Information Center

Bitcoin VS Bitcoin cash, an inevitable "civil war" broke out

  

At 8:20 p.m. Beijing time yesterday (August 1), digital currency BCC officially started mining, and a "civil war" broke out in the bitcoin industry.

The full name of BCC is "Bitcoin Cash", which is closely related to Bitcoin. The New York Times reported that in the past two years, different factions have been competing fiercely to control Bitcoin and its global computers and support networks. Now, one of the main camps is ready to leave Bitcoin and create a competing version. "Bitcoin cash" is the product of this split.

 Bitcoin cash

After the success of this split, Bitcoin holders before the split will receive the same amount of "Bitcoin cash" for free - convertible into legal tender or other digital currencies, which also means that investors holding Bitcoin may get a "windfall".

Affected by this incident, since 7:00 p.m. yesterday, the price of Bitcoin has plummeted from a high of 19850 yuan in 24 hours to 17750 yuan, a drop of more than 10%. Until this morning, the price of Bitcoin is still hovering around 18000 yuan.

The long brewing "civil war"

This split of Bitcoin is related to its long-term expansion problem.

At the beginning of Nakamoto's Bitcoin design, the Bitcoin block was designed to have an information capacity of 1MB, which was enough at that time. However, with the growing scale of Bitcoin users, 1MB block capacity has been difficult to support Bitcoin network to quickly confirm Bitcoin transactions, and the problem of Bitcoin network congestion often occurs.

As a result, the debate over Bitcoin capacity expansion has arisen. Two expansion ideas, SegWit and Bitcoin Unlimited, have been locked in a stalemate.

The isolation witness advocates not to change the upper limit of the original Bitcoin block capacity, but to adopt the two-layer network approach, first to settle the real-time transactions of Bitcoin on the two-layer network, and then submit the results to the main chain of the Bitcoin blockchain for registration, so as to reduce the workload of the Bitcoin network. Maximize the efficiency of the Bitcoin network without destroying the original structure and security of the Bitcoin blockchain.

In fact, Bitcoin Infinity is a temporary restriction on block size that allows the Bitcoin network to process enough data at one time to improve network efficiency, which is equivalent to a software upgrade. However, critics believe that removing the restrictions on Bitcoin blocks is a very dangerous move, which makes it easier for centralized institutions to access the Bitcoin network. The "decentralized" characteristics claimed by Bitcoin will be threatened.

The New York Times quoted an investor as saying, "The differences between these two different camps may have been too big for them to move forward together." According to Reuters, Bitcoin was almost split two weeks ago, but at that time, the developers and miners of Bitcoin software implemented a "Bitcoin Improvement Plan (BIP 91)" Only when the agreement is reached can Bitcoin avoid the "fate" of being split.

BIP 91 is the first step to upgrade Bitcoin through a software called SegWit2x. Because SegWit2X software can introduce "isolation verification" for the blockchain and transfer some data outside the main Bitcoin network, it can increase its capacity and increase the number of transactions to 2 megabytes. To some extent, this is a victory for the "isolation witness" faction.

However, ViaBTC, a mining giant owned by Bitcoin Mainland, is not satisfied with this scheme. It has prepared another system, which is based on the original chain of Bitcoin, to launch "Bitcoin Cash" and increase the block capacity to 8MB at one go.

Zhu Jiawei, COO of Firecoin, said to the titanium media,

"Bitcoin cash" is a blockchain asset generated by Bitcoin ABC scheme, and its predecessor is Bitcoin. Different from Bitcoin, the new scheme removes the Segwit function in order to keep the protocol stable and simple. It is a technical route for capacity expansion on the chain.

Can BCC challenge BTC?

So, can the "BCC" separated from Bitcoin challenge the position of Bitcoin in the Jianghu?

At present, some well-known trading platforms, including Coinbase in the United States, BitMEX in Hong Kong and Bitstamp in Europe, have said they do not support the new Bitcoin Cash. However, China's top three bitcoin exchanges in terms of transaction volume - OKCoin, Huo Coin and Bitcoin China all said that they would support BCC transactions, and users' bitcoin on the three platforms would also give BCC at a ratio of 1:1.

Zhu Jiawei said that BCC is a new type of blockchain asset and a "new attempt". However, OKCoin's analysts believe that BCC has changed BTC's original technology intention, and its future development has little to do with BTC, so we should not confuse BCC and BTC.

"Bitcoin cash" started trading on Tuesday, and the price fluctuated sharply, once dropping from about $400 to about $242. According to its final stable price, the market value of this digital currency may reach billions of dollars, becoming one of the most valuable virtual currencies.

However, if Bitcoin Cash wants to become a rival to Bitcoin, the digital currency still has a long way to go.