Bitcoin Cash (BCH) Surges On Looming Hard Fork

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BCH recently surged on the back of news that Coinbase will support the hard fork backed by Bitcoin ABC, a popular Bitcoin Cash client. Transaction volume has also surged to $471 million for the asset, nearly doubling the levels of volume seen with XRP.

Bitcoin Cash Set to Split in Two

Bitcoin Cash is set to fork on November 15, creating two versions in a contentious fork. One version is backed by Bitcoin ABC, Jihan Wu, and Roger Ver, as well as the “heavy hitter” exchanges Coinbase and Binance.

The other version is backed by Craig Wright, the BitcoinSV client, and the mining startup CoinGeek. Craig Wright has threatened to block the OP_CHECKDATASIGVERIFY protocol, which was proposed by ABC, also known as DSV.

“Any DSV spend will eventually be blacklisted on SV. You support DSV, then, you will have an unspendable coin,” Wright said.

Craig Wright’s version of Bitcoin Cash already has a name: Bitcoin-SV, which uses the ticker symbol BSV. Bitcoin-SV reportedly lacks the replay protection mechanism, setting it apart from previous forks that ultimately originated from the original Bitcoin (BTC) blockchain.

Companies Choose Sides or Remain on Fence

Binance, Coinbase, and Bitcoin.com have chosen in favor of Bitcoin Cash. So far, BitPay has not indicated whether it will support the original chain, but the fact that Roger Ver has a stake in BitPay may be a factor.

Ledger has announced that it will suspend support for Bitcoin Cash until it can determine which fork is the more stable one. While some exchanges such as CoinEx have announced that they will award their users BSV on a 1:1 ratio with their BCH holdings. The growing exchange also recommended that users avoid depositing or withdrawing BSV until its network has stabilized.

Result of Contention in Community

The contentious Bitcoin Cash fork has been caused by a rift in the Bitcoin Cash community. One camp appears to have chosen Roger Ver as their champion, while the competing consortium has secured Craig Wright as their spokesman.

The rift began as a dispute on whether to include DSV, a protocol that can enable oracles and cross-chain atomic contracts. Bitcoin Cash will have DSV, but Bitcoin-SV won’t. Roger Ver made an attempt to settle the dispute with a meeting between supporters of each position in Hong Kong, but this attempt failed when Craig Wright stomped out of the meeting. Wright later blocked Ver on Twitter without explanation or warning.

On his Twitter account, Craig Wright has made a big deal out of the fact that miners can choose which set of rules they want to follow and he may be accurate in this case. Owners of hashing power will have to choose whether they want to support Bitcoin Cash, Bitcoin-SV, or neither.

However, Bitcoin-SV is likely to be harmed by the choice of Binance, Coinbase, Roger Ver’s Bitcoin.com, and Bitcoin ABC to support Bitcoin Cash. Out of pure economics, miners may end up choosing against a fork that does not have widespread support among major companies. Some communities such as Reddit’s /r/btc subreddit have discussed no longer considering Craig Wright as a major influencer.

Which version will win out? It may be likely that investors and miners will stick with the now familiar name of Bitcoin Cash if they are already invested and if Bitcoin Cash keeps support from major exchanges and payment processors like Coinbase, Binance, and BitPay.

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