Yesterday Bitcoin and Ethereum hit new all time highs in “realized” value. While we people in the crypto sphere should be able celebrate a party crashes had to kill the mood. That party crasher you might wonder? Bitcoin Cash and it’s hard fork that has resulted with two separate chains and a bunch of uncertainty.
Background on the issue.
The issue at hand that lead to this fork had to do with a proposal brought about by a group of Bitcoin Cash developers called BCH ABC. In the proposal a “Coinbase Rule” was coded in. This rule or as some call it a tax requires 8% of BCH to be redistributed to Bitcoin ABC as a way to pay for future/further protocol development.
This was not universally supported by the BCH community and lead to a rival group forming called the Bitcoin Cash Node or BCHN who removed the “Coinbase rule” tax from the code. Before the last common block was mined most of the miners supported the Bitcoin Cash Node group and since the separation of the two protocols they have had the most hash rate. Further looking into it BCHN has mined 27 blocks to 0 blocks for BCH ABC.
Why this matters
The easiest reason is a fractured blockchain is more susceptible to hacks, issues on exchange listings (Coinbase has stopped BCH deposits), and the most public reason for me… Greyscale’s BCH Trust.
The issues of hacks and exchange listing are easy enough to see the Greyscale problem is a ton more public though. Since Greyscale has these trusts listed on the stock market TV networks like CNBC and Bloomberg pay a lot more attention to them. This negative news and the negative light just further allows people to brush off crypto. It’s especially concerning just because it has the name Bitcoin in it and I can easily see people who are not as interested in crypto thinking this is Bitcoin. They also have a sizable place in the industry as they are the 5th most popular on Coinbase.
Hope for the next few days
Luckily this whole situation could be fixed rather quickly as long as BCHN maintains its hash power superiority and it further encourages more hash providers to back it. This will allow in theory for the Bitcoin ABC chain to “disappear” due to insufficient power to keep itself running.
With the issue hopefully resolved the price of BCH can go back to where it was and the Greyscale’s Trust will not suffer due to it. Greyscale after all made big news this last week for their biggest BTC purchase value wise ever. Thus they have been in the public eye.
I personally feel that it is not a stretch to say that this current uncertainty negatively impacts the whole market. Weekends are already more prone to positive and negative price swings due to less liquidity so news like this just further give bears a reason to drive down price.
I hope y’all enjoyed this quick little update I threw together I am currently getting ready to watch SpaceX launch the first official NASA astronaut launch! If you have not have previously signed up or completed the COINBASE Earns for Compound, EOS, Stellar Lumens or Orchid below I have attached my referral links and would greatly appreciate the support!
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