Bitcoin Cash is dead

Hard fork confirmed: Bitcoin Cash (BCH) fires ABC developers

Bitcoin Cash was forked again yesterday. This led to a split in the blockchain, but it is not clear whether the much smaller BAB chain will actually survive. What is clear, however, is that Bitcoin Cash (BCH) will not have a developer fee.

The hard fork of Bitcoin Cash (BCH) took place yesterday. As already reported, the hard fork was controversial.

The previous lead developers of BCH, Bitcoin ABC, have implemented a kind of tax: Eight percent of the miner's income should go to a foundation subordinate to ABC, which will then finance the development. This tax was and is extremely unpopular in the ecosystem, which the community clearly communicated to the ABC developers. But they still wanted to stick to the plans. They apparently hoped that their position as the publisher of the software used by the miners and exchanges for the full node would give them the power to push through such a levy against the resistance of the ecosystem.

That was, as we now know, reaching into the toilet. To be more precise, and based on everything we know so far: The attempt by the ABC developers to impose a levy on the Bitcoin Cash ecosystem has failed so miserably that one cannot even speak of a storm in a water glass. The hard fork went so smoothly that one can rather speak of an upgrade from BCH, in which the ABC developers have just dropped out.

Yesterday afternoon AntPool found block number 661648 with the new control software BCHN (Bitcoin Cash Node). This is a fork of Bitcoin ABC, but without the unpopular tax. Block 661648 activated the new rules, which mainly introduced a new algorithm for adjusting the difficulty, which should ensure a more uniform production of blocks. It is not yet entirely clear whether this succeeded, but my impression is rather less.

There was no attack of any kind by the miners. If Team ABC had hoped that the miners were so eager to pay Amaury Sechet and his co-developers that they deliberately left the community in the dark and then surprisingly turned things around - if someone had such hopes, they would be disappointed. The Chinese miners who initially proposed the levy dropped ABC and mined the coin, which enjoys the support of the community, the exchanges and investors. Their signals were so clear in the run-up to the fork that yesterday it was sensationally surprising.

Bitcoin ABC has already prepared for a chain split and is happy to do without the BCH ticker symbol. According to Caesar, they would rather be the first on a smaller chain that pays developers from Coinbase than the second on Bitcoin Cash. Therefore, ABC also set up a block explorer for the ABC blockchain after it became clear that the established block explorers had little interest in the new chain. And when a miner finally generated an ABC block a good two hours after the fork, and thus also activated the rules of this chain - including the Coinbase reward - ABC and the few remaining followers celebrated this, of course.

But the joy might have been too soon. Because the interest of the miners in plowing the ABC blockchain seems to be limited. While Bitcoin Cash has already arrived at block 661751 - now, shortly before 12 -, i.e. has generated more than 100 blocks in the first 20 hours after the fork, ABC is only at block 661653 - the sixth with the new rules. At this moment this block is five hours old. This means that the blockchain cannot really be considered functional. On the markets where BCH-ABC tokens are traded after the split - or BAB tokens - these are worth around 11 euros. At this price, the ABC developers earn around 5.50 euros per block, which is an income of almost 800 euros a day. You can't necessarily do a lot with that, but at least that's an income for a small group. If the chain stays at this price ...

Blockchair's Nikita Zhavoronkov, one of the early supporters of Bitcoin Cash, is skeptical. He sees a great chance that BCHABC or BAB is stillborn. The hashrate is so low that a single solo miner, not even a very large one, can flood the blockchain with reorganizations. With a reward of less than $ 70 per block, the costs are more than manageable. In addition, only a single miner bothered to mine BAB, and at a loss.

Meanwhile, Bitcoin Cash is celebrating. The investor Marc De Mesel invests even more money in Bitcoin Cash, because the "Fundamentals" are stronger than ever: "The community fires Rent Seekers and Retarders and voluntarily finances many infrastructure and marketing teams."

Media maker Justin Bons calls the fork "an overwhelming win for BCH". They have "removed a lead developer team" that has become "an adversary". This is happening for the first time with a cryptocurrency, so BCH "keeps the legacy of Bitcoin alive."

And Jonald Fyookball, the lead developer of Electron Cash, celebrates the fork on Read.cash. One should not underestimate the performance of the community: "The reigning team (ABC) not only enjoyed the dominance among the miners and exchanges, but also controls the relevant website for Bitcoin Cash". It was a hard-fought victory, "and historically in the sense that it is one of extremely few examples that an established development team has been driven out." The hard fork proves that Bitcoin Cash in particular and cryptocurrencies in general are decentralized; for Bitcoin Cash it suggests “a bright future”. With BCHN and the other development teams, Jonald expects "that they will attract more developers, investors and companies".

We will see. The price of Bitcoin Cash fell with the fork and has now stabilized with manageable losses. Of course, this does not change the general rather sad state of Bitcoin Cash, both in terms of price and the number of users.