Why a twelve Word Mnemonic is an Insecure Bitcoin Wallet Backup Rewind back to two thousand ten and the way Bitcoin wallets worked. Users had a wallet.dat file on their computer with their private keys on it. They could optionally add a password to encrypt it. They SHOULD back up the file in case they […]
Bitcoin May Still See a Blockchain Split on August 1st
Even however most Bitcoin users feel that there will be no chain split in the next few weeks, they may be wrong. While the BIP91 lock-in makes SegWit2x and the UAHF compatible, it does nothing to address the Bitcoin ABC issue. This user-activated hard fork will still go into effect on August 1st and seemingly gains more traction every single week. Various exchanges will support this solution come August 1st.
Bitcoin ABC is Still a Major Chain Split Liability
Few people seem to deem Bitcoin ABC an actual threat. While it is true that BIP91 solved most pressing matters on the network, there is still a possibility of a hard fork. It is likely that Bitcoin ABC will be the reason we end up with numerous versions of the Bitcoin blockchain in the future. A user-activated hard fork will certainly create a lot of friction on the network, especially if it gains enough mining power.
It seems ViaBTC will be one entity supporting this concept moving forward. The company will suggest cloud mining contracts using Antminer S9 hardware to actively mine the Bitcoin ABC blockchain on August 1st. Their exchange platform began trading Bitcoin Cash (or BCC) which is the native currency of the user-activated hard fork. This currency can presently be traded against the Chinese Yuan.
As we discussed in a previous article, this solution would cause a network split. Any hard fork of existing code will automatically result in two blockchains, unless the entire mining community abruptly favored Bitcoin ABC over SegWit2x or the UASF. Barring that amazingly unlikely outcome, we will see a chain split in the end. August 1st remains a crucial date for Bitcoin, regardless of which solution one supports at that time.
Bitcoin ABC is designed to present the Bitcoin community with a choice. That choice comes in the form of big blocks and massive on-chain scaling. It will not rely on second-tier solutions such as SegWit, the Lightning Network, or any other future innovation which acts as a Layer two solution. While it is understandable not everyone is in favor of SegWit, a user-activated hard fork to create thicker blocks seems a bit drastic. However, no one will complain about the lack of choices Bitcoin community members have right now.
Bitcoin ABC will never amount to much more than yet another altcoin. Even the exchanges that will support Bitcoin Cash — two platforms so far — will not consider it to be the “real” Bitcoin. Instead, they use the Bitcoin Cash name to indicate that this is clearly an altcoin and not the real deal. Whether or not this “label” will hurt the future of Bitcoin ABC remains to be determined. Considering how BCC can already be traded against the Chinese Yuan, it seems there will always be a market for this fresh currency.
August 1st will still lead to a Bitcoin chain split, by the look of things. Even if Bitcoin ABC were to get a marginal amount of hashpower to support it, the chain would live on regardless. It will be similar to Ethereum and Ethereum Classic, as this hard fork is all about ideological differences. Big blocks are the future, according to some, whereas the rest of the community feels SegWit and the Lightning Network are the right ways forward. Time will tell who is “right,” albeit it is possible that both solutions will coexist for fairly some time.
About The Author
JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world’s leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.