Bitcoin Cash: reasons, what is hard fork, rate forecast
Bitcoin Cash: what is a hard fork and what will change on November 15th, 2018. Predicting the quotes of both branches after the fork
Dear readers welcome to our financial blog! Tomorrow we expect an interesting event. On November 15, Bitcoin Cash is likely to split into two new branches. The reason for this was the cardinal disagreement between the developers, who were not able to come to a single solution. Opinions were also divided among the miners and stock exchanges, therefore it is difficult to predict the consequences of the fork. In this review, you will read about the nature of the conflict between developers, what awaits investors after the fork, and what are the chances of both new altcoins finding a place under the sun.
What should we expect from the controversial Bitcoin Cash hard fork?
November 15 Bitcoin Cash (BCH) will have a hard fork, which will result in two new Altcoins: Satoshi Vision (SV) and Bitcoin ABC. An active discussion of the upcoming fork has already resulted in a series of disputes, which show that, unlike the first fork, this time, the Bitcoin Cash development team don’t have it all under control. As practice shows, the cryptocurrency goes up before the fork, and this is logical: after the separation, the main altcoin holders receive the same amount of the second alt. In the situation with the BCH, this rule did not work: in the last week, the BCH to USD exchange rate sank by 17% and only on November 13 it partially recovered losses, but remained at the bottom in the red zone.
Can you earn on Bitcoin Cash hard fork?
BCH is a BTC fork that appeared on August 1, 2017 in order to compete with the leader of the cryptocurrency market - Bitcoin. The problem with BTC scaling, which increased the time for conducting transactions, has been brewing for a long time and the BCH tried to solve it, for some reason, still staying on the old PoW protocol, albeit an improved one.
Immediately after the fork, the coin had a drawdown - after the fork, investors immediately sold out the new coin, overflowing into the traditional BTC and other altcoins. And yet, after a while, the BCH was able to gain the attention of investors, eventually consolidating in 4th place.
The policy of BCH developers provides for forks as part of the modernization every 6 months. The first fork was implemented without any problems and, one might say, unnoticed, which cannot be said about the hard fork on November 15. The obstacle was the size of the blocks. While BTC’s block size is 2 MB, BCH’s is 8 MB (before the update), ABC has 32 MB, and Satoshi Vision - 128 MB. Transition of Bitcoin ABC to the same format is impossible since it is not provided by its roadmap, which means that there is only one way out - separation.
There is an interesting situation:
- Bitcoin ABC - the main branch supported by the Bitmain team will continue to develop the basic concept of the BCH.
- Satoshi Vision is a new “revolutionary” branch supported by Craig Wright and his company Nchain, well-known in narrow cryptocurrency circles (his name often appeared next to the “Self-proclaimed Satoshi” scandal).
In fact, BCH is now in the same situation as BTC was in August last year. The question is what branch will the miners and exchanges support now, thereby determining who will remain in 4th place (if anyone). And here opinions are divided:
- Coinbase and OKEx expressed support for the main line of the BCH, Poloniex and Bitfinex intend to support both branches. Huobi and Binance took a wait-and-see attitude, saying that they would support fork bringing the greatest potential liquidity.
- Most pools preferred Satoshi Vision. As of 12.11, 64% of capacity is directed to this branch, while only 18% support the traditional branch.
Meanwhile, a real combat confrontation began between the developers themselves. CEO of Bitcoin.com and an ardent supporter of BCH main branch Roger Ver questioned Craig Wright’s professional competence. In response, Craig Wright reacted contemptuously to Roger's statements, promising, if desired, to derail the BCH quotes to zero.
Such a controversy was the reason that instead of growing on the eve of the fork, the rate of BCH, on the contrary, went down. The cryptocurrency market is sluggish, only one out of four BTC coins show movement. Investors preferred to take a wait-and-see attitude, refusing to increase (and sell) the existing volume of assets. And if even less than a year ago, such activity of the media and the fork itself would be the reason for the growth of quotations, now investors have chosen to get out of the coin - and out of harm's way.
Rate forecast. The two branches are incompatible. Given the differences of developers, this means that the separation of Bitcoin Cash is almost inevitable. But so far no one can make a forecast for the rate. Analysts believe that the situation with the BTC will repeat itself when the main version of cryptocurrency remains afloat (despite the smaller hash rate of miners), and the breakaway branch will first go down with the likelihood of returning to the TOP-10 in the long run. Much will depend on the support of the exchanges, whose role will be to spread and present objective facts and problems about the new branches of the BCH to investors.
I will follow the hard fork on November 15 and will definitely share its results with you in the next review!
If you like my ideas, write “+” and share your own opinion in the comments section
Price chart of BTCUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.