Academy ⟶ Blockchain

Bitcoin Cash Split 2020 | BCH Hardfork

In order to avoid losing funds, you can split your address Guarda BCH Split functionality and automatically get two separate addresses with current balances.

5 min

Table of Contents

Introduction

Bitcoin ABC client refused the Bitcoin protocol in 2017 to create its own cryptocurrency: Bitcoin Cash. Since then, Bitcoin Cash periodically conducts non-critical network updates, which usually do not affect users; however, in 2018, an update led to a fork, which pointed to the division into two coins: Bitcoin Cash and Bitcoin SV.

On November 15th, 2020, another network dispute may again lead to the appearance of another coin.

This time the community divided into two groups of developers. On the one hand, Bitcoin ABC, which introduced the activation of the “rules of coin receivers”, according to miners must pay developers an 8% tax on remuneration for each new block created to continue funding for network development. On the other hand, the Bitcoin Cash Node (BCHN) group, which rejects the proposal of its rival team and protects the activation of a new algorithm for adjusting the complexity of the mining.

Bitcoin Cash Hardfork 2020

On November 15, the established Bitcoin Cash network may be divided into two:

BCHN and BCHA

Both of these tokens include regularly scheduled upgrades, while BCHA also offers developers a fee for the unit fee paid to the miners.

By the way, BCHN is more prevalent in the community because of its hash power. And BCHA will likely fall into the background when BCHN becomes a leading blockchain. In this case, it will be supported by all currency exchanges which support BCH, and tokens BCHN will still be called “Bitcoin Cash” and will be denoted by the acronym “BCH.”

BCHN vs. BCHA

Long months of stress in anticipation of the fork’s implementation is finally coming to its logical conclusion, and it seems that Bitcoin Cash Node will take the place of the leading token. Bitcoin ABC, the historically dominant implementation of Bitcoin Cash (BCH), appears to be about to give way to a community-led riot in the form of a Bitcoin Cash Node (BCHN).

According to various estimates, over 75% of users signaled in favor of BCHN last week, while a small 1% showed support for ABC.

However, Guarda will support both coins so as not to be controversial in the community, moreover, we will have the split functionality available right after the fork.

Why is the fork needed?

BCHN came in response to ABC’s announcement of a new “monetary base rule,” redirecting 8% of the block’s compensation to a development fund controlled by ABC’s leading developer, Amory Sechet, along with changes in BCH’s complexity algorithm, scheduled for November 15 by the update of Bitcoin Cash. The new release of Bitcoin ABC client number 0.22.1 supports this proposal, and the update will be activated on November 15. This client has 42% Bitcoin Cash nodes. Other clients, including Bitcoin Unlimited and BCHN, do not support the offer; they account for 55% of active nodes.

Proponents of BCHN insist that the rule is not necessary, arguing that they can fund development through voluntary community support. Although Sechet has threatened that “the BCHN chain will be eliminated” if the BCHN chain becomes longer than the BCHN chain after the chain is divided, the current BCHN domain assumes that a competitive implementation will appear dominant on November 15, which represents an uncertain future for ABC.

Does hard-fork include any other protocol changes?

Both Bitcoin ABC and Bitcoin Node have deployed a new complexity adjustment algorithm.

New Bitcoin Cash blocks (for example, Bitcoin blocks) should be detected approximately once every 10 minutes on average. However, because Bitcoin Cash uses the algorithm of marshaling with Bitcoins, some Bitcoins sometimes switch to marshaling Bitcoin Cash when it is more profitable to marshal this blockchain. Since Bitcoin Cash usually has only a small fraction of Bitcoin’s hash power, this switching leads to large fluctuations in Bitcoin Cash hash power. This, in turn, leads to periodic bursts when blocks are detected much faster than every 10 minutes, followed by a jump in complexity. The switched miners then return to Bitcoin mining, leaving the original Bitcoin Cash miners in a chain that is now less profitable. Moreover, a sharp decrease in hash power results in a much slower production speed of blocks.

To help stabilize the block production rate, the Bitcoin ABC team originally proposed a new complexity adjustment algorithm called Grasberg. However, Grasberg will include an additional change: block production will be deliberately slowed down by several years to correct the “historical drift.” (For several reasons, including the previous complexity algorithm, Bitcoin Cash blocks have so far been produced faster than initially planned).

What happens after the BCH Split?

After the hardfork, your address and balance will be duplicated in ABC/BCHN networks. Any transaction will also be duplicated in both Networks. In order to avoid losing funds, you can split your address using Guarda BCH Split functionality and automatically get two separate addresses with current balances.

Split BCH

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