Disclaimer: Your capital is at risk. This is not investment advice.
The Bitcoin Cash (BCH-ABC) network underwent a hard fork on 15th November after existing network participants could not reach consensus on an update to the code. The last major fork of BCH was exactly two years prior to this, which created Bitcoin-SV (BSV). Up to this point, ByteTree have continued to track both BCH and BSV, as we try to provide objective data on the ecosystem so that investors and enthusiasts have the tools they need to make their own decisions.
The “upgrade” to BCH on the 15^th^ November created a new fork called BCHN. The contentious fork was the product of a disagreement over the allocations of block rewards to miners. Recall that miners are awarded for the computational work they dedicate to a network, receiving a pay-out in newly generated coins which are native to that protocol which they support. In this instance, a group of Bitcoin Cash developers and miners had proposed an update which redirects 8% of the miners’ rewards to its own development team – an idea that is not new within the ecosystem. Privacy coin, Zcash, had a similar development fund in place for many years.
So who won the disagreement?
Disputes like these are settled with compute power. The version of the network with the most computer power ends up the champion, while the other is a runner up. The runner up can continue to operate as long as the minority continue to support it – however, the first few days are painful with significantly lower hashing power relative to the network difficulty level.
Source: CoinDance. Hashrate of BCHN (green) versus BCH-ABC (orange).
Over 82% of the miners reportedlyexpressed their opposition to the proposal and BCHN resoundingly won the race.
Will exchanges support the BCHN fork?
Exchanges and wallet providers have largely said they plan to support the network which has the majority hash power. Should a competing chain be created, one that allows ABC developers to commandeer an additional 8% of the block rewards, exchanges will likely support both forks.
What is ByteTree’s stance on this?
At ByteTree we try to provide objective data on the ecosystem so that investors and enthusiasts have the tools they need to make their own decisions. With that said, running a node requires significant resources, particularly one that has a large block size such as BCH-ABC. We will temporarily be removing BCH-ABC and BCHN from the ByteTree Terminal until further notice. If you would like access to our data on BCH or BCHN, please send an email to email@example.com with your request.