original title:
BCH will have a hard fork at around 9 pm on November 15th. The two sides of the fork are the ABC Development Group (BCHA) and the BCHN Development Group (BCHN). The main difference between the two parties is whether to implement IFP (Miner Donation Development). This fork is relatively low-key, causing many people outside the community to be unclear about what happened, so I wrote this article to introduce it.
1. Why has the exchange rate of BCH to BTC kept falling recently?
Before talking about the fork, let’s talk about the currency price issue that many people are concerned about. The status of BCH in this round of bull market is similar to that of LTC in the previous round of bull market . Both appear as the second currency of BTC. The slogan of LTC is “Bit Gold, Lite Silver” and the slogan of BCH is “True “Bitcoin”, “Cash Bitcoin”, and called the “Prince” by the community. Therefore, the historical trend of LTC’s last bull market has important reference value for BCH .
The interesting thing about LTC’s last round of trends is that the minimum to maximum increase multiple is nearly 3 times that of BTC, but the increase is very uneven
BTC rose by 120 times from the lowest to the highest, and the rate of increase was relatively average (the graph is a logarithmic scale, and a rise of one grid corresponds to a 10-fold increase).
On the other hand, LTC did not increase much in the first half, but it rose retaliatoryly in April to May 2017.
Looking at the exchange rate of LTC to BTC, it will be more obvious. Although the highest point of LTC/BTC has doubled from the beginning of the bull market, it fell by 78% midway . Of course, it only fell against BTC, and it rose from 2.994 to 3.888 against the US dollar. It’s up 30%.
However, from March 30th to May 10th, 2017, LTC/BTC experienced an amazing surge of up to 8 times, because BTC broke through the previous high.
2. Pre-Bull Market vs. Post-Bull Market
According to whether it breaks through the previous high, the bull market can be divided into two stages: “pre-bull market” and “post-bull market” . In the former bull market (including the second half of the bear market), funds are more risk-oriented. It is unknown whether the currency you buy will survive the next bull market, so everyone is more willing to buy BTC that will definitely survive the next round .
And once BTC breaks through the previous high, it means a large influx of newcomers . Because more than 80% of people learned about Bitcoin through the latest bubble in a certain round of bull market, and most of them don’t know much about Bitcoin. Staying in the news “Bitcoin is a scam, a bubble, and Ponzi is about to collapse to zero.”
The brainwashing will continue until the next time Bitcoin breaks through the previous high and creates a new batch of news, and then a batch of people who have heard of Bitcoin at the end of the last bull market will find out: “Huh, Bitcoin is not dead yet? New high? Looks like it should not be a bubble scam?” . As a result, a new round of users flooded Amber with the news of Bitcoin’s repeated record highs, and the wheel of history rolled forward.
As soon as newcomers enter Amber, will they buy Bitcoin? Most of them will not, because they think that Bitcoin is too expensive, and Bitcoin is already ATH (All time high), it is better to buy those plates that are smaller, have more stories, have not reached the previous high, and have increased multiples The bigger mainstream currency, altcoin .
As a result, not only LTC, but also the top 20 currencies have started the main rise, leaving Bitcoin far behind.
3. History repeats itself
I like to talk about history, because history and history are surprisingly similar. Amber is a place where history repeats itself, and even every round of K-line is surprisingly similar .
This is the top 20 decentralized currency by market capitalization (without USDT, platform currency, etc.). This round of the pre-bull market once again repeated BTC’s success. Other currencies remained basically unchanged or rose slightly , and EOS, which fell tragically by 39%.
By the way, my BTC+BCH+ETH combination accurately avoided the top three pits of XRP, EOS, and LTC in market capitalization. I wonder how many people copied homework? If you copy, then your income should now exceed 90% of the people:)
Now the $16,500 BTC is only two daily limit gaps from the previous high of $19891. Once it breaks the previous high, there will be a large influx of newcomers, what do you think they will buy? For example, newcomers to Paypal, do you say that they will buy 0.03 BTC with $500 , or will they buy at least a few ETH BCH LTC?
After the currency price talk, the friends who only care about the currency price can retreat. The previous content is worth at least 300% of the assets doubled at a time . We will talk about some more far-reaching issues later.
4. What is IFP?
IFP is a change proposed by the ABC development team. In IFP, the miners will donate 8% of the theoretical output of the mining block to the development team to solve the problem of the development team’s funding source.
The source of funds for the development team has always been one of the difficult problems for currencies. For example, the Core development team of BTC. In order to solve the source of funds, the main members of Core established Blockstream, a company that relies on the development of side chains for profit. As we all know, when the main chain is not congested, no one will take off their pants and fart to use the side chain. Therefore, Core’s attitude has evolved from accepting limited expansion (such as 2MB) to completely violating Satoshi Nakamoto’s expansion plan and rejecting any expansion , which led to the split of Bitcoin into BTC and BCH, which brought far-reaching disasters to the Bitcoin community. The hidden dangers of BTC’s decline have been buried.
5. Do miners support IFP?
There is a common misconception, the article says BCH miners refused to donate to the development team, but in fact the miners are happy to donate to the development team, not only for BCH better development, there is a more interesting reason: the miners and donations It will not reduce 8% of income, but only about 0.13% of income .
BTC and BCH are both sha256 algorithms, so the two coins actually share a hashing power pool. Miners (especially the machine gun pool) will switch back and forth to mine these two coins, whoever has the highest profit , mines who, so that the two coins have a profit per T Basically the same .
When the output of BCH is reduced by 8%, some miners will not mine BCH and instead mine BTC, which will increase the mining revenue per T of BCH and slightly decrease the mining revenue of BTC. Calculated at the current price of BCH=BTC 1.6%, the final effect is to extract 1.6% (BCH/BTC price) * 8% (donation ratio) = 0.13% of the output from the entire computing power pool. Both BTC and BCH It also reduces mining revenue by 0.13% .
This has almost no impact on the income of BCH miners, and can support the development of BCH, so the miners of the BCH expansion group are happy to make IFP donations.
6. What are the reasons for IFP opponents?
In order to prevent the tragedy of the commons (some miners donate, some miners do not donate and enjoy the benefits), IFP requires all miners to donate uniformly, which makes IFP look like a mandatory tax and further leads to associations such as government and centralization . Therefore, IFP has received a lot of opposition in the foreign BCH community.
Relatively speaking, there are more supporters of IFP in China. Wu Jihan has promoted the implementation of IFP several times before, but all of them failed because of the large number of opponents . The difference between China and foreign countries is mainly due to the fact that Chinese culture recognizes collectivism and collective action . For example, in the new crown epidemic, Europe and the United States pay more attention to the maintenance of individual freedom, while China is more willing to give up certain freedom and obey collective action to contain the epidemic.
By the way, when BCH and BTC were just forked, because Bitmain played a major role during the fork, the small block faction has been discrediting “BCH is Bitmain’s corporate currency”. But in fact, BCH is the result of Bitcoin’s three-year expansion battle, and the production of expansion fork coins is a historical necessity .
Assuming that there is no Bitmain in another time and space, there will also be other forces that fork out of BCH. Conservation is one of the most important theorems of this universe. The idea of large blocks is eternal. As long as Core violates Satoshi Nakamoto’s expansion plan, it will inevitably produce expansion fork coins .
Therefore, Wu Jihan has repeatedly promoted the failure of IFP, which shows that Bitmain has limited influence on BCH. BCH has its strong community supporters and core strength, its own thinking and vitality.
7. How does the support of the two forks compare?
The price of BCHA on CoinEx.com started to fall from 20% of BCH and is now stable at around 5%. Therefore, it can be seen that the community mainly supports BCHN. This fork did not cause a serious split, but was close to a candy coin fork .
The pre-fork transaction on CoinEx.com also made the ABC development team aware of the status quo. ABC is currently in the latest client, named BCHA, and said that it will continue to maintain the two chains of BCH and BCHA.
For ABC, this was the wrong choice. ABC’s development strength is good, but Amaury’s communication skills are weak, and there are misunderstandings with many members of the community, and community support is weak. This time, IFP was forced to be promoted because ABC has always been troubled by insufficient funds.
I am a supporter of IFP, but I think IFP is an icing on the cake. It is good and can speed up the development of BCH, but without BCH, it will be slower. It is not a matter of survival. Therefore, if the community does not agree, I do not agree to forcibly add the fork caused by IFP. This is different from the expansion at that time. If there is no expansion, there will be a user ceiling of 1M block, which will eventually lead to the decline of BTC. I will discuss this at the end.
8. Why does BCH keep forking?
Because BCH is a decentralized currency.
In view of the large number of newcomers recently, we will do a science popularization: technically speaking, blockchain = database + decentralization, and the only value of blockchain lies in decentralization (no center can control, combat, and eliminate) . If there is no decentralization, then the blockchain is a worthless database. With decentralization, the blockchain is worth trillions of dollars. Through decentralization, Bitcoin can be audit-resistant and non-freezing. Free flow, no additional issuance , once there is no decentralization, Bitcoin is not as good as Q coins.
But decentralization means that there is no decision-making center, and community disputes cannot be resolved. Therefore , decentralized currencies will inevitably have forks . Both BTC and ETH have forks. And it can be said conversely that any currency that cannot be forked is not a decentralized currency. It is only data stored in a centralized database and has no value for a long time .
8. Will continuous forks weaken the consensus of BCH?
Consensus is not fundamental, it is fundamentally correct and useful .
Is there a consensus when Satoshi Nakamoto dug the genesis block? Is there a consensus when V God starts ETH?
The development of a coin depends on correctness, usefulness, demand, users, or consensus?
A coin must be useful, demanded, and users in order to generate consensus.
Consensus is the result, not the cause .
Forking is the only way for decentralized coins to resolve community disputes. Some disputes may be resolved when they are forked . For example, in the BCH fork this time, the ABC development team voluntarily abandoned the BCH name and announced that it would continue to maintain BCHA , BCH two chains. Without this showdown and fork, the two parties in the dispute will only continue to entangle and argue and affect the development of BCH.
For some forks, it may take a long time to decide right or wrong . Such a fork seems to split the consensus in a short time, but allows the right direction to develop independently, instead of being trapped in the wrong direction, and finally die in a dead end together . This is like biological evolution. A creature that cannot mutate will eventually die in a dead end. No one can ensure that every choice is correct. Only a fork can ensure Bitcoin .
This fork also solved a problem by the way: what exactly defines Bitcoin? Is the development team? Is it a domain name? Is it a mining pool? Is it an exchange? This time the BCH fork filled in the answer to this question:
Only the community can define Bitcoin, and the price formed by real money can define Bitcoin.
Whoever has a high total market value is the real Bitcoin:)
10. What will happen to the price of BCH after the fork?
As mentioned above, the bifurcation affects the long-term development of a currency, and has little effect on the currency price. It is the bull or bear market that determines the price of the currency.
When the BTC BCH forked for the first time, the market was panicked, and a large number of people felt that the consensus would break down, but what happened? Due to the bull market cycle, the price of the currency has soared after the fork , from $2,855 on August 1, 2017, to $20,000 without a callback.
Why did BCH fall after the second fork? Because the market is in a bear market, it is the consensus of the market that the $6,000 support line cannot be maintained . Or, conversely, if $6,000 is the bottom, the bear market will only fall by 70%, far less than the 93% of the previous two rounds of bear markets And 88%.
So, after the BCH fork, will the long-term BCH currency price rise or fall? High probability rises because:
1. The market is in a bull market cycle.
2. BTC breaks through the previous high (or earlier), similar to the last round of bull market LTC surge, which may happen at any time.
11. In the next ten years, will BTC still have the largest market value?
At this point, the article is already very long, so simply list the facts and expand on the next article.
a. In the last bull market, ETH reached 80% of the total market value of BTC.
B. Melkaft’s law states:
The value of a network is proportional to the square of the number of connected users.
The value of a coin is proportional to the square of the number of active users of the coin, and the number of active users can be estimated by “number of active addresses”.
c. The reason for the soaring of the total market value of ETH is the soaring “number of active addresses” (ICO frenzy), from 23,000 to 190,000.
d. BTC and ETH are now subject to transaction congestion, but the reason for BTC congestion is that they are unwilling to expand, and the reason for ETH is to reach the upper limit of computer hardware performance.
e. ETH 2.0 is doing expansion development (sharding), and BTC is persistently making digital gold. Of course, BTC is also difficult to expand now. Expansion = hard fork = another BCH? It might as well go directly to BCH:)
5. Ethereum developer Evan Van Ness tweeted:
ETH is 50% technology, 30% finance and 20% religion.
BTC is 7% technology, 3% finance and 90% religion.
Make wise choices.
What happens once the number of active users of ETH exceeds BTC?
What will happen once the total market value of ETH exceeds BTC? (After all, the last bull market has reached 80%, only one step away)
What will happen once religious belief is broken?
From the perspective of conservation, without output information entropy, it is impossible to input wealth for a long time.
For those with no brains, have they output information entropy?
In the long run, in the next cycle, or even this cycle,
BTC is likely to be surpassed by ETH first, and then by BCH. In this process, a huge amount of wealth will be transferred to brainless coins. Those who do not want to think will be blood washed.
