The Creation of Bitcoin Cash
Bitcoin (BTC) recently hard forked in early August due to a dispute amongst its miners. There was a faction who sought to increase block sizes in order to supposedly accommodate more transactions processed on the blockchain. This resulted in the creation of a new blockchain and cryptocurrency called Bitcoin Cash (BCH), which essentially is a replica of Bitcoin’s original codebase and blockchain until the split.
When developers create new clone cryptocurrencies, they typically clone the codebase and not the entire blockchain. However, Bitcoin Cash directly copied Bitcoin’s blockchain, which resulted in every holder of Bitcoin to receive Bitcoin Cash as well. This placed extensive pressure on exchanges, as many were forced to automatically support the new coin. For example, Coinbase originally warned its users in early summer that it would not support the new cryptocurrency, and even told their users to withdrawal all their coins before August 1st – but after extensive backlash from its users, they were forced to reconcile.
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Another Fork Likely
Now, a bit more than six weeks following this hard fork, there are rumors that Bitcoin may fork once again, creating a third clone of the largest cryptocurrency by market cap. Bitcoin early adopter and large investor Roger Ver claimed in an interview on Bloomberg, “there’s probably going to be another split between bitcoin legacy and SegWit2X version of bitcoin but that just gives me more coins that I can sell for the Bitcoin Cash version.”
Due to large increase in popularity Bitcoin has seen, transaction times have skyrocketed. This proposed update, SegWit2x seeks to alleviate this recent surge in transactions on the market. In August, miners agreed to implement the first phase of the proposal, or SegWit. They were expected to increase the blocksize to two megabytes around November in a second phase.
In order to avoid another fork, miners would have to reach an at least 92-percent consensus on supporting the second phase of SegWit2x. Yet, Wang Chun, co-owner and chief administrator of F2Pool, one of the largest mining pools in the world, claims that this is highly unlikely – and many developers agree. Many warn that this fork could be much more disruptive, too.