Bitcoin cash, the fork of bitcoin created by a schism over block size last year, is about to fork again and prices have risen sharply as a result — moving the wider altcoin market higher.
Bitcoin cash, which has struggled against slumping value and waning volumes since it was created in August last year, added a whopping 37% to its price between Friday evening and Sunday afternoon before falling back. The bitcoin cash price is currently around $550, up from lows of $415 last week.
Bitcoin and other major cryptocurrencies have tended to surge in price ahead of hard forks (which result in the creation of a second chain and token) as investors of the original chain are rewarded with the newly created cryptocurrency based on a 1:1 ratio.
The bitcoin cash price boost was brought on by some of the biggest bitcoin exchanges and wallet providers weighing in on the fork decision. On Friday the world’s largest global crypto trading platform Binance announced its continued support during Bitcoin cash’s upcoming hard fork, as has San Francisco-based Coinbase.
France’s bitcoin and crypto startup Ledger meanwhile signaled it would support the dominant chain, the fork with the most hashing power and highest levels of stability.
The looming bitcoin cash fork, which can happen as much as twice per year as part of planned protocol upgrades, is scheduled for November 15. But this fork is somewhat different from the usual bi-annual upgrades as there is a competing proposal that is not compatible with the original roadmap of bitcoin cash from bitcoincash.org.
These decisions on cryptocurrency blockchains are decided by the miners and the mining power they control. If a miner is able to garner majority support for a proposal, it will be the direction the cryptocurrency blockchain moves in.
Bitcoin ABC, the most used Bitcoin cash client, has proposed a non-scheduled change to bitcoin cash which it claims will make it more scalable and usable, as well as opening doors for non-cash transactions on the Bitcoin cash blockchain. Bitcoin ABC also wants to keep the block size at 32 MB.
Bitcoin ABC has the support of major cryptocurrency miner, China-based Bitmain (with around 18% of the bitcoin cash mining power).
On the other side of the debate is nChain, which wants to avoid canonical transactions and raise the block size to 128 MB. nChain has the support of U.S.-based Coingeek (which has around 21% of the mining (or hashing) power.
These two camps are attempting to shore up support among the rest of the major bitcoin cash miners and pools.
One miner, Germany-based Norther Bitcoin, recently switched to mining bitcoin cash from bitcoin in order to have a say in the upcoming fork.
“We switched to bitcoin cash a couple of weeks ago,” said Moritz Jäger, Northern Bitcoin’s chief technology officer. “We wanted to be part of the decision makers on the upcoming fork. Coingeek wants to increase the block size and are trying to convince us to join them in doing so. We were previously mining bitcoin and expect to go back to bitcoin cash after the fork.”