The latest Bitcoin Cash hard fork was carried out on Thursday the 15th of November. In case you don’t know, Bitcoin Cash carries out two hard forks each year, therefore this is something that the crypto community are now very much used to. The completion of this fork, however, has made way for the development of two new Bitcoin Cash products, Bitcoin ABC and Bitcoin SV.
What is a Hard Fork?
In case you need to recap, according to Investopedia:
“A hard fork as it relates to blockchain technology, is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa). This requires all nodes or users to upgrade to the latest version of the protocol software. Put differently, a hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version. This essentially creates a fork in the blockchain: one path follows the new, upgraded blockchain, and the other path continues along the old path. Generally, after a short period of time, those on the old chain will realize that their version of the blockchain is outdated or irrelevant and quickly upgrade to the latest version.”
The hard fork is now complete, but what we want to do is look into some of the implications of this fork in order to work out what this might mean for the future of Bitcoin Cash.
There is tension between Bitcoin ABC and Bitcoin SV, two camps within the Bitcoin Cash community that have had disagreements about the future of Bitcoin Cash for some months now. With Bitcoin SV in mind, we should explore what this new fork means for them.
This tension has been coined a ‘hash war’ and has seen some speculation surrounding Bitcoin SV’s power in its ability to kill off the Bitcoin Cash blockchain. Now we can’t guarantee that this will happen, however, we should explore the possibility, if indeed it is there.
The true power of Bitcoin SV
Bitcoin SV is led by nChain, which in turn is headed by Craig Wright. Now, according to Coindesk:
“Wright sees the upcoming split in terms of bitcoin’s longest chain rule – the underlying bitcoin consensus mechanism that defaults to the longest chain in the event of multiple blocks being found simultaneously. When applied to a blockchain split, what this means essentially means is a fight to the death between the competing chains, where the last one standing would be considered the ‘true’ bitcoin cash by nodes.”
This fight, is made possible by the fact that in theory, Bitcoin SV should have 51% of Bitcoin Cash’s hash power, this means Bitcoin SV could be in a position to roll out a number of attacks, killing off Bitcoin ABC and allowing Wright and his team to take the title of the original Bitcoin Cash.
As we have stated, we can’t guarantee that this will happen, so try not to panic just yet.
With 51% of the hash power in hand, Bitcoin SV have the ability to carry out fork attacks, to mine empty blocks and to carry out double spend attacks.
This means that hackers could, in theory take advantage of vulnerabilities within the split chain in order to extract funds from exchanges.
Empty Block Mining
Bitcoin SV also in theory exercises the ability to mine empty blocks on the blockchain that do not contain data from transactions. This means other legitimate transactions could be rejected from the blockchain, meaning the entire network is left to sit in a state of limbo.
Due to the 51% majority, Bitcoin SV may also have the power to commit double spend attacks on the blockchain which allows ‘fake’ funds to be generated as a result of malicious behaviour.
What now, really?
Since the hard fork is now complete, we just need to wait and see what happens next. We’d like to think that Bitcoin SV aren’t going to carry out any attacks like this, however thanks to decentralisation, the community is huge and largely anonymous. People who affiliate with Bitcoin SV may feel an urge to exploit some of these vulnerabilities, if this is the case, problems could occur and we could see Bitcoin Cash take on an entirely new direction.
Overall though, we would like to think the entire community can use this latest change to live in harmony and move on together. What we need to do now is watch and wait what happens over the coming days. Investors may want to keep an eye on prices, because some movements are expected and overall, we should all be wary of what might come out of Bitcoin Cash through the rest of this month.
Overall though, everything looks good and Bitcoin Cash remains as promising as ever!