BCH is going to fork again.
On November 15, the BCH network is expected to undergo a hard fork. The two camps that dominate the fork are Bitcoin Cash ABC (BCHABC) and Bitcoin Cash Node (BCHN). Users who held BCH before the fork may get two new assets.
As we all know, BCH completed its first fork in 2018 through a battle of computing power. It is this fork that drags the currency circle into a bear market to a certain extent, and the centralization question behind the hashrate war has also become the focus of heated discussions.
Why does the upcoming second fork start? How do industry insiders interpret? What does this fork mean for investors?
Analysis of the reasons for the second bifurcation of BCH
Like the first fork, this BCH fork also stems from differences in community opinions.
Public information shows that the current technical teams promoting the development of BCH mainly include Bitcoin ABC, Bitcoin Cash Note, and Bitcoin Unlimited. Among them, the mining nodes created by the ABC team have attracted a large number of miners, and 90% of their developers are devoted to technology development. The team’s previous announcement was precisely the fuse of this fork.
According to the announcement, BCH will introduce IFP Coinbase rules in mid-November, and will reward 8% of the blocks to the Bitcoin ABC technical team. Many community members think that this is equivalent to depriving the BCH miners of their income in disguise. The ABC team responded that the team needs financial support to operate, which is not the so-called mandatory miner tax.
However, the ABC team’s move did not eliminate the community divisions. On August 20th, NilacTheGrim, a member of the BCH community, published an article “On Why Amaury Should Abandon His Position” and offered a reward of 0.5 BCH to find someone to translate the article.
The article pointed out, “BCH has no problem in financing infrastructure, but Bitcoin ABC is eager to get an 8% reward because of the low efficiency of Bitcoin ABC. Bitcoin ABC has serious cash flow problems because their operating costs are very expensive. At the same time , Bitcoin ABC chief developer Amuary Sechet regards himself as the god of BCH and believes he deserves better treatment.”
Nevertheless, Bitcoin ABC still chose to stick to the original route. On August 25, the ABC team issued a document saying that the upgrade on November 15 will add IFP Coinbase rules, and block rewards will be distributed to the BCH fund in a certain percentage. The fund is established to ensure the development and maintenance of BCH key infrastructure. Sustainable financial support.
This undoubtedly intensified the conflicts in the community. On September 1, BCH supporter and Bitcoin.com founder Roger Ver tweeted against the IFP Coinbase agreement, stating that “a part of the BCH block reward is used to pay for a development team. This is the vision of a Soviet-style central planner. true”.
Community conflicts cannot be reconciled, and the second fork of BCH becomes inevitable.
How do industry insiders interpret?
In response to the disagreements in the BCH community regarding IFP, Liu Changyong, an early promoter of BCH and initiator of Zhimi University, expressed four points in an interview with Mars Finance:
1. BCH lacks effective governance, it needs a governance mechanism;
2. To start governance, it does need public governance funds;
3. Roger is not completely opposed to taking part of the funds from the block output as a public governance fund. I personally agree with Jiang Zhuoer’s plan;
4. Bitcoin ABC’s current governance fund implementation method has not reached a broad consensus with the community. They decided to write the code without authorization, and will realize the withdrawal of the governance fund on November 15th, and transfer the funds to their control In terms of address, this led most people to object.
Liu Changyong also pointed out that if you want to choose between effective governance and decentralization, decentralization is more important. If decentralization is lost and only effective governance is achieved, it will become a centralized ecology, and BCH will lose its essence and greatest advantage as a decentralized cryptocurrency.
As a supporter of BCHN, Lebit Mining Pool founder Jiang Zhuoer revealed on Weibo: “Currently, the price of BCHN on coinex.com: BCHABC is about 9:1, so there is no suspense. The fork of BCH is resolved. One problem (that BTC cannot solve): the development team & domain name is not BCH, the community is BCH. Even if you are the main development team, you must not violate the consensus of the community, otherwise you will be abandoned by the community. BCH is still evolving. “
At the same time, many practitioners expressed their concerns about the trend of the crypto market. Well-known financial blogger Blockchain William once bluntly said: “I heard that BCH is going to fork again… I can’t help but shudder. Because I remember correctly, the last round of wind and snow that entered the cold winter in 2018 came from The fork of BCH (of course, the big bear trend was already obvious at that time, and it was just an event that triggered it). I hope our worries are superfluous, and it is recommended to engage in forks or something, less nonsense, more pulls, and create wealth for the masses.”
What does it mean for investors?
What does the second bifurcation of BCH mean for ordinary investors?
For now, investors are generally concerned about obtaining airdrops of forked coins. Specifically, if investors hold BCH before the fork, they can get the fork currency airdrop 1:1.
The analysis pointed out that regardless of whether BCH finally forks or not, the technical upgrade in November is an inevitable event. Then the expectation of the fork is good for the secondary market. There will be funds to enter the market for speculation, and there will be people who are eager to get candy This is a relatively clear market opportunity for gold, silver and silver to buy BCH.
This can also be seen from the performance of BCH currency prices. At 6 pm on October 28, OKEx was the first to release a solution for the BCH fork, which will take a snapshot of the BCH account and airdrop it. BCH rose sharply, from 257 US dollars to 276 US dollars, rising by more than 7% in one hour.
At the same time, other second- and third-tier exchanges have also followed up. The second fork of BCH has become one of the biggest hot spots in the near future, and many investors are eagerly waiting.
However, it should be noted that, unlike previous forks, this fork of BCH may not be able to continue due to lack of computing power in a certain chain. In addition, the two chains after the fork cannot determine which chain will inherit the Bitcoin Cash (BCH) name, which will cause market chaos to a certain extent.
In order to welcome the fork, the exchanges have come up with their own response plans, including: select the higher price chain to inherit the BCH naming; take a snapshot of the original BCH account, and 1:1 airdrop after the fork is completed; go online in advance BCHA, BCHN futures.
In general, the strategies adopted by the exchanges to deal with the BCH fork are similar. However, referring to the differences in the previous redemption capabilities of various exchanges, it is recommended that investors first read each announcement carefully, and then choose the first-line mainstream trading platform with strong redemption capabilities.
It is foreseeable that the price of BCH will continue to fluctuate before the fork, and the token price after the fork may also rise and fall quickly. I hereby remind investors to exercise caution and avoid the market fluctuations to the greatest extent. The risks come.
