Has Poloniex Started Stealing User Funds?
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Has Poloniex Started Stealing User Funds?

Lorena Boanda - November 3, 2017
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What is bitcoin cash?

On August 1st, 2017 the Bitcoin blockchain experienced the first fork in its history. That means that an entirely different coin was born out of a difference in ideals. This new crypto coin is called Bitcoin Cash (BCH). But to understand the future of this new coin we need a little understanding of what it is in the first place.

Block zero

Leading to the August Bitcoin changes, two different ideas to tackle the same problem were born. The most widely supported idea was the implementation of SegWit. The Segregated Witness (SegWit) helps to increase the speed in which the transactions are made on the Bitcoin Network. The decrease of waiting times was the reason for the conversation about the changing the blockchain to start in the first place.

The other camp wanted to increase the size of the block. This different approach also gained support because it not only to address the speed of transactions but also made the blocks bigger, which prevented the network from being overcrowded again.

It was under this split in approaches that Bitcoin Cash came to exist under the develop of Calin Culianu and with the support of ViaBTC, a Chinese mining company based in Beijing.

The big fork

Bitcoin Cash duplicated the Bitcoin Network. That meant that all the transactions that have occurred since the invention of Bitcoin were also going to be registered in this alternative coin. At its core, Bitcoin and Bitcoin Cash share the same old blockchain. The difference lies moving forward. The main difference behind Bitcoin Cash are the following:

  • Increase the size of each block to 8MB under to believe that the Bitcoin future will depend on it
  • Users wants to avoid SegWit feature
  • The 2x block size will not be implemented, and thus the blockchain will have to be modified again

For all practical matters duplicating the blockchain means that everyone with BTC saw an equal amount of BCH as soon as the second coin went live. This, of course, carried consequences to exchanges and users alike.

The bitcoin cash exchange problem

Coinbase, Kraken, and multiple other exchanges declared their intentions to held all Bitcoin Cash trading until further notice. That means, users of bitcoin cash are not able to sell the new coin yet. To clarify these companies are not holding BCH from its users. They are not trying to profit from the fork by having free coins. These exchanges are only waiting for the new Bitcoin Cash blockchain to stabilise and operate normally before allowing it to trade. And it seems that will happen sooner rather than later.

The race for power

Bitcoin is still the reigning king when it comes to money invested. Its valuation is at an all-time high, and it shows no signs of decreasing that momentum. However, when it comes to computing power, the race is much closer than previously expected.

Coindesk reported that BTC Top and AntPool have the software to dedicate computer power to both networks. They join ViaBTC in the quest to add the necessary computer power that the Bitcoin Cash Network requires. Moreover, ViaBTC and AntPool are doubling-down on BCH by creating a computer algorithm that will make their systems switch between whichever network is more profitable.

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