Bitcoin Cash Hard Fork

2022-05-13, 14:31

The disagreement between stakeholders and miners who have voting power in a blockchain network will eventually lead to Hard Fork.

The initial Hard Fork on Bitcoin (BTC) led to Bitcoin Cash (BCH). Bitcoin cash had another Hard Fork that now leads to Bitcoin Satoshi Vision (BSV).

The Hard Fork that led to Bitcoin Cash was expected to add the improvements absent in Bitcoin.

The Hard Fork that led to Bitcoin SV is expected to add the improvements and innovation absent in Bitcoin Cash.

The success of the Hard Fork on Bitcoin cash increased the block size of Bitcoin SV to 128MB.

BSV charges less than 1/5th of a cent due to its improved features.

Even though BSV has successfully added all improvements and scalability features in line with Satoshi's vision, it has not met the records of Bitcoin.

The Blockchain network is decentralized and open-source, and it is easy for blockchain developers, miners, and stakeholders to disagree and split the existing protocol.

The split, disagreement, and failure to reach a consensus on major updates in the blockchain network will lead to Hard Fork. Over the years, Bitcoin has continued to experience Hard Fork.

The first Hard Fork in Bitcoin (BTC) led to Bitcoin Cash (BCH), and recently, another hard fork occurred, leading to the launch of Bitcoin SV.
Every Hard Fork initiated in Bitcoin is said to be driven towards actualizing the visions of Satoshi, the developer of Bitcoin.

Before moving to the details about the latest Hard Fork in Bitcoin, we shall identify the events that led to the first Hard Fork (Bitcoin Cash) and how the First Hard Fork gave birth to the current Hard Fork (Bitcoin SV).

Let's start by identifying the first Hard Fork; Bitcoin Cash.

What Is Bitcoin Cash?

Image: FX Empire

Bitcoin miners, developers, and stakeholders developed Bitcoin cash. These stakeholders felt the need to improve the scalability features of Bitcoin and add more smart features to Bitcoin.

Bitcoin cash is a product of disagreement among Bitcoin stakeholders. The stakeholders agitated for two main improvements in Bitcoin, and the improvements are:

Expand the blocks of data to allow the processing of more information simultaneously.

Make the amounts of data validated in each block smaller to enable faster and cheaper transactions.

The two main solutions will help reduce the transaction fee, reduce the time for processing transactions, and increase the verification processing speed. However, the stakeholders could not reach a consensus on these updates.

Some stakeholders were against the increase in block size because it would lead to expansion in the blockchain network. They believe that the blockchain network will become vulnerable by increasing the block size and making it difficult to host a full node.

The other group of stakeholders supported larger blocks as it would enable faster transactions; however, they fear that the increase in transaction fees that comes with larger blocks will affect BTC in the cryptocurrency market.

The disagreement between these stakeholders led to the split in voting power. This split is called Hard Fork in blockchain technology.

This split led to the first set of stakeholders settling for the Segregated Witness update ( SegWit2X), and the second group of stakeholders formed Bitcoin Cash (BCH).

On August 1, 2017, the launch of Bitcoin Cash was finalized, and it became a digital token. The group that settled for BCH believed that it was a continuation of the vision of Bitcoin’s founder as contained in the whitepaper.

In November 2018, Another hard fork occurred in Bitcoin Cash. This Bitcoin Cash Hardfork led to the launch of another derivation called Bitcoin SV.

What Is The Bitcoin Cash Hard Fork?

Image: XT Nodes

Experts regard the Bitcoin Cash Hard Fork as the third generation of Bitcoin, and it was named Bitcoin SV (BSV).

The nomenclature of “Bitcoin SV” means “Bitcoin Satoshi Vision.” Satoshi Nakamoto is believed to be the founder of Bitcoin, and the launch of Bitcoin is said to be in line with the founder's vision.

The hard fork that led to the launch of BSV was due to the disagreement on whether Bitcoin Cash should upgrade its protocol to accommodate smart contracts or retain its protocol.

Some stakeholders also wanted the block size to increase from 32MB to 128 MB, while others wanted the block size to maintain the 32MB capacity.

These stakeholders could not reach a consensus, and the split was imminent. The split gave birth to Bitcoin SV, immediately listed on the crypto market.

In 2018, the stakeholders, developers, and miners that moved from Bitcoin Cash to form Bitcoin SV shared 17.5 million BSV tokens at a ratio of 1:1. As of November 2021, the market capitalization of BSV had risen to $3.1 billion.

Features Of BSV

Image: VectorStock

These are some of the features of BSV:

The Bitcoin SV token deploys the Proof of Work (POW) consensus protocol. Miners of new blocks in BSV compete to mine and create blocks.

The Bitcoin SV now has an increased block size. The BSV data block capacity is 512 MB, and the BSV blockchain network can process up to 50,000 transactions per second with this block size capacity.

During a live test, it was revealed that the average transaction fee for the Bitcoin SV is 1/50th of a Cent.

According to the developers of Bitcoin SV, they are building the upgrade with no limit. They want to ensure that the Bitcoin SV can process and verify the validity of any number of transactions seamlessly.

In August 2021, the Bitcoin association reported that the BSV network broke an existing record and set a new one. The new record is that the BSV network successfully mined a two-gigabyte data block.

In the same period, the BSV blockchain network was attacked. The “51% attack” gave access to malicious miners who took control of the blockchain’s hash power.

Experts believe that the Bitcoin SV is the closest to Satoshi’s vision of increased block size and low transaction fee features. However, none of these “close visions” can match the achievement of Bitcoin itself.

Conclusion

The first generation of this blockchain network is Bitcoin (BTC) itself. The second generation of BTC is the first hard fork called Bitcoin Cash (BCH). The third generation of BTC was launched due to the Hard Fork on BCH, called the Bitcoin Satoshi Vision (BSV).

There are not many events surrounding the Bitcoin SV since its launch, and the price has continued to fall and rise as expected of a cryptocurrency.

There are speculations that more Hard Forks will occur as new improvements and innovations get introduced to the blockchain technology.

Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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