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Bitcoin Cash (BCH) has finally initiated its hard fork after months of tensions between developers. Does this signal the beginning of the end for altcoin or the promise of a revival?
End of the Bitcoin Cash (BCH) funding debate?
Before undergoing this hard fork, the Bitcoin Cash (BCH) project was crossed by several heated debates in 2020. Earlier in January, there was talk of introducing a mining tax that would finance the network’s development.
12.5% of mining rewards had been proposed to be automatically transferred to technical teams for network development. The measure sparked an outcry from the BCH community that it was quickly canceled. However, the idea had gained ground, and Amaury Sechet, the lead developer of Bitcoin ABC, made a rule implementation on the Bitcoin Cash protocol. The rule would allow for 8% of mined BCH to be sent to an address controlled by Bitcoin ABC to finance development.
It was this one-sided maneuver that forced the inevitable: a hard fork for Bitcoin Cash. The payment network split into two implementations during its recent update. Bitcoin Cash ABC (BCH ABC) and Bitcoin Cash Node (BCHN). The former has an 8% mining tax, while the latter has zero mining tax implementation.
— BCH is CASH (@bch_pls) November 15, 2020
After the hard fork, BCHN gained the upper hand with 60% of miners using its protocol against 40% for BCH ABC. It is, of course, too early to determine which of the two versions will be able to dominate in the coming months.
Consequences for Bitcoin Cash?
The price of Bitcoin Cash experienced a sudden drop in the hours following the hard fork. BCH lost around 10% within 24 hours of the hard fork. However, at the time of publication, it has recovered and is currently valued at $247.19.
Therefore, we must wait to see how the hard fork will unfold for the two versions of Bitcoin Cash. For now, it looks like BCHN has several cards in hand to become the dominant version. But a hard fork is never trivial, and the Bitcoin Cash project could struggle to recover from it.