By
Godfrey Benjamin
April 17th, 2024
The Bitcoin Cash (BCH) network saga keeps on rolling with both sides keep on allegating each other. The latest ‘fight’ is going on between Miami-based UnitedCorp on one side, and Bitmain, Kraken exchange and Bitcoin.com CEO Roger Ver on the other.
If it’s to believe the suit, Bitmain and co. conspired to hijack the network with an intent to centralize it, which goes against the core principles of BCH. According to the official press release, the parties are alleged to have taken part in a “well-planned scheme to take control of the Bitcoin Cash network for personal gain and which caused a global capitalization meltdown of the Bitcoin Cash network at the expense of others.“
The suit alleges that the defendants collectively engaged in unfair methods of competition and through a series of unconscionable, deceptive and unfair practices, manipulated the Bitcoin Cash network for their benefit and to the detriment of UnitedCorp and other Bitcoin Cash stakeholders.
The statement says:
“UnitedCorp believes that the defendants colluded to effectively hijack the Bitcoin Cash network after the November 15, 2018 scheduled software update with the intent of centralizing the network – all in violation of the accepted standards and protocols associated with Bitcoin since its inception.”
The suit seeks injunctive relief against the defendants to prevent them from continuing ongoing actions against the Bitcoin Cash network and to prevent them from doing so in the future. It also seeks compensatory damages with a quantum to be determined at trial.
Bitcoin Cash is one of the most important cryptocurrency networks that has been established in recent years. It is used for peer-to-peer electronic cash system between parties on the Bitcoin Cash network which are executed through a network of decentralized public ledgers which confirm and maintain the records of these digital transactions on a blockchain in a highly cryptographic environment.
The BCH hard fork happened on the 15th of November, splitting the community into two main camps: Bitcoin Cash ABC and Bitcoin Cash SV. The defendants of the suit are all major stakeholders of the ABC camp. The two sides have torn into each other on Twitter with Craig Wright, the self-proclaimed Satoshi Nakamoto and leader of the SV camp, calling Roger Ver an “enemy”, who “hates bitcoin.”
The Allegations Keep Piling Up
Once the Bitcoin ABC rule set was established, it became the dominant chain and as the rented hashing was withdrawn, it was no longer contributing to the Bitcoin Cash network. UnitedCorp alleges that the use of computational hashing power did not contribute to the network just prior, and then was withdrawn, shortly after the network upgrade was put in place. The purpose of that, was maintaining an artificially longer chain over the existing rule sets and was amounted to human manipulation for the purpose decentralizing the autonomous network. All of that, says the statement, was orchestrated by a small group of individuals and corporations.
The statement also points out that the integrity and confidence in the network is in part based on this decentralization as well as the operating principle that no single person or entity is able to control the majority of the network.
Since confirmation and recording of transactions on the blockchain is undertaken by “consensus” of network nodes, and since transaction ledgers are continuously being checked against each other, tampering with the ledgers is extremely difficult if not impossible since multiple ledgers would have to be tampered with in the same way and simultaneously.
However if an entity controls more than 51% of a blockchain network, the network becomes susceptible to fraud including reversal of transactions and what is known as “double spending” or spending the same cryptocurrency more than once.
UnitedCorp also alleges that a few days later on November 20th, the ABC development team planted a “poison pill” into the blockchain in the form of a “Deep Reorg Prevention” as well as other functionality in order to cement the control of the blockchain ledger. This intervention allows maintenance of control on future implementations and any related rule sets for future network upgrades.
Benoit Laliberte, President of UnitedCorp said in the statement:
“We are bringing this suit on behalf of UnitedCorp because we believe strongly in the value and integrity of democratic, distributed and decentralized blockchain networks which will become more important with time. In order to maintain confidence in cryptocurrencies such as Bitcoin Cash, no person or entity can be allowed to control them.”
Lawry Trevor-Deutsch, VP of Corporate Affairs at UnitedCorp in a call with MarketWatch, said that it is pretty clear that’s what supposed to be a democratic process was not and that it was hijacked by the ABC camp. He added that it was clear the parties took control of more than 50% of the network during the upgrade.
Roger Ver Still Positive on His Cryptocurrency Outlook
Speaking in an interview with Bloomberg Daybreak: Europe, on Tuesday, Ver touched various aspects of the ongoing crypto debate, including his outlook on cryptocurrencies, the threat of regulation, mainstream adoption and Bitcoin Cash (BCH).
When asked about whether the market had reached a floor in the value of Bitcoin, seeing that the market had dropped almost 80% of its all-time high, Ver said he was unsure as the uncertainty of cryptocurrencies is what makes them exciting.
“Nobody knows, and I think that’s the interesting thing about cryptocurrencies. Nobody knows whether it’s going up, down or sideways.”
He, however, said that while things looked dire in the short-term, the long-term future of Bitcoin remains very bright. Ver went on to state that there are more awareness, attention, and events going on in the crypto ecosystem, and all of these shows that things are looking up.
Just for a reminder, we already wrote about how Craig Wright’s Bitcoin SV hard fork off of BCH didn’t exactly pan out as he wanted and it seems that this coin isn’t really appealing to miners.
When Wright formed an alliance with CoinGeek founder Calvin Ayre to launch a hostile takeover of the Bitcoin Cash (BCH) network, the two men predicted that their BCH implementation, Bitcoin SV (BSV), would quickly accrue near universal support among miners due to its allegedly miner-friendly protocol specifications.
Wright went so far that in his tweet, he warned Bitcoin miners that, if they continue their support for the Roger Ver/Jihan Wu (Bitmain)-backed Bitcoin Cash ABC (BCH) over his Bitcoin Satoshi’s Vision (BSV) project, he would be looking to fund his side of any ensuing ‘hash war’ battle by selling off Bitcoins.
The suit seeks relief against the defendants to stop their alleged sabotage of the BCH network now and in the future. Unsurprisingly, the lawsuit also seeks monetary compensation, the amount of which is to be determined at the trial.