Bitcoin Cash: Why It's Forking the Blockchain And What That Means
Bitcoin's scaling debate finally seems to be shaking out, but some users aren't happy with the results.After a few years of debate, it was perhaps to be expected that at least some were going to come away empty-handed. Controversial scaling proposal Segwit2x tried to remedy this by joining two code change ideas – the code optimization Segregated Witness (SegWit) and a block size increase.Today, SegWit is just a couple of steps away from activating on bitcoin, but some bitcoin users are unhappy about the outcome.Others who originally backed the Segwit2x proposal appear to be losing confidence in an eventual block size increase and are now taking matters into their own hands by making their own version of bitcoin – and they're doing so on a short timeline.On August 1, at precisely 12:20 UTC, the group claims that they will split off from bitcoin, creating a new cryptocurrency called Bitcoin C
What is Bitcoin Cash?
So, what is it? And how does it differ from bitcoin?There are two main changes of note:
- It increases the block size to 8 MB.
- It removes SegWit, a code change that might activate on the bitcoin blockchain by the end of August.
Some, including a few of the project's supporters, call Bitcoin Cash an "altcoin," a term that usually denotes a fork of the software that creates a new cryptocurrency, with its own market.Indeed, the cryptocurrency is currently trading at $461, meaning it's worth about 18% of bitcoin's current price of $2,568, in an already-open futures market.Unlike other altcoins, though, Bitcoin Cash's transaction history would be the same as bitcoin's – at least up until the point of the split. So, if and when Bitcoin Cash splits off, users would have bitcoin on both blockchains.Another difference is the project says it will support multiple implementations of its software, a move that's not surprising given the criticism that Bitcoin Core's software is too dominant on the bitcoin network.BitcoinABC is the first software to implement the Bitcoin Cash protocol, but the goal is for there to be many implementations.Culianu said that both Bitcoin Unlimited and Bitcoin Classic, other implementations that aim to increase bitcoin’s block size, are working on a version compatible with Bitcoin Cash.These might or might not be ready for August 1.
