[This story will be updated throughout the day as the situation develops.]
After weeks of chest thumping from one side and stony silence from the other, the “hash wars” began in earnest today. The proponents of the hard fork believe in a more modern, Ethereum-like blockchain (Bitcoin Cash ABC) while the opponents, the Bitcoin Cash SV (“Satoshi’s Vision”) contingent, are willing to fight to the death to ensure the blockchain is used for little more than financial transactions.
The short-term battle will be won through hashrate. This decides who gets to keep the Bitcoin Cash name and BCH price ticker. Essentially, whoever controls the majority hashrate can choose to “orphan blocks”—excluding them from the blockchain—and render the other Bitcoin Cash implementation useless. Currently, 72% of the network’s hashrate supports Bitcoin SV but what matters will be the hashrate at the time of the split. Both sides have pledged more up their sleeves.
This is likely to be a slow, grinding war that will ultimately be decided by developers and the community. If the “hash wars” result in two chains–which seems likely–then the community will be able to choose which one they want to use.
Spectators have already started making bets. On crypto exchange Poloniex, users have been trading the two chains separately. This may gave an indication which one is worth more to investors. But, according to the volume thus far, only $3.8 million has changed hands in the last 24 hours—a drop in the ocean of a $1 billion, market-cap coin. And the early trading shows upstart Bitcoin Cash ABC in the lead, with a current price of $268, versus Bitcoin Cash SV, which is trading at $160. It appears hashrate doesn’t represent the view of traders.
Social media posts are more positive about Bitcoin Cash SV, however. Sentiment analysis company Solume, notes however that SV’s lead has steadily declined over the past few weeks. Adam Shahaf, co-founder at Solume, says there’s negativity surrounding issues such as Bitcoin SV’s hashrate being lower than Bitcoin’s. “Most negativity regarding Bitcoin Cash SV is around their hashpower but the negativity regarding Bitcoin Cash ABC is around speculation they are behind the 51% attack and the notion of them failing.”
Roger Ver, the CEO at Bitcoin.com, who recently sided with Bitcoin Cash ABC after threats were made by Craig Wright, has decided to weaponize his available firepower. The Bitcoin.com mining pool, which he operates, has told its users that hashrate mining Bitcoin (BTC) will be redirected to mine the Bitcoin Cash ABC chain. This could dwarf Bitcoin SV as it has almost double the total hashrate of Bitcoin Cash. Yet this has led to threats of lawsuits on Twitter as miners were not given sufficient notice of the decision, having been told yesterday. Wright weighed in on the debate, saying this move is illegal.
Never one to shy away from controversy, John McAfee, the founder of McAfee Antivirus, has recovered enough from getting a blockchain company’s logo tattooed on his back to get involved. He has sided with Jihan Wu, the co-founder of Bitmain and a staunch Bitcoin Cash ABC supporter. It is unclear what part he will play but has offered, “my sword and my loyalty.” He also criticized Wright on Twitter, arguing that he was foolish to pick this war.
While Bitcoin Cash holders may be worried about the messy situation, or potentially excited about the prospect of doubling their coins, it will provide an interesting test of some of the fundamental principles that Bitcoin was buil upon. Tushar Jain, managing partner at MultiCoinCap, tweeted, “It’s one of the best opportunities to learn about the limits of proof of work & how a proof of work chain behaves when failing in the wild.” Time to get out the popcorn, put Gladiator on in the background and see where this thing goes.
[Update at 14:45 – Wright says the time is almost upon us. He then threatens legal action if he wins but does not reveal what legal action it would be or against who.]
[Update at 16:05 – A star wars themed website has been created which is counting down to the hard fork. It shows the current value of each coin (ABC and SV) and the number of nodes for each implementation of Bitcoin Cash.]
[Update at 16:25 – Nothing has been mined in the last hour except one block which has no transactions in it. Are both sides mining in secret hoping to create a longer chain?]
[Update at 17:50 – Turns out our analysis of Bitcoin.com’s mining pools was right. Roger Ver has used his miner’s Bitcoin (BTC) focused hash rate and directed it at Bitcoin Cash. The mining pool now has a higher hashrate than the entire Bitcoin Cash network yesterday]
[Update at 18:24 – The last common block was mined at height 556766. Now the two protocols are regarding different blocks as valid or invalid. Bitcoin Cash ABC mined the first two blocks, Bitcoin SV the third. The chain has officially split.]