Bitcoin Cash (BCH) holders could be in for free coins, as the prospect of a chain split grows more inevitable by the day.
The coin’s community was split in two in recent months, after its lead developer, Amaury Séchet, announced the insertion of a mandatory 8% miners tax in the BCH code.
Séchet claims the tax will be used to fund the development of Bitcoin Cash without the pressure of securing funding from outside sources. But when the code is implemented during the next network upgrade on November 15, 2020, the large section of the community which disagrees with the tax will reject the upgrade, and form its own blockchain.
Only the chain with the most hashrate will retain the Bitcoin Cash ticker symbol. The loser of the “hash war” will be forced to create a new name and symbol for its newly created coin. So which coin looks like it’s going to win?
Bitcoin Cash Chain Split
Like Bitcoin, Bitcoin Cash has several different node implementations, each of which compete to be the primary one. The winner is decided by miner support (hashrate), as miners signal their intention to support whichever implementation they like best.
The current BCH node implementation is known as Bitcoin Cash ABC, and is led by Amaury Séchet. On August 6, Sechet announced the inclusion of an 8% miners tax in the ABC code, to be implemented during the next network upgrade in November. That means 8% of all mined BCH will go to the ABC development team.
Séchet justified the move by arguing that it would free Bitcoin Cash from being influenced by outside investors. In a Medium post, Séchet wrote:
“Node implementations… have developed a financial reliance on powerful interests such as mining corporations, venture capital funds, and angel investors. Such financial reliance represents a threat to the long-term security of the network.”
However, that didn’t fly with all of the other node implementations in the Bitcoin Cash community, none of which would stand to receive the 8% bounty. One of those nodes, known as BCHN (Bitcoin Cash Node) looks set to become the new BCH chain, after several major miners declared their intention to reject the ABC plan, and support the BCHN node.
To date, 46.5% of the BCH hashrate has signaled its intention to support BCHN, according to independent research sourced via Cash.Dance’s node data. The ABC plan has also been rejected by “Bitcoin Jesus” Roger Ver, a prominent thought-leader in the BCH community, and Executive Chairman of Bitcoin.com.
A Fork of a Fork of a Fork?
Bitcoin Cash was birthed in 2017 after major disagreements in the Bitcoin (BTC) community led to a chain split, and Bitcoin Cash hard forked away from Bitcoin. Come November, the new Bitcoin Cash chain will be hard forked again, meaning we could be faced with the prospect of a fork of a fork of a fork.
Unless Séchet reverses his plan to syphon off 8% of all mined BCH coins, a brief hash war will likely ensue between ABC and BCHN, resulting in two chains – and a new cryptocurrency. Anyone who holds BCH when the code is activated will receive an equal amount of the new cryptocurrency. Whether it will be worth anything is another matter.