Get Our Updates in Your Inbox

Sign up for up-to-date and interesting information and news about bitcoin - delivered hot off the keyboard to your inbox.


Bitcoin Cash Hard Fork: Two Visions To Put To Vote

Liz Louw
24 September 2018

Note to the reader: If you are not familiar with the role of a hard fork as consensus mechanism within the Bitcoin community, make sure you first read our previous blog, Bitcoin Cash Hardfork - Nakamoto (Bitcoin) Principles You Should Grasp.

One week after celebrating the first anniversary of the Bitcoin Cash on the first day of August, one of the network’s developing teams, Bitcoin ABC announced their intention to undertake a technical upgrade of the BCH software code. Soon after, the team published details of some of the protocol changes they wished to make and scheduled their upgrade for 15 November 2018.

As there are dozens of developers from independent groups working on maintaining and innovating the BCH protocol, not all were in agreement with the proposed changes.

Craig Wright, Chief Scientist of nChain for one, came out strongly against Bitcoin ABC’s proposal. He countered by announcing the nChain development team’s competing plan for the November upgrade. Bitcoin SV (Satoshi Vision), as it was named, advocates to restore the BCH network to a full node implementation of the original Bitcoin protocol as described in the Whitepaper. Bitcoin SV represents a significant group of developers and miners (including the Coingeek mining pool) who is concerned about attempts to make ‘unnecessary’ changes to the network. In contrast, Bitcoin SV wishes to align Bitcoin with Satoshi Nakamoto’s original vision without the addition of bells and whistles that detract from this purpose.

These two competing proposals are now on the table. As we dive into the conflicts between the two arguments, however, it is important to look beyond the short-term effects and consider the long-term impact. While the protocol changes put forward by each side are technical of nature, the implications are of huge philosophical significance as they are bound to steer the network onto two widely different futures.

Bitcoin Cash Fork: Bitcoin ABC’s Roadmap

Here comes the technical bit of Bitcoin ABC’s proposal...

Canonical Transaction Ordering, or CTOR

In this transaction ordering rule, transactions are sorted according to given transaction identifiers within a block. According to Bitcoin ABC, changing the current transaction ordering format (topological ordering) to CTOR would eliminate an array of scalability issues for the BCH network and allow it to process very large blocks.

Those leading Bitcoin ABC, such as Amaury Séchet, has promised that several immediate improvements would flow from the change to CTOR. Benefits would include the enablement of compact proofs of transaction inclusion/exclusion which would make chainless apps more capable, as well as giving BCH users a newer degree of control over localising their transaction within blocks.

Addition of New Opcodes, Including OP_CHECKDATASIG

Bitcoin ABC also proposed the implementation of a new opcode (or command), OP_CHECKDATASIG to "enable uses such as the use of permissionless oracles and cross-chain atomic contracts."


The last and most divisive disparity between the competing proposals is the matter of block size; While Bitcoin SV wants to increase the maximum block size to 128 MB in November, Bitcoin ABC holds fast to the current limit of 32 MB.

Bitcoin Cash Fork: Bitcoin SV’s Roadmap

Criticism of Bitcoin ABC proposal

Untested and Unproven

Bitcoin ABC’s explicit argument for the protocol changes and their opposition to Bitcoin SV’s proposal to scale blocks to 128 MB hinges on network efficiency and functionality. At the same time, none of the changes has been tested and proven effective and problem-free.

Secret Benefactors, Undisclosed Interests?

What has remained unaccounted for, is the value that Bitcoin ABC’s proposed update carries for the Wormhole project - a platform that is being co-developed by Bitmain, a Hong Kong-based semiconductor and cryptocurrency mining company. Some have proposed that Bitmain’s CEO, Jihan Wu could even be the secret benefactor behind Bitcoin ABC’s main developer, Amaury Séchet.

For it to work successfully, Wormhole depends on the activation of Bitcoin ABC’s proposed technical upgrade:

  • Wormhole requires 1-minute block propagation,
  • Wormhole requires Canonical Transaction Ordering, in order for it to have numerous competing coins and contracts,
  • To put itself in the best position to compete with (and potentially out-compete) the Bitcoin Cash network, Wormhole requires a block size that is just high enough to allow the use of its own OMNI base, but not large enough to enable BCH to scale and become a global currency itself.

The team behind Wormhole promises that it will propel Bitcoin Cash forward, though it will also steer the network in the direction of becoming a developer’s platform (similar to Ethereum), instead of a borderless cash solution. By implementing the proposed changes, Wormhole would also stand a chance of replacing the Bitcoin Cash network with its own token system.

The ulterior motives that could be behind Bitcoin ABC’s proposal and potential conflict of interest raise a major red flag. Since Bitmain has been one of the most vocal supporters for the Bitcoin ABC upgrade proposal, the theory of an undisclosed relationship between the two deserves to be investigated as it begs the question: are we dealing with an undeclared conflict of interest?


Other red flags pointed out by Craig Wright, chief proponent of the Bitcoin SV proposal, are the fact that implementation of CTOR would prevent 0-confirmation transactions from working, that it would allow non-BCH tokens priority within the Bitcoin Cash network, as well as the numerous flaws with implementing OP_DATASIGVERIFY.

False Promises

Concerning the proposed implementation of OP_DATASIGVERIFY, Bitcoin ABC’s motivation for its implementation hangs on the idea of implementing a permissionless oracle. Wright maintains that no such thing as a permissionless oracle could exist, as an oracle is a server outside of the blockchain which allows for arbitrary conditions to be checked for. Someone must be paid running an oracle and therefore retains control of (permission over) that oracle.

Misaligned Visions

Wright believes that the changes proposed by Bitcoin ABC do not align with the original vision of Satoshi and would litter the network with non-cash transactions. According to Bitcoin SV’s vision, the BCH network’s primary aim is to be the most and sound form of money that is globally used and that turning it into a hub for developers would be counterproductive to this mission.

Bitcoin Cash Fork: Potential Outcomes

Many people are uncertain and nervous about how the hard fork will play out. One thing is certain; Satoshi Nakamoto explained the consensus mechanism in the final section of the Bitcoin whitepaper:

“Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.”

It is, therefore, the miners who will choose which version of software to upgrade to. If Bitcoin SV supporting miners seize a block that uses a protocol that they are not in agreement with they will orphan the block, and if Bitcoin ABC supporting miners see a block over 32 MB then they will orphan that block. The chain with the most support (biggest hash power) will win. If the minority accepts being outvoted, their chain dies of and they rejoin the longest chain.

“What many do not realise is that every time miners choose to run an upgraded piece of software (with different consensus rules), they are actively making a vote change. Usually this happens very seamlessly since most of the small fish, follow the big leads.” Eli Afram, Founder of Bitcoin Cash Australia

The exception is in the case where a minority feels strongly enough in their position (and are convinced that they have adequate user/economic support) to create their own network. While a minority group could split off in such a way, and even create their own ticker, it would be a breach of the Bitcoin consensus code — and the majority could retaliate.

Only time will tell the outcome of the Bitcoin Cash fork but, be assured; we will be keeping you updated on developments through our social channels and this blog.

How to Find the Best Cryptocurrency to Invest In

Learn how to assess the investment potential of cryptocurrency coins and tokens.

Market Advisory Desk
0203 743 2228
OTC Dealing Desk
0203 743 2229