or not. This is the way these digital currencies were designed to be used. Any service that “keeps” your assets safe for you is designed to make things simpler for newcomers — but remember, in those cases they own the coins, not you. You’re just trusting them to do it professionally and long-term.

But well-known, major bitcoin services should be trustworthy, right? Ahem.

If you own your own private keys then you’ll still have access to newly-created forked BCH (and anything else) in perpetuity — even if you take no action in the immediate aftermath. We consider this the most versatile option.

It’s possible, even highly likely, there will be no new coin and all BCH mining power consolidates behind the “winning” chain. And even if it doesn’t, you haven’t lost anything you didn’t have before. If you want a shot at grabbing some free money though, here are some other recommendations.

Option #2A: Why Paper Wallets Aren’t Recommended

“Paper Wallet” is a generic term to describe any private/public key combo you generate yourself, and store on something that’s not a computer. They can be on paper, wood, metal, (or Jello if you really want to live dangerously). These typically create a single private/public address in which an infinite amount of cryptocurrency can be stored.

However, while this was often recommended as a safe option in the past, that’s no longer the case. According to the official Bitcoin Wiki, there are several risks to creating your own Bitcoin keys that could result in loss of funds, mistakes, malware that records key creation, and changes to private key format. The same goes for the once-popular concept of “brain wallets”, where holders would remember a password in their heads. Both these options are now regarded as not secure.

Option #2B: Hardware Wallets, Non-Custodial Wallets

Hardware wallets like TrezorLedger or KeepKey are great because you hold your own private keys, but are also able to spend the funds at will. They usually store the keys in a way that puts a secure wall between them and the device they’re connected to, so (in theory) hackers cannot access your keys directly.

“Non-Custodial Wallets” also give you access to your own private keys, meaning the coins are uniquely yours and aren’t stored on a central server. Some of the popular ones that support (today’s) bitcoin cash are Jaxx (and Jaxx Liberty)Edge, Bitcoin.com Wallet, and Coinomi.

Both these wallet types usually generate new private/public keys for every transaction, for security and privacy. The main downside to this option for claiming new coins is, if the wallet software developers don’t provide a “splitting tool” to separate the dominant asset from the newly-created one, you could find yourself searching through every address you’ve ever used on it to see if there are any funds stored there.

Note that hardware wallet manufacturers and non-custodial wallet providers have not given any guarantees they’ll support any new coin other than main-chain BCH, whichever “side” triumphs. They have also advised their users again to not send bitcoin cash transactions until it’s clear what the results of the fork are. Otherwise, they say, existing bitcoin cash balances are safe.

Option #3: Exchanges

Usually we say: never store your coins on an exchange wallet! Why is that? Because exchanges have a long and sad history in cryptocurrency for being hacked and users’ account funds drained. “Mt. Gox” is almost a swear word in Bitcoin these days, and for good reason. Many of its account holders are still millions of dollars in crypto value out of pocket. Even since the BTC fork, the list of exchange hacks has grown:

Now, having said that, there are still reasons why you might want to move your bitcoin cash to an exchange wallet pre-fork. If your exchange has promised to support newly-forked assets, and you trust them to do so, having them on an exchange allows you to trade them quickly. Since new cryptocurrencies have a history of price-pumping hard and then falling, you might want to have them ready to sell as quickly as possible, especially if you shouldn’t be sending BCH around fork time. That’s your choice by the way, not financial advice — we can’t predict what any new coins will (or won’t) be worth in the future.

Note we said “pre-fork”. Move your bitcoin cash to an exchange after the fork and you won’t get any new coins, only the BCH you had before.

Some of the bitcoin cash exchanges that have promised to create balances for new minority-chain BCH versions (some even before the fork) include CoinExPoloniexBinance, Huobi, and OKEx. Coinbase hasn’t decided yet but says a split chain with two coins is “unlikely”. Others, such as Kraken and BitPay, have stated explicitly that they will not support any new coins.

Option #4: Custodial Wallets

In this writer’s opinion, “Custodial Wallets” are for noobs who should not be worrying about hard forks. These services are aimed at those who find the whole concept of “private keys” confusing or difficult, and would prefer someone else hold the funds “safe” for you and far away from your prying hands. Like exchange wallets though, the operators hold your keys and not you — which means they technically (and “technically” is the only law in crypto) own your coins. It’s like buying gold bars and keeping them in a bank vault, except that (a) they’re not banks, and (b) there’s no physical vault for you to rock up with your pitchfork and demand your assets.

But maybe you don’t plan on being a noob forever, and decide at some future date that you do want those forked coins after all. Unless your custodial wallet has supported them and created a new balance for you, they’re gone. You’ll probably still have your original BCH though.

Option #5: Ditch Your BCH Altogether

Once again, this is not financial advice. The decision whether to sell off your BCH stash in fear it and any forked coins will plummet in value, or acquire more in the hope that both will gain value, is entirely yours.

Crypto history can be a rough guide. Bitcoin BTC/BCH is the most famous example of lucrative gains, with the BTC price at press time just under $6,400 USD and BCH worth around $540 (at the time of the August 2017 split, BTC was around $2,900 and BCH didn’t exist). Ethereum ETH/ETC, which split in 2016, is another.

On the other hand, a cryptocurrency project could drive itself and its forked assets into value-oblivion with publicly-warring advocates, unstable blockchains, and loss of confidence outside the community. It doesn’t matter which “side” you supported if there’s no value or adoption anyway.

Bitcoin Cash is already the result of a hard fork. It’s “the real bitcoin” according to its supporters, and “a fraud” to its detractors. This article is not a judgment call on either claim, or on which version of BCH represents “real bitcoin” after a split. Beware of experts who claim to know where the value of any cryptocurrency is headed — this is uncharted territory.

OK… So What Should I Do?

The bottom line is, if you want your best shot at claiming a potential new coin from the split, supporting exchanges are your best option — but check their policy first, and consider the associated risks with exchange wallets.

Holding your own keys in a non-custodial wallet means you’ll have a choice, though the process of actually recovering any new assets could be cumbersome. In the end, option #1 “do nothing” could be the most secure choice.


Source
Author: Jon Southurst 
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