Tuesday morning saw the end of overall excitement that overtook crypto community recently and the beginning of new crypto era. The bitcoin network was officially forked into two separate blockchains creating two cryptocurrencies – Bitcoin and Bitcoin Cash.
Just six hours after bitcoin split, miners created the first block 478559 on the alternative blockchain. The block sized 1915175 Bytes or 1.9 MB was mined by the Chinese mining pool ViaBTC. The first Bitcoin Cash block contained 6,985 transactions. As a reminder, traditional bitcoin block size is 1 MB and it is capable of processing 3,000 transactions.
Experts predict rather volatile time for cryptocurrencies. Yesterday, Bitcoin Cash surged to $422 just after the first block was mined. Afterwards it dropped to $383. Right at the moment of writing, the newly cryptocurrency is priced at $433.
“We are in a new paradigm,” Quinn-Watson, a venture partner for a bitcoin exchange operator based in Australia, says. “People have been asking a lot of questions and we expect a lot of volatility.”
He is certain that the madness about Bitcoin Cash is just at its beginning. “We literally just re-opened the bitcoin exchange and are confirming the BCC trades over the course of the day,” he said. “We are receiving a lot of off market orders for bitcoin cash – they’re exploding!”
Basically, Bitcoin Cash resembles traditional platform but features increased capacity. In general, there are three primary features Bitcoin Cash offers:
- increased block size of 8MB
- replay and wipeout protection
- way to adjust the proof-of-work difficulty quicker than the normal 2016 block difficulty adjustment interval found in Bitcoin
“People are selling their bitcoin positions and buying bitcoin cash as a proposition that it is the ‘new coin’ that has more value in the future,” Quinn-Watson states. “It’s a bit speculative.”
Multiple exchanges including Kraken Exchange, OKCoin, ViaBTC and Huobi announced their support for Bitcoin Cash. However, Coinbase, the world’s largest and often highest-rated Bitcoin exchange, refused to support the split. The exchange informed its customers about delays in the processing of outgoing BTC transactions by up to 12+ hours causing dissatisfaction of customers.
“Bitcoin scaling has been a complicated issue for the past few years, so it’s nice to see forward progress, even the situation is a bit sloppy,” said ZenCash co-founder, Rob Viglione. “The downside of the split is that Bitcoin loses part of its ecosystem, and network effects are so important to this industry. That said, this isn’t zero-sum game and it’s more than possible to see both chains flourish in parallel.”
It is interesting that technically it was possible to simply raise the limit of 1MB of data per block. However, years of debates within crypto community have not brought the result.