The History of Bitcoin Cash

2019-04-10T13:30:52.000Z Honest Cash

Bitcoin Cash is not Bitcoin. However, its history is also the history of Bitcoin, because until August 1, 2017 were the same cryptocurrency: Bitcoin Cash is Bitcoin's first direct bifurcation. This means that the original code of the first blockchain and its transactions were cloned to a certain point - specifically, up to block number 478,558. From there, a new block chain was created with different rules and, therefore, a new digital currency apart (and not in place) from Bitcoin.

The main Bitcoin Cash offer is written in your name (cash): be a much faster payment method than the original Bitcoin. In order to meet that goal, its developers decided to make a significant increase in the size of the blocks of the original network, going from 1 MB to 8 MB and from there to the current 32 MB.

To understand why exactly this was the option chosen and why a new cryptocurrency had to be created instead of implementing the same measure in Bitcoin, we must review the background that led to that result.

ORIGINS AND HISTORY

Satoshi Nakamoto built the first block chain with 1 MB capacity per block, which would allow only about 7 transactions per second. From the beginning, it was known that this would be a rather temporary capacity because, as more people used the network in these conditions, the speed would decrease and the commissions would skyrocket. And that was exactly what happened.

Already in 2016, the problems of scalability (growth) in Bitcoin were becoming increasingly noticeable. The adoption of the currency began to multiply, bringing as a consequence a significant slowdown in the network. During one of the busiest weeks in its history, tens of thousands of pending transactions were confirmed by confirmation. This resulted in the so-called "commission market": many users had to pay a higher commission amount for the miners, as long as they saw their transaction confirmed as soon as possible. If it was decided to pay the lower amount, it was possible that the transaction would be left on hold for days or not at all. Thus, small transactions became impossible, because each movement could exceed 15 dollars.

Something was more than clear: Bitcoin had to scale, its capabilities had to be improved as soon as possible to be able to continue working with a greater number of users. The whole community agreed on this, but the how did not take long to divide it.

BIGGER OR MORE EFFICIENT BLOCKS

Two groups emerged in 2017 with the same objective, but with different proposals to achieve it: those who wanted to increase the size of the blocks and those who preferred a different alternative, who would improve its operation without increasing its size.

In the first group were the supporters of Bitcoin Unlimited, the organization that maintains the Bitcoin client of the same name, led by the entrepreneur Roger Ver. His proposal was to make a hardfork (hard bifurcation) to eliminate the limit on the size of the blocks: this would be adjusted according to the needs of the network.

The second group was led by the developers of Bitcoin Core, the main Bitcoin client. The solution they presented was Segregated Witness (SegWit), a method through which the signatures of the transactions within the block were relocated, thus optimizing space and allowing a capacity of up to 2 MB. To activate it, you just have to perform a softfork (soft bifurcation), less drastic than a hardfork because it maintains compatibility with previous versions of the Bitcoin client.

However, to carry out any of the two options, as is obligatory in the Bitcoin system, it was necessary to reach a consensus in the community, made up of nodes and miners. The controversy began then.

DIVIDED COMMUNITY

Bitcoin Core developers maintained their position, due, above all, to two factors: the flexible blocks proposed by Unlimited had not been sufficiently tested, therefore, implementing the proposal would not be very secure for the network; and increasing the size of the Bitcoin blocks would lead to greater centralization, since more sophisticated equipment would be needed to support them. That way, a few companies could get to control the cryptocurrency.

On the other hand, from Unlimited they also remained firm, claiming that SegWit would hardly be a temporary and not definitive solution. Everything pointed to a hardfork that divided the network, the miners and the Bitcoin nodes, creating an additional cryptocurrency that would share price, community and credit, as happened with Ethereum.

To avoid that scenario, around 58 companies of the ecosystem, including such important names as Blockchain, Bitmain, Coinbase and Circle, reached a new agreement in May 2017: activate SegWit, but followed by a hardfork that increased the block size to 2 MB. This proposal was SegWit2x and, in the end, it would not be done.

THE BIRTH

In July, perhaps suspecting the result, a group of mainly Asian investors and entrepreneurs led by the exchange house and mining group ViaBTC (being Bitmain the largest investor of that company), decided to carry out an independent hardfork to the community of Bitcoin to create a new cryptocurrency based on the same code, but that would have the substantial differences that the Core team was not allowing.

The first implementation of this protocol, called Bitcoin ABC (by Adjustable Blocksize Cap - Block size adjustable limit), was presented by its main developer, Amaury "Deadal Nix" S├ęchet, during the conference "The Future of Bitcoin" held in Arnhem (Netherlands) at the beginning of July.

This new "version" of Bitcoin would get support from the developer groups of Unlimited and Bitcoin XT, as well as the blockchain development company nChain.

Soon after, on August 1, the hardfork was made and the Bitcoin Cash genesis block was mined at six hours by ViaBTC, with a size of only 1.9 MB, although an initial limit of up to 8 MB was established. Each Bitcoin Cash (BCH) began to be traded at the Kraken, ViaBTC and HitBit exchange houses at an average price of $ 214.38.

Bitcoin was not affected by the event. The only difference their users could notice was that their balance in BTC doubled in BCH. This was due only to the hardfork, which copied the original string. After that date, both cryptocurrencies are obtained and traded separately.

FIGHT FOR THE BITCOIN NAME

Although, from the beginning, Bitcoin Cash was considered an altcoin and was far from competing for miners and nodes with Bitcoin, its developers tried to legitimize it as the "real Bitcoin", and even kept the original White Paper of the first cryptocurrency on your page as if it were Bitcoin Cash.

With the same intention to preserve the name and even the acronym of Bitcoin, in numerous occasions, this site has made clear attempts to assign such credit.

Thus, for example, the controversy occurred when the blockchain explorer available on this page began to refer to the BCH as "Bitcoin" to dry, while the BTC was designated as "Bitcoin Core". In the same way, in a promotion for the purchase of BCH with a credit card, the acronym "BTC" appeared instead of the corresponding one.

Since January 2018, the conflict also included the Twitter account @Bitcoin, one of the most popular of the crypto-core, with more than 600 thousand followers by that date. This account was created in 2011 by someone not identified, and after a break in activity in 2017, began publishing again in early 2018. The problem that many Bitcoin users noticed was that the new publications had a clear inclination for Bitcoin Cash and Bitcoin.com site articles (something that as of December 2018 continues).

As a result, the accusations against Bitcoin.com began about taking over that account to confuse unsuspecting users. Something that was denied from the portal, claiming that, whoever is behind @ Bitcoin, simply changed perspective on which chain to support.

As a result of this controversy and the numerous reports, @Bitcoin was suspended at the beginning of April; although it was reestablished shortly after and now it is still open and publishing about Bitcoin Cash.

The problem did not stop, but continued between April and May, with many users and developers accusing Bitcoin.com and Roger Ver of fraud for trying to seize the name of Bitcoin, to the point of getting organized to prepare a lawsuit with more of 1,100 supporters.

Only in the face of such threat, the deceptive data was removed from Bitcoin.com. But, since it can not be proven that @Bitcoin is under the control of this portal, the changes in that account were non-existent.

Despite everything that happened, an article entitled "Why Bitcoin Cash is Bitcoin" appeared in Bitcoin.com in September 2018, which summarizes a presentation by Roger Ver and lists certain qualities that, in his opinion, are "things that make Bitcoin, Bitcoin. " These are to be a user-to-user electronic cash system, low rates, fast payments, reliable payments, scalable chain, non-reversible payments, chain of digital signatures, operating codes enabled, SHA-256 algorithm and being the longest chain, with the greatest proof of work.

According to this article, the BTC would only fulfill two of those characteristics, while the BCH would only lack the last one. At least, highly debatable, and, at best, totally wrong.

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