Bitcoiners have eventually decided to go their own way by splitting into two coins for the first time in bitcoin’s more than eight years long history.
A client that started development more than a year ago, seemingly in response to the Hong Kong agreement which is largely identical to the New York Agreement, has now been launched under the name BitcoinABC.
“It’ll fork off Aug, 1. There is “block must be big” rule that will definitively fork the chain,” Amaury Sechet, one of BitcoinABC’s developers, publicly said.
Another BitcoinABC developer who wishes to remain pseudonymous under the name of Freetrader told trustnodes Seechet’s statement is correct according to the current code rules, but the activation time is user-configurable.
However, the developers have “no plans currently to change the fork parameters [or the time] scheduling” with the “default EB (8MB) and the default mining generation size (2MB)” remaining for the time being.
EB is a new word, but most bitcoiners are probably familiar with its concepts as it largely seems to use the same method as Bitcoin Unlimited, with Freetrader stating:
“It implements a user-configurable option ‘excessiveblocksize’, which is also displayed as “EB” on the network. Basically, that’s the option for relay nodes to set their acceptable blocksize cap.”
Like in Bitcoin Unlimited, it appears node operators can set the size of blocks they are willing to accept, while miners can set the size of blocks they are willing to generate.
The general idea follows the approach bitcoin used to have before it hit the 1MB hardlimit. There used to be miner-set soft-limits, with the initial one being 250kb, which was increased by miners to 500kb, once demand increased, without much problem or community debate.
Likewise, in BitcoinABC, miners can increase the blocksize they are willing to generate, with the current default being up to 2MB, while also setting a hard-limit of sort – with the current default being 8MB – which itself can also be increased by miners and other node operators.
Freetrader described BitcoinABC as “Core with Segwit removed and a configurable blocksize instead,” before adding:
“There are still built-in limits at 32MB which have not yet been lifted, but essentially users could configure their blocksize up to 32MB. That gives plenty of room and time to safely raise the remaining limits in the software.”
BitcoinABC supporters largely think on-chain capacity should be kept above demand up to actual technical limits, with Freetrader stating:
“You are always going to have a technological limit with software, and there is the technological limit of the network as a whole. Our mission is to stay ahead on the scaling front.”
Interestingly, BitcoinABC will fork without changing Proof of Work (PoW). Miners, therefore, will be able to mine BitcoinABC as well as Bitcoin Core, or move between the two as they please.
As miners are self-interested, they will probably mine the chains depending on their price and profitability, both in the short term and estimated medium term. But how does BitcoinABC split without a PoW fork?
“It includes a compensatory difficulty adjustment in case the hashpower is so low that block times exceed 2 hrs. As long as such an extremely low hashpower condition persists, the chain’s difficulty will be lowered by 20% per block. So it should drop down to difficulty levels where it is mineable at even low hashpower.
This is just an emergency mechanism which we hope will not be needed, but it’s there to keep the chain alive if need be,” Freetrader said.
Just to be fully clear, we asked him if they are planing to fork on August 1st. His response was a decisive “Yes.” So bitcoin will chain-split, we asked. “I think there will be a UAHF chain and others, yes,” Freetrader said.
UAHF stands for User Activated Hard-Fork, which is largely what BitcoinABC implements. The client is very new, with their website launched just days ago, but it already has 35 nodes running, with many more expected as some Bitcoin Unlimited node runners – around 800 of them – switch or add a second BitcoinABC node.
Bitcoin Unlimited already has a BIP that arguably follows BitcoinABC’s approach, but, in any event, as BU node runners can accept larger blocks, they would probably be in consensus with BitcoinABC. That means Bitcoin Unlimited would probably follow BitcoinABC’s chain.
As such, we’re likely to have two bitcoins on August 1st. A Bitcoin Core coin (BCC) that implements segwit and moves towards a vision of full blocks with bitcoin’s blockchain operating only as a settlement for second layers like the Lightning Network where most transactions are meant to occur.
And a Bitcoin Unlimited coin (BTU) that has a vision of keeping on-chain capacity above demand with the network aiming to keep blocks less than full, so providing room for more on-chain transactions, while also probably incorporating second layers like the Lightning Network as optional protocols for users or businesses.
The two communities have already largely split, with their own public forums and their own very different, incompatible, visions. Which may mean August 1st would mainly formalize what has already largely happened.
Once they split, they can finally go their own way, focusing on their own projects, with the market passing judgment on which should be valued higher or how much each coin should be valued.
But until then, bitcoin has to go through August 1st and the likely trading frenzy that will follow as the network reaches a monumental decision.