The Bitcoin Cash network has undergone a hard fork, resulting in the creation of two new blockchains
The Bitcoin Cash network has undergone a hard fork, with the parent blockchain now splitting to give way to two new blockchains. Following the hard fork, the Bitcoin Cash network gave birth to the Bitcoin Cash ABC (BCH ABC) and Bitcoin Cash Node (BCHN).
According to data from Coin.Dance, the Bitcoin Cash Node appears to be the dominant software as it accounts for 57 of the 63 blocks already mined. Bitcoin Cash ABC is the lower software, accounting for only six blocks so far.
Bitcoin Cash came about because of the hard fork of the original Bitcoin network. The Bitcoin Cash network saw its last block mined yesterday. Bitmex Research tweeted that “Bitcoin Cash: The last common block between the BCHN & BCHA networks has now been mined. The chains may now split”.
Binance mined the last common Bitcoin Cash block while AntPool mined the block that split the network. Since the split, the Bitcoin Cash Node has been getting most of the network’s hashpower as miners have mined more blocks on the network than on the Bitcoin Cash ABC network. Before the split, over 80% of the miners threw their weight behind the Bitcoin Cash Node network.
Why the hard fork?
The hard fork of the BCH network came about following a proposal by a group of developers led by Amaury Sechet. In their proposal, the developers wanted to update the network to include a controversial new “Coinbase Rule”. This rule wants 8% of all mined BCH to be redistributed to BCH ABC to support protocol development.
However, another group of Bitcoin Cash developers (Bitcoin Cash Node) opposed the proposal and removed the Coinbase Rule from the network’s source code. A hard fork occurs when some nodes on a network implement a change while others don’t. The implementation of the new changes led to the creation of the old and new software on the Bitcoin Cash network.
Hard fork already having effects
The splitting of the Bitcoin Cash network is already affecting investors and other network participants. Grayscale Investments’ Bitcoin Cash Trust lost $1.6 million following the announcement that Bitcoin Cash was forked into two new cryptocurrencies. Other network participants could similarly be affected, and some investors might move their funds to other cryptocurrencies like Bitcoin and Ethereum until the new Bitcoin Cash networks stabilise.