Bitcoin Cash

Last updated

Bitcoin Cash
Bitcoin Cash.png
Denominations
CodeBCH [1]
Precision10−8
Development
Implementation(s) Bitcoin Unlimited
Latest release 1.9.1 / 17 February 2021;3 years ago (2021-02-17) [2]
Development statusActive
Project fork of Bitcoin
Ledger
Ledger start3 January 2009(15 years ago) (2009-01-03) [3] [4] : ch. 35 
Split height#478559 / 1 August 2017(6 years ago) (2017-08-01)
Split from Bitcoin
Split ratio1:1
Timestamping scheme Proof-of-work (partial hash inversion)
Hash function SHA-256
Issuance scheduleInitially BCH 50 per block, halved every 210,000 blocks
Block rewardBCH 6.25 [lower-alpha 1]
Block time10 minutes
Block explorer blockchair.com/bitcoin-cash/blocks
Supply limit21,000,000 [lower-alpha 2]
Website
Website bitcoincash.org [ citation needed ]
  1. ↑ As of April 2020; halved approximately every four years.
  2. ↑ The supply will approach, but never reach, BCH 21 million. Issuance will permanently halt around 2140 at BCH 20,999,999.9769.

Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017. [5] [6]

Contents

In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV. [7]

History

Since its inception, Bitcoin users had maintained a common set of rules for the cryptocurrency. [8] On 21 July 2017, bitcoin miners locked-in a software upgrade referred to as Bitcoin Improvement Proposal (BIP) 91, which meant that the Segregated Witness upgrade would activate at block 477,120. Segwit controversially would enable second layer solutions on Bitcoin such as the Lightning Network. [9] A key difference of opinion between Bitcoin users was over the running of nodes. Bitcoin supporters wanted to keep blocks small so that nodes could be operated with fewer resources, while some large block supporters find it acceptable that (due to large block sizes), nodes might only be run by universities, private companies and nonprofits. [10]

A group of Bitcoin activists, [11] developers [8] , and China-based miners were unhappy with Bitcoin's proposed SegWit improvement plans meant to increase Bitcoin's capacity; these stakeholders pushed forward alternative plans which would increase the block size limit to eight megabytes through a hard fork. [12] [8] [13] Supporters of a block size increase were more committed to an on-chain medium of exchange function. [9]

In June 2017, hardware manufacturer Bitmain, described the would-be hard fork with the increased block size as a "contingency plan", should the Bitcoin community decide to fork implementing SegWit. The first implementation of the software was proposed under the name Bitcoin ABC at a conference that month. In July 2017, mining pool ViaBTC proposed the name Bitcoin Cash. In July 2017 Roger Ver and others stated they felt that adopting BIP 91 (that would later activate SegWit) favored people who wanted to treat Bitcoin as a digital investment rather than as a transactional currency. [8] [13] The fork that created Bitcoin Cash took effect on 1 August 2017. [14] In relation to Bitcoin it is characterized variously as a spin-off, [15] a strand, [16] a product of a hard fork, [17] an offshoot, [18] a clone, [12] a second version [11] or an altcoin.

A Hong Kong newspaper likened this to a new version of word processing software saying: [19]

Bitcoin cash is like a new version of Microsoft Word, which generates documents that can no longer be opened via the older versions.

At the time of the fork anyone owning bitcoin came into possession of the same number of Bitcoin Cash units. [20] [14] The technical difference between Bitcoin Cash and Bitcoin is that Bitcoin Cash allows larger blocks in its blockchain than Bitcoin which, in theory, allows it to process more transactions per second. [21] Bitcoin Cash was the first of the Bitcoin forks, in which software-development teams modified the original Bitcoin computer code and released coins with “Bitcoin" in their names, with "the goal of creating money out of thin air". [22] On 1 August 2017 Bitcoin Cash began trading at about $240, while bitcoin traded at about $2,700. [14] On 20 December 2017 it reached an intraday high of $4,355.62 and then fell 88% to $519.12 on 23 August 2018. [23]

In 2018 Bitcoin Core developer Cory Fields found a bug in the Bitcoin ABC software that would have allowed an attacker to create a block causing a chain split. Fields notified the development team about it, and the bug was fixed. [24]

In November 2020, there was a second contested hard fork where the leading node implementation, BitcoinABC, created BCHA. [25]

Controversy

Controversy

The arguments have devolved over three or four years of bitter debate, the principles are real and they are important to preserve, but a lot of the drama has nothing to do with principles anymore. A lot of this debate is now more about hurt feelings. It’s about bruised egos. It’s about things that were said that can’t be unsaid, insults that were exchanged, and personalities and ego.

Andreas Antonopoulos,"The Verge"

In 2017 there were two factions of Bitcoin supporters: those that supported large blocks and those who preferred small blocks. [21] The Bitcoin Cash faction favors the use of its currency as a medium of exchange for commerce, while the Bitcoin-supporting faction view Bitcoin's primary use as that of a store of value. [21] Bitcoin Cash is sometimes also referred to as Bcash. [26] Bitcoin Cash detractors call the cryptocurrency "Bcash", "Btrash", or "a scam", while its supporters maintain that "it is the pure form of Bitcoin". [21]

Bryan Kelly, a stock analyst likened it to a software upgrade: [27]

Bitcoin cash is doing a “hard fork” or “effectively a software upgrade”, Kelly said on “Fast Money”. “When you do a software upgrade, everybody usually agrees. But in this particular case, everybody is not agreeing.”

Samson Mow of Blockstream pointed to Bitcoin Cash's use of the "Bitcoin" name as a source of animosity between the Bitcoin and Bitcoin Cash camps. [21] Emin Gün Sirer, a professor at Cornell stated that Bitcoin Cash was focused on use and Bitcoin was "enormously" focused on store of value. [21]

Trading and usage

Number of Bitcoin Cash transactions per month (logarithmic scale) BCHtransactions.svg
Number of Bitcoin Cash transactions per month (logarithmic scale)

Bitcoin Cash trades on digital currency exchanges using the Bitcoin Cash name and the BCH currency code for the cryptocurrency. [29] [30] [31] On 26 March 2018, OKEx removed all Bitcoin Cash trading pairs except for BCH/BTC, BCH/ETH and BCH/USDT due to "inadequate liquidity". [15] As of May 2018, daily transaction numbers for Bitcoin Cash are about one-tenth of those of bitcoin. [15] Coinbase listed Bitcoin Cash on 19 December 2017 and the Coinbase platform experienced price abnormalities that led to an insider trading investigation. [32] As of August 2018, Bitcoin Cash payments are supported by payment service providers such as BitPay, Coinify and GoCoin. [33]

Difficulty adjustment algorithm

Bitcoin and Bitcoin Cash both use a proof-of-work algorithm to timestamp every new block. The proof of work algorithm used is the same in both cases. It can be described as a partial inversion of a hash function. Additionally, both Bitcoin and Bitcoin Cash target a new block to be generated every ten minutes on average. The time needed to calculate a new block is influenced by a parameter called the mining difficulty. If the total amount of mining power increases, an increase of the mining difficulty can keep the block time roughly constant. Vice versa, if the mining power decreases, a decrease of the mining difficulty can keep the block time roughly constant. [34]

To keep the block generation time equal to ten minutes on average, both Bitcoin and Bitcoin Cash use an algorithm adjusting the mining difficulty parameter. This algorithm is called the difficulty adjustment algorithm (DAA). Originally, both Bitcoin and Bitcoin Cash used the same difficulty adjustment algorithm, adjusting the mining difficulty parameter every 2016 blocks. Since 1 August 2017, Bitcoin Cash also used an addition to the DAA, called an Emergency Difficulty Adjustment (EDA) algorithm. EDA was used alongside the original DAA and it was designed to decrease the mining difficulty of Bitcoin Cash by 20%, if the time difference between 6 successive blocks was greater than 12 hours. [34]

EDA adjustments caused instabilities in mining difficulty of the Bitcoin Cash system, resulting in Bitcoin Cash being thousands of blocks ahead of Bitcoin. To address the problem with stability, a change of the Bitcoin Cash DAA was implemented and the EDA canceled. The change took effect on 13 November 2017. After the change, the Bitcoin Cash DAA adjusts the mining difficulty after each block. To calculate the difficulty for a new block, the Bitcoin Cash DAA uses a moving window of last 144 blocks. [34]

A group of researchers demonstrated that, as of June 2019, Bitcoin DAA fails to generate new blocks at a constant rate as long as the hash supply is elastic. In contrast to that, the group demonstrated that Bitcoin Cash DAA is stable even when the cryptocurrency price is volatile and the supply of hash power is highly elastic. [35]

2018 split to create Bitcoin SV

Bitcoin SV
Denominations
Symbol₿
CodeBSV
Precision10^-8
Development
Original author(s) Satoshi Nakamoto
Project fork of Bitcoin Cash
Ledger
Timestamping scheme Proof-of-work
Block reward6.25 BSV
Block time10 minutes
Circulating supply18,874,300 BSV (2021-10-20)
Supply limit21,000,000

On 15 November 2018, a hard fork chain split of Bitcoin Cash occurred between two rival factions called Bitcoin Cash and Bitcoin SV. [36] [37] On 15 November 2018 Bitcoin Cash traded at about $289, and Bitcoin SV traded at about $96.50, down from $425.01 on 14 November for the un-split Bitcoin Cash. [38]

The split originated from what was described as a "civil war" in two competing Bitcoin Cash camps. [27] [39] The first camp, supported by entrepreneur Roger Ver and Jihan Wu of Bitmain, promoted the software entitled Bitcoin ABC (short for Adjustable Blocksize Cap), which would maintain the block size at 32  MB. [39] The second camp led by Craig Steven Wright and billionaire Calvin Ayre put forth a competing software version Bitcoin SV, short for "Bitcoin Satoshi Vision", which would increase the block size limit to 128 MB. [36] [39] The Bitcoin SV blockchain is the largest of all Bitcoin forks, exceeding 2.5 terabytes [lower-alpha 1] in size.[ citation needed ]

See also

Number of Bitcoin SV transactions per month (logarithmic scale) BSVtransactions.svg
Number of Bitcoin SV transactions per month (logarithmic scale)

Notes

  1. ↑ The Bitcoin SV blockchain size is 2562.92 GB as of Jan 10 2022, which is 2.56292 TB.[ citation needed ]

Related Research Articles

Proof of work (PoW) is a form of cryptographic proof in which one party proves to others that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with minimal effort on their part. The concept was invented by Moni Naor and Cynthia Dwork in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels. The concept was adapted to digital tokens by Hal Finney in 2004 through the idea of "reusable proof of work" using the 160-bit secure hash algorithm 1 (SHA-1).

Double-spending is a fundamental flaw in a digital cash protocol in which the same single digital token can be spent more than once. Due to the nature of information space, in comparison to physical space, a digital token is inherently almost infinitely duplicable or falsifiable, leading to ownership of said token itself being undefinable unless declared so by a chosen authority. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. Like all increasingly abundant resources, this devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency.

<span class="mw-page-title-main">Bitcoin</span> Decentralized digital currency

Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that requires increasing quantities of electricity and guarantees the security of the bitcoin blockchain.

<span class="mw-page-title-main">Cryptocurrency</span> Digital currency not reliant on a central authority

A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.

Litecoin is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was among the earliest altcoins, starting in October 2011. In technical details, the Litecoin main chain shares a slightly modified Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees, faster transaction confirmations, and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold." In 2022, Litecoin added optional privacy features via soft fork through the MWEB upgrade.

Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work. It is the largest cryptocurrency exchange in the United States in terms of trading volume. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam. In May 2020, Coinbase announced it would shut its San Francisco, California, headquarters and change operations to remote-first, part of a wave of several major tech companies closing headquarters in San Francisco in the wake of the COVID-19 pandemic.

<span class="mw-page-title-main">Primecoin</span> Cryptocurrency based on prime numbers

Primecoin is a cryptocurrency that implements a proof-of-work system that searches for chains of prime numbers.

<span class="mw-page-title-main">History of bitcoin</span>

Bitcoin is a cryptocurrency, a digital asset that uses cryptography to control its creation and management rather than relying on central authorities. Originally designed as a medium of exchange, Bitcoin is now primarily regarded as a store of value. The history of bitcoin started with its invention and implementation by Satoshi Nakamoto, who integrated many existing ideas from the cryptography community. Over the course of bitcoin's history, it has undergone rapid growth to become a significant store of value both on- and offline. From the mid-2010s, some businesses began accepting bitcoin in addition to traditional currencies.

Monero is a cryptocurrency which uses a blockchain with privacy-enhancing technologies to obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading Monero, transaction amounts, address balances, or transaction histories.

Gemini Trust Company, LLC (Gemini) is an American cryptocurrency exchange and custodian bank. It was founded in 2014 by Cameron and Tyler Winklevoss.

<span class="mw-page-title-main">Digital Currency Group</span> American venture capital company

Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Genesis, Grayscale Investments, and Luno. It also formerly owned CoinDesk.

Bitfinex is a cryptocurrency exchange owned and operated by iFinex Inc, and is registered in the British Virgin Islands. Bitfinex was founded in 2012. It was originally a peer-to-peer Bitcoin exchange, and later added support for other cryptocurrencies.

<span class="mw-page-title-main">Ethereum Classic</span> Blockchain computing platform

Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).

<span class="mw-page-title-main">Bitcoin scalability problem</span> Scaling problem in bitcoin processing

The Bitcoin scalability problem refers to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time. It is related to the fact that records in the Bitcoin blockchain are limited in size and frequency.

<span class="mw-page-title-main">Bitcoin Gold</span> Cryptocurrency

Bitcoin Gold (BTG) is a cryptocurrency. It is a hard fork of Bitcoin, the open source cryptocurrency. It is an open source, decentralized digital currency without a central bank or intermediary that can be sent from user to user on the peer-to-peer Bitcoin Gold network.

Jihan Wu is a Chinese billionaire cryptocurrency entrepreneur. Together with Micree Zhan, he co-founded Bitmain in 2013, which has become the world's largest computer chip company for bitcoin mining, with US$2.5 billion in revenue in 2017. He is a leading supporter of Bitcoin Cash, a hard fork of bitcoin created in 2017 with increased transaction capacity. He topped Forbes' 2020 World’s Billionaires List as one of the five youngest billionaires in Asia.

Bitmain Technologies Ltd., is a privately owned company headquartered in Beijing, China, that designs application-specific integrated circuit (ASIC) chips for bitcoin mining.

Tether is a cryptocurrency stablecoin, launched by the company Tether Limited Inc. in 2014. As of January 2024, Tether's website lists fourteen protocols and blockchains on which Tether has been minted.

In blockchain, a fork is defined variously as:

References

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  17. ↑ Orcutt, Mike (14 November 2017). "Bitcoin Cash Had a Big Day, Hinting at a Deep Conflict in the Cryptocurrency Community". MIT Technology Review. Archived from the original on 9 November 2018. Retrieved 7 June 2018.
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  19. ↑ Huang, Zheping (15 November 2018). "Bitcoin cash "hard fork": everything you need to know about the latest cryptocurrency civil war". South China Morning Post. Retrieved 3 August 2019.
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  21. 1 2 3 4 5 6 Jeffries, Adrianne (12 April 2018). "THE ONE TRUE BITCOIN – Inside the struggle between Bitcoin and Bitcoin Cash". The Verge. Retrieved 7 April 2019.
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  23. ↑ Osipovich, Alexander (24 August 2018). "It Was Meant to Be the Better Bitcoin. It's Down Nearly 90%". Wall Street Journal. Retrieved 26 August 2018.
  24. ↑ Evans, John (10 August 2018). "Cryptocurrency insecurity: IOTA, BCash and too many more". Techcrunch. Retrieved 12 August 2018.
  25. ↑ "Bitcoin ABC 0.22.10 Release Notes". 29 December 2020. Retrieved 22 March 2021.
  26. ↑ Bcash Nickname Sources:
  27. 1 2 Clifford, Tyler (14 November 2018). "'Crypto civil war' slams bitcoin, but it won't last, says BKCM's Brian Kelly". CNBC. Retrieved 18 November 2018.
  28. 1 2 "Blockchair". Blockchair.com. Retrieved 13 October 2019.
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  30. ↑ del Castillo, Michael (14 May 2018). "Winklevoss Brothers Bitcoin Exchange Adds Zcash, Litecoin, Bitcoin Cash". Forbes. Retrieved 24 May 2018.
  31. ↑ Decambre, Mark (2 August 2017). "Meet Bitcoin Cash—the new digital-currency that surged 122% in less than a day". MarketWatch. Retrieved 5 June 2018.
  32. ↑ Osipovich, Alexander (20 December 2017). "Coinbase may have given away its own Bitcoin Cash surprise". TechCrunch. Retrieved 2 November 2019.
  33. ↑ Kharif, Olga (20 August 2018). "'Bitcoin Jesus' Is Having a Hard Time Winning Over True Believers". Bloomberg. Retrieved 21 August 2018.
  34. 1 2 3 Aggarwal, Vipul; Tan, Yong (January 2019). "A Structural Analysis of Bitcoin Cash's Emergency Difficulty Adjustment Algorithm". ResearchGate . doi:10.2139/ssrn.3383739. S2CID   214022150.
  35. ↑ Noda, Shunya; Okumura, Kyohei; Hashimoto, Yoshinori (26 June 2019). "A Lucas Critique to the Difficulty Adjustment Algorithm of the Bitcoin System". SSRN. doi:10.2139/ssrn.3410460. S2CID   213032647. SSRN   3410460.
  36. 1 2 Kharif, Olga (17 November 2018). "Bitcoin Cash Clash Is Costing Billions With No End in Sight". Bloomberg. Retrieved 18 November 2018.
  37. ↑ Kharif, Olga (23 November 2018). "Bitcoin Cash Wars End With No Relief for Biggest Cryptocurrency". Bloomberg. Retrieved 7 December 2018.
  38. ↑ Kharif, Olga (15 November 2018). "Bitcoin Cash Fork Hits Investors' Pocketbooks as Two Coins Slip". Bloomberg. Retrieved 18 November 2018.
  39. 1 2 3 Huang, Zheping (15 November 2018). "Bitcoin cash "hard fork": everything you need to know about the latest cryptocurrency civil war". South China Morning Post. Retrieved 18 November 2018.

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