Today saw the hard fork of the Bitcoin blockchain, with the world’s oldest cryptocurrency splitting off in two in order to form the world’s youngest cryptocurrency, Bitcoin Cash.
Or did it?
There’s differing reports on whether the new currency, which goes by the acronym BCC, has made its official arrival yet, with some maintaining it has yet to create its first, or “genesis,” block.
Essentially, BCC as a blockchain protocol is active, but its mining takes time. In fact, it could take anywhere from 10 hours to a full day for block 478559 — the first block — to be generated:
“BCC slightly more than 1% of the hashrate of BTC. It would likely only mine one block in 24 hours.” … “diff adjustment within hours”
— Jeff Garzik (@jgarzik) August 1, 2017
— Chris Dark (@Darky999) August 1, 2017
What these tweeters are saying is that there are more computers mining Bitcoin than BCC, so the first BCC block will take a long time to appear. It emphasizes that the new currency has a fraction of the computing power of bitcoin.
BCC was meant to satisfy those in the cryptocurrency who wanted bigger blocks of cryptocurrency, which would allow for greater transaction processing speeds. But BCC might create an even deeper rift in the Bitcoin community. The genesis block will give current Bitcoin holders the equivalent number of BCC tokens, and an BCC token is worth around $300. However, some top exchanges, including Coinbase, continue to refuse to support the new cryptocurrency, meaning Bitcoin holders on those exchanges will not get the BCC tokens and, therefore, will not see any of the value that could be generated by BCC, Brian Roemmele said during the “Around the Coin” podcast last week.
“It’s abundantly obvious that the political arguments over big Bitcoin blocks, small bitcoin blocks — completely irrelevant to the user,” Roemmele said during the podcast, which aired on July 30. “The user cares not what the engine is, the user cares about its interface, and the interface for bitcoin is the wallet.”
At the time of this reporting, bitcoin, or BTC, is trading at $2,718, down about 3%, while BCC is trading at $326, according to ViaBTC.
The hard fork comes after a years-long dispute among core developers and miners regarding scaling efforts to reduce lag on the bitcoin blockchain, with the miners wanting to increase the block size while the developers want to keep the size small. Bitcoin Cash ostensibly raises the size of the block, which should enable more transactions to go forward at a faster pace, if and when blocks are created.
The effect of BCC on the cryptocurrency market could be beneficial in the long run, but might not fix the underlying problems with bitcoin, according to Stefan Thomas, chief technology officer of enterprise blockchain solutions provider Ripple:
The outcome is good for Bitcoin users as it avoids potentially significant losses and market instability. That said, we think this agreement is only kicking the can down the road, because the fundamental governance issues beleaguering Bitcoin haven’t gone away.
Even as early as 2011, it was apparent that as Bitcoin grew, it would become increasingly harder to get buy-in for important technical improvements. The “civil war” isn’t over. The root issue is the conflicting incentives between miners, developers and users of Bitcoin.
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