Bitcoin Cash (BCH) will inevitably undergo a hard fork on November 15, 2020.
The first signs of a fork appeared in late July this year, when the two main Bitcoin Cash development teams diverged on the implementation of the difficulty adjustment algorithm. After ABC developer Amuary Sechet proposed to implement a difficulty adjustment algorithm called Grasberg, Bitcoin ABC (ABC) and Bitcoin Cash Node (BCHN) fell into a deadlock. And this algorithm is mainly to solve three problems in the BCH network:
1. Consistency of block output
2. Stabilize the miners’ profit margin
3. Reward token output is predictable
The proposal itself is not a direct factor that caused the two parties to turn their faces. But ABC does clearly state that it intends to unilaterally implement this algorithm without the consent of the BCHN team. Soon, the two teams also held a meeting to try to resolve this contradiction.
At first, everyone still hoped to solve the problem when they were calm, but soon, as many participants left the meeting angrily, the meeting changed. ABC also tried to compromise to abandon the Grasberg algorithm and use the Aserti3-2 algorithm, but the overall situation has been determined, and the fork of ABC still occurs.
ABC quickly realized that there would be a fork, so decided to control the BCH network and work hard, and shared their plan to reorganize the coinbase to fund the future development of ABC. This proposal, called IFP (Infrastructure Funding Proposal), attempts to transfer 8% of block rewards from newly mined blocks to the address of ABC to help development. ABC tried to implement this proposal as early as May 15, 2020. Although the network was successfully upgraded at that time, it failed to meet the consensus requirements.
The structural adjustment of block rewards is not a joke, it is a complete change to the incentive mechanism and network security design. Unsurprisingly, the miners did not stand for the new proposal. BCHN (that is, the team that does not use IFP) is currently supported by 84.7% of miners. Not surprisingly, that is, if no major changes are made to the network’s hash rate, BCHN will become the main chain.
To understand the full picture of this reward reconstruction, we must understand Bitcoin and Bitcoin’s fork. Bitcoin does not fork frequently, and developers and fans are reluctant to see any changes in its capacity or anything. Even some upgrades ended in failure. In the eyes of Bitcoiners, any new software or changes to the network will often open new doors for malicious actors and will encounter many unforeseen network failures. This is why people trust the current Bitcoin network (including many of the current parameters such as the supply limit of 21 million tokens, fixed issuance time, etc.), and it will not be easily changed.
For a development team, it is almost unthinkable that it can independently complete the block reward reorganization and then transfer the block reward to the address owned by the central entity. The ABC developer boss, Amuary Sechet, understands this very well, and can reasonably assume that this decision to change the reward structure will lead to a hard fork. After all, the fork was not caused by a single change or proposal. It was caused by the ABC team’s unwillingness to reach a consensus on the improvements proposed by others on the proposal and decided to enforce network changes.
After all, Bitcoin Cash can’t be more familiar with hard forks, and it is the most famous Bitcoin hard fork itself. In terms of market value, he is currently the fifth largest network. The network undergoes an upgrade (that is, a new hard fork) every six months, which was carried out on May 15 and November 15, respectively, opening a window for people to raise objections or upgrade plans. For example, on November 15, 2018, BCH hard-forked Bitcoin Satoshi Vision (BSV). Supporters of this fork hope to increase block capacity and reduce transaction fees.
Most exchanges indicated that they intend to support BCHN as the main chain of BCH, and whether to support ABC depends on the consensus and user needs after the fork. This article provides a complete list of exchanges and their attitudes towards forks.
List of exchanges and attitude towards Nov 15 BCH hard fork
Binance: We will suspend deposits and withdrawals of BCH on November 15, 2020. Based on the snapshot of the first block after 20:00 on November 15, 2020, Hong Kong time, we will airdrop the accounts with BCH assets on Binance Chain and Binance Smart Chain respectively at a ratio of 1:1. A separate announcement will be made when the airdrop is completed. If after the fork, there is no fork coin widely recognized by the community, BCH BEP20/BEP2 will continue to anchor BCH.
Bitgo: We are currently running the BCHN node and will continue to support it as the main chain after the fork. All BCH services will be suspended at 00:00 am UTC on November 15, 2020.
Trezor: We will continue to support the implementation of Bitcoin ABC after the fork, but we will also consider switching to BCHN based on user interests. After the fork, we will not divide the tokens proportionally, so users who want to participate in the fork need to transfer their BCH balance to other wallets.
BitMEX: We will continue to pay attention to the fork, and then decide which one is more suitable for BitMEX support.
Kraken: Regardless of the result of the fork, we will support BCHN and may also support ABC, if their computing power in their network is at least 10% of BCHN. If Kraken supports ABC, we will provide users with an equivalent amount of ABC tokens after the fork to give them a snapshot of the balance in their BCH account at the time of the fork.
Ledger: Ledger will stop BCH services at 7:00 am UTC on November 12, 2020. Then we will pay attention to the activities after the fork and decide which chain to support. Ledger did not set a return time for the BCH service.
FTX: The BCH futures contract in our firm will be settled in a single settlement based on the BCH index of the main chain. Any small BCH chain will not be counted into the BCH index. For the spot market, FTX will suspend deposit and withdrawal at 11:00am on November 15, 2020. If the small chain can maintain a 10% hash rate, FTX will allow users to withdraw money from the small chain based on their balance snapshot at 12:00pm UTC.
Huobi: Huobi will suspend all BCH trading pairs, deposit and withdrawal and loan services before the fork. A screenshot of BCH assets will be taken before the service is stopped to facilitate distribution after the fork. After the fork, Huobi will support both ABC and BCHN.
Bitfinex: Bitfinex will suspend deposits and withdrawals of BCH at 10:00am on November 15, 2020. Bitfinex will take a screenshot of the BCH balance at 12:00 UTC, and the balance will be equivalently mapped in ABC and BCHN.
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