Bitcoin Cash vs Bitcoin : An impending war?

A battle of epic proportions could be on the horizon within the crypto-sphere, following the news that BitPico, a group of Bitcoin loyalists made up of developers, miners and whales, plan to attack the Bitcoin Cash (BCH) network via a 51% attack.

Initially announced via their twitter feed on 22nd June, BitPico declared their intentions to attack the Bitcoin Cash network by using the stress with the intention to increase the attack over time.

BitPico says the reason for the attack is to establish Bitcoin Cash as being a too centralized blockchain and if it can prove its claims of being transparent about decentralization. The primary focus of all decentralized networks is that they should be vigorous enough to resist such attacks. BitPico feel the Bitcoin Cash network hasn’t been through sufficient tests to confirm this and as such is not able to provide its investors with satisfactory confidence. To be able to exploit the current bear market and accumulate both Bitcoin and Bitcoin Cash, among many other coins, readers can sign up and trade instantly on Huobi Pro.

The group believes they have the required infrastructure in place for an attack of this magnitude to be carried out, stating at the time they controlled as much as 30% of the hashrate, however this bold claim has yet to be verified and it remains to be seen whether BitPico’s latest threats are grounded with correct factual evidence. BitPico claim to

‘have started the attack and expect to have 5000 Bcash attack nodes in roughly 6 weeks and then they will multi-fork the chain’.

In terms of vulnerabilities of the BCH network, they pointed out:

“Our LevelDB stress testing shows that the Bitcoin Cash UTXO database on a complex 32 Megabyte block can require up to 200 Gigabytes of RAM to fully process and if this RAM is not available the UTXO database will become corrupt and if LevelDB doesn’t release the memory the OS will become unresponsive.”

BitPico history

BitPico has earned a valuable reputation within the community for being able to execute stress tests against a variety of platforms. Their preferred choice of attack is to implement an excessive number of requests, commonly known as a Denial-of-service attack (DDoS). The group had previously been a stern proponent of the Bitcoin network scaling solution SegWit2x. This support continued despite a statement from the projects main advocates declaring support had subsided for the fork, owing to a lack of community harmony. The group subsequently threatened to execute the SegWit2x hard fork; however this was never carried out.

There had been silence from the group in recent months, but they were prominent again following March’s announcement that they had developed a framework for an attack on the Lightning Network. Users have complained of lightning nodes crashing and payments temporarily stopped from being made. It must be mentioned however, it’s difficult to gauge how much BitPico is responsible for the attack and how much is the responsibility of other parties.

Bitcoin 101

The origin of Bitcoin is widespread and etched into the history of seminal technological milestones. Invented by the unknown, Satoshi Nakamoto, the identity to this anonymous person or group of people has become one of technology’s most enduring mysteries. Bitcoin was created as a form of electronic cash, the world’s first decentralized digital currency. Bitcoin is given as a reward to a process known as mining and subsequently can be used to pay for certain services and products or exchanged for other currencies. Following its inception, the currency has achieved many important achievements including:

➡️Reaching an all-time high of $19,783.06 on December 17, 2017.

➡️Being introduced as payment methods in major retailers such as Microsoft, Expedia and Shopify.

Bitcoin Forks

Despite the many positives about the Bitcoin protocol, there are still however many miners who believe the protocol can be improved upon in a few very important ways. This train of thought however might not be in concurrent with other miners on the Bitcoin network who are happy with the current dynamics. As such action will then be taken by this certain majority of miners who would like to change the rules.

This is where forks come into relevance. Forking implies any divergence in Blockchain, either temporary or permanent. Forks represent changes to the Bitcoin protocol that makes the previous rules valid or invalid. The forks can be categorized into either a Hard Fork or a Soft Fork.

Hard Fork: This is a permanent divergence from the previous version of the Blockchain and any old software will not be compatible with the new software upgrades introduced to the new network. There is no backward compatibility. Nodes continuing to use the older software will see newer transactions are now invalid. So for the nodes to continue to mine valid blocks, they will need to upgrade to the new rules. Ethereum into Ethereum Classic and Bitcoin into Bitcoin Cash are good examples of hard forks.

Soft Fork: A soft fork takes place when despite a change to the software protocol, it is still backward compatible. This means the new rules can still be interoperable within the protocol. The original chain will continue to adhere to the older rules. Only the miners have to upgrade, users and merchants can continue with the older nodes which will be accepting of the newer blocks. Segwit is a prime example of a Bitcoin soft fork.

Following late 2017 and early 2018, the following Bitcoin forks have either happened or planning to take place:

Bitcoin Gold (BTG)

BitcoinX (BCX)

Bitcoin Hot (BTH)

Bitcoin World (BTW)

Bitcoin Silver (BTCS)

Key differences between Bitcoin and Bitcoin Cash

Despite the vast number of Bitcoin forks that have taken place up to now (95 in total), the most successful of all the forks has been Bitcoin Cash. In 2017, the majority of Bitcoin’s computing power >80%, voted to introduce a soft fork in the form of a new technology called SegWit. It was activated on 23rd August, 2017. SegWit introduced ‘block weight’. This is a mixture of the block size with and without the signature and as such reduced the data that needs to be verified. Each block has a max size of 4mb. SegWit does not allow for an increase in block size limit, that is still 1mb, however it does allow greater number of transactions within the 1mb blocks.

Resistance to SegWit was a key factor in the introduction of Bitcoin Cash, a hard fork of the Bitcoin protocol choosing to implement larger 8mb block size limits instead of a new transaction structure. Bitcoin Cash was introduced due to a concern shared jointly by developers and Bitcoin miners concerning the future of cryptocurrency and its ability to scale effectively. The increase in block size will allow vast acceleration of the verification process.

Other key differences between Bitcoin and Bitcoin Cash include:

➡️Bitcoin Cash will have lower fees when both networks are flooded with transactions.

➡️Many people believe Bitcoin has stopped being a practical cryptocurrency and many users, merchants and business want to abandon Bitcoin and seek a much quicker and cheaper cryptocurrency.

➡️But Bitcoin Cash doesn’t have the same kind of community acceptance to Bitcoin, so there are fewer wallets and exchanges such as supporting Bitcoin Cash, compared to Bitcoin.

➡️Bitcoin also has much greater security and stability, due to the vastly larger mining support and infrastructure it holds.

The future for Bitcoin and Bitcoin Cash

It has been over a full year since Bitcoin Cash was forked and while basically every other Bitcoin fork was a failure, it’s fair to say Bitcoin Cash has been a surprising success. As of right now it’s currently the fourth largest cryptocurrency with a market cap of $12 billion. Each BCH is trading at $700.02. This was preceded by an all-time high of $4355.62 in December 2017. There are currently upgrades being planned or presently being implemented in the Bitcoin Cash protocol. These have the thought of continuing the success of BCH, while even possibly overtaking Bitcoin itself as the prominent Bitcoin related cryptocurrency. Some of the planned upgrades are:

Increase in block size limit. The size limit will be increased from 8mb to 32mb. This will continue to bestow inexpensive and faster transactions.

Further support and compatibility. More and more exchanges such as Huobi Pro are supporting BCH and commonly used wallets such as Trezor, Ledger and Jaxx.

Loyal community. Arguably one of the most vital aspects for a successful cryptocurrency is a loyal and passionate community, especially in this uber-competitive industry. Due to the nature of the transactions of BCH, the currency has fostered a loyal audience base.

Despite the success of Bitcoin Cash, there is no denying that currently and almost certainly for the foreseeable future, Bitcoin will still be the dominant cryptocurrency. While Bitcoin Cash does have some aspects which are currently superior to that of Bitcoin, such as the ease of transactions, Bitcoin will continue to develop its practicality and hold its market share. The implementation of SegWit has been a major success, with the soft fork now accounting for over 40% of all Bitcoin network activity, showing positive sentiment amongst scalability concerns. The success of SegWit has allowed the protocol to efficiently and rapidly clear a backlog of transactions during the beginning of the year and also resulting in consistently lower average confirmation time of fifteen minutes.

Bitcoin currently has by far the highest market cap and hashrate, while easily having the most clout. While it does have slower and more expensive transactions than BCH, these scalability issues are constantly being worked on and new developments being tested, ie the Lightning Network. But most importantly, institutional investor’s interest remains in Bitcoin and this will only help Bitcoin to continually grow and cement its position as market leader.

Huobi Pro supports the buying and trading of both Bitcoin and Bitcoin Cash, all you have to do is sign up using this link and begin instantly. The crypto markets are going through a deep correction at the moment and in my opinion has still not bottomed out. Sign up to Huobi, and accumulate both BTC and BCH, for what I believe will be a market run potentially after September/November.

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Bitcoin Cash vs Bitcoin : An impending war? was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.