The highly anticipated day has finally come. The whole bitcoin community has been looking forward to August 1 – some with excitement and interest, some with worries. Today, we can witness the creation of Bitcoin Cash – a new cryptocurrency backed by a version of the blockchain that boasts a unique technical roadmap.
Bitcoin Cash will modify the initial bitcoin code increasing the block size and improving scalability. Supporters feel that the creation of alternative cryptocurrency strongly reminds the revolution in the whole crypto society.
“Ninety years ago, the same day, there was a revolution in China. Now today we have another revolution,” said one excited supporter in a project WeChat group. Another one echoes: “The dream of a peer-to-peer digital cash for all the people restarts in a few hours.”
The bitcoin fork can result in the increased market volatility and media confusion impacting users and businesses.
Jimmy Song, bitcoin developer and entrepreneur, explains what Bitcoin Cash is and what consequences it can have for the crypto community.
Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate. It continues the idea of the Bitcoin project but is supplied with upgraded consensus rules that allow it to grow and scale.
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
Here is important information for bitcoin holders.
You will have the same amount of Bitcoin and Bitcoin Cash after the fork if you owned the cryptocurrency prior to 12:20 UTC of August 1, 2017.
However, if you store your Bitcoins via a third party (an exchange, for instance), they may not give you your Bitcoin Cash immediately. They may find it hard to get everything set up in time to be able to give the Bitcoin Cash.
As for now, bitcoin price averages $2,800, Bitcoin Cash – $280. The price has been extremely volatile these days dropping from $2,916 about three hours ago to $2779 right at the moment of writing. Experts link the price fluctuations with the fork.
It seemed that this fork would trigger if BIP148 were able to split the network. Thus, when BIP91 (first part of Segwit2x) locked-in and activated ahead of BIP148 scheduled for August 1, most concluded that it would prevent the so-called user-activated hard fork (UAHF) from triggering.
Besides, some solution for the scaling problem might have been found when BIP91 locked in on Thursday. While Segwit increases transaction capacity, not everyone is satisfied with the way it is done.
It is interesting that technically it is possible to simply raise the limit of 1MB of data per block. However, years of debates within crypto community have not brought the result.
Jimmy Song can’t answer all questions concerning Bitcoin Cash as there are still many uncertainties. But he gives an important recommendation – if you want to gain profit on this situation, you’d better now get your bitcoins off third-party services and control your own private keys.
One of the leading Bitcoin exchanges, Coinbase, announced that it will support the only version of a digital currency ignoring the new Bitcoin Cash created by the split. Once the exchange warned about possible delays in the processing of outgoing BTC transactions up to 12+ hours, it appeared under fire from angry customers.