Online communities tend to go to war over minor differences. Captain Kirk or Captain Picard. Edward versus Jacob. Becca or Lauren. Last year, the cryptocurrency community reached a new milestone with its own civil war: the family squabble between Bitcoin and its largest offshoot, Bitcoin Cash.
The quarrel is bewildering, especially for newcomers. Both sides have staked out nearly identical corners of the Bitcoin space, with one group occupying bitcoin.org, Bitcointalk and/r/Bitcoin, while the Cash upstarts are squatting on the barely-distinguishable territories of bitcoin.com, @bitcoin and /r/btc. It’s like a medieval war of succession, with both princes insisting they’re first in line.
TL;DR: A Tale of Two Bitcoins
Here’s a quick summary, for the next time you want to impress your friends with crypto-lore:
There once was a disagreement within the Bitcoin Community about how to scale up the network to handle more transactions. Instead of resolving the dispute like grownups, on August 1st the community split into two blockchains with different rules. Each address on the Bitcoin(BTC) chain got a mirror image on the Bitcoin(BCH) chain. If you had a Bitcoin before the fork, you had a coin on each chain afterwards.
Ironically, the dispute was caused by Bitcoin’s success. A recap for beginners: According to Bitcoin’s original rules, transactions are to recorded about every ten minutes in a one-megabyte block. Each successful block is then shared throughout the network, so that anyone with a node can maintain a full copy of the ledger, ensuring that the network would remain fast, cheap and decentralized.
At least, that’s how it was supposed to work, but a few years ago it became apparent that one-megabyte blocks would never keep up with the flood of transactions. Too many transactions would mean longer confirmations and higher mining fees— great news for miners, but bad news for everyone else.
Fork Off: How to Not Solve a Problem
Farsighted developers saw the bottleneck coming and had plenty of time to work on finding a solution.
Most core developers favored SegWit, a rule change to squeeze more transaction data into lighter blocks. SegWit would also pave the way for the Lightning Network, an even-more-elaborate bit of digital surgery which is described in more detail here.
On the opposite side, a minority of developers advocated a simpler remedy: bigger blocks. It wouldn’t work as a permanent fix(since the same problem would just reappear later) but it would buy enough breathing space to prepare a more complicated solution.
Normally this kind of dispute would be resolved with some kind of boring boardroom conference followed by a middle-of-the-road compromise. However, this is the Internet, and the argument went the way of all online debates: with mutual excommunications, trolling, shilling, ad hominems and crazy-ass conspiracy theories all around.
It wasn’t hard for either side to find sinister motives on the other side, and nobody came out looking any better. On forums like /r/bitcoin, the Big-block advocates got about as much open discussion as a North Korean election. On the opposing side, SegWit advocates got plenty of ammunition from Roger Ver, the ex-American, ex-Bitcoin multimillionaire(and living counterargument to libertarianism) who was one of the most famous, and unlikeable, advocates for Bitcoin Cash.
Will the Real Bitcoin Please Stand Out?
For traditional Bitcoiners, the prevailing vision was that Bitcoin would be a long-term investment, like gold. High fees were not much ofa worry for people planning to hodl indefinitely. On the Cash side of the fork, the prevailing vision was that bitcoin should be as useful as, well, cash.
The argument has now become which contender is the “real” Bitcoin, with BTC hodlers accusing “Bcash” –anything to avoid calling it “Bitcoin” –of stealing their brand. But the BCH side has a legitimate claim too; after all, Satoshi did not describe “a peer-to-peer system of electronic gold.”
After the fork, spiking fees seemed to uphold the BCH side of the argument. Although SegWit adoption has since brought them back to normal levels, the damage was done: many retailers ditched Bitcoin in favor of Bitcoin Cash or other alts. Even the Bitcoin Conference stopped accepting it.
It’s not yet clear which is the winning side. A bad SegWit bug could turn Bitcoin Cash into “The” Bitcoin, but until now it has yet to really distinguish itself from the crowd of altcoins. On the other hand, a successful Lightning Network(which always seems to be on the horizon, without coming a step closer) could throw Bitcoin Cash and most altcoins into the crypto-dustbin.
Meanwhile, BCH set the precedent for more defections, with later forkings of Bitcoin Gold, Bitcoin Private and the (failed) Bitcoin2x. One thing seems likely–unless core developers can pull a scaling solution out of their hats, there’s plenty more drama ahead.
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