# What is Bitcoin Cash?



## Duke of Marmalade (20 Dec 2017)

I understand bitcoin holders before Aug 1st have an equal number of bitcoin cash.  So the fall in bitcoin price sort of matches the rise in bitcoin cash.  Does bitcoin cash count towards the 21m limit or does it have a 21m limit of its own?

Bitcoin Cash is described by Wikipedia as a coin split by a hard fork.  It was the first such split in August.  It has been described as free money. Another followed in October, another in November now three so far in December.

So my question remains do these increase the 21m supply limit?

If they behave like share splits (overall value of shares stays the same) is this not a serious threat to the futures price?


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## Duke of Marmalade (20 Dec 2017)

Developing that last point.  For normal forward markets on shares there are rules for coping with corporate actions.  For example a one for one share split would re-denominate the forward price at half its original price.  Even for futures markets (usually on indexes) the indexes also cope "fairly" with corporate actions.

A coin split caused by a hard fork is similar to a share split.  It has one big difference though the new coins distributed to the holders need to stand as a currency in their own right so the math for corporate actions doesn't work.  It seems to me that a futures contract on bitcoin is simply a bet on all these factors.  If you had gone long BTC two days ago then its just hard luck that its coin split was accepted by one of the exchanges with a consequent transfer of price from bitcoin to bitcoin cash.


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## ant dee (20 Dec 2017)

The splits are independent of the original bitcoin. They just have different rules.
Instead of starting from zero, they are taking advantage of the network effect and distributing tokens to existing bitcoin holders.

BTC has 21m limit, BCH has 21m, BTG has 21m, some other has 4 times the limit etc.

I think only BCH so far has sufficient market volume to have an accurate market price. Coinbase is including it. Bitpay will support, that is good news as BCH fees are really low and merchants can accept it via bitpay soon.

Some say all these forks are not 'free money' as they come with socialised costs. Developers have to update software, on exchanges, wallets, BCH uses the same miner hardware as BTC etc.

As for the futures, I believe it has to be in the rules, and i think the future forks are ignored.
CME takes the price of Bitcoin from Bitstamp exchange does it not?
The possibility of a successful coin spit , transfering some value from the old chain to the new is something future traders have to account for.
However, these splits come with at least a few weeks notice, and other than BCH, they aren't worth much...


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## fpalb (20 Dec 2017)

It's more like a company splitting into two separate companies. If you owned 10% shares of the company beforehand, now you own 10% of each. Hypothetically the worth of both coins after the fork should be about equal to the single coin before the fork, though weirdly each significant (subjective!) fork so far has resulted in a higher combined value, probably mostly due to low liquidity in the forked market as many people don't know how or don't bother to claim their coins on the new chain.


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## cremeegg (20 Dec 2017)

ant dee said:


> The splits are independent of the original bitcoin. They just have different rules.
> Instead of starting from zero, they are taking advantage of the network effect and distributing tokens to existing bitcoin holders.
> 
> BTC has 21m limit, BCH has 21m, BTG has 21m, some other has 4 times the limit etc.
> ...



Nope. I didn't understand a word of this.


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## cremeegg (20 Dec 2017)

fpalb said:


> It's more like a company splitting into two separate companies. If you owned 10% shares of the company beforehand, now you own 10% of each. Hypothetically the worth of both coins after the fork should be about equal to the single coin before the fork, though weirdly each significant (subjective!) fork so far has resulted in a higher combined value, probably mostly due to low liquidity in the forked market as many people don't know how or don't bother to claim their coins on the new chain.



I understood this. 

It seems to answer the Duke's question by saying, yes the supply is increased above the 21m by each fork, although instead of 21m bitcoin we have 21m bitcoin plus 21m bitcoin-forked total 42m units.

the fact that the new units are issued to the holders of the existing units is a delicious twist.  How does this differ from printing money.


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## cremeegg (20 Dec 2017)

fpalb said:


> It's more like a company splitting into two separate companies. If you owned 10% shares of the company beforehand, now you own 10% of each.



Off you own 10% of a company you own 10% of the value of its assets. A share split does not effect this.

If you own 1/21 millionth of bitcoin and there is a fork now you own 2/42 millionths OF WHAT??

I know it does not change the argument about the worth of bitcoin, but I do think it throws it into stark relief. 

Separately if bitcoin can be forked indefinitely and subdivided by 10^8 the claim that the supply is limited is questionable in two different ways.


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## fpalb (20 Dec 2017)

cremeegg said:


> Off you own 10% of a company you own 10% of the value of its assets. A share split does not effect this.
> 
> If you own 1/21 millionth of bitcoin and there is a fork now you own 2/42 millionths OF WHAT??
> 
> ...



Your understanding is correct, and there are undesirable consequences of forks, but the the possibility to fork is a necessary aspect of being open source and decentralised. I don't have time now but I can write a more detailed post discussing the good and bad of forks later using the bitcoin cash fork as an example if anyone would like me to.


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## TheBigShort (20 Dec 2017)

fpalb said:


> It's more like a company splitting into two separate companies. If you owned 10% shares of the company beforehand, now you own 10% of each. Hypothetically the worth of both coins after the fork should be about equal to the single coin before the fork, though weirdly each significant (subjective!) fork so far has resulted in a higher combined value, probably mostly due to low liquidity in the forked market as many people don't know how or don't bother to claim their coins on the new chain.



I like this explanation, but I would imagine that the worth of both coins after the fork should only be equal at the time of the fork. Thereafter, each one can grow or fall in value independently of each other?


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## Duke of Marmalade (20 Dec 2017)

fpalb said:


> Your understanding is correct, and there are undesirable consequences of forks, but the the possibility to fork is a necessary aspect of being open source and decentralised. I don't have time now but I can write a more detailed post discussing the good and bad of forks later using the bitcoin cash fork as an example if anyone would like me to.


Yes please, I feel my understanding of Bitcoins has dipped below 10% again (more volatile than the price itself).


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## Duke of Marmalade (20 Dec 2017)

TheBigShort said:


> I like this explanation, but I would imagine that the worth of both coins after the fork should only be equal at the time of the fork. Thereafter, each one can grow or fall in value independently of each other?


Don't think so.  I think the new baby bitcoin has to learn how to walk and talk via its own wallets and apps etc.  but I could have that completely wrong


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## cremeegg (20 Dec 2017)

TheBigShort said:


> Thereafter, each one can grow or fall in value independently of each other?



Ooh my poor head.

If a bitcoin and a bitcoin-fork are traded separately then of course they could diverge in price. I see that.

But why would they. What makes 1/21 millionth of bitcoin worth more or less than 1/21 millionth of bitcoin-forked. Bitcoin-forked-August 2017, or indeed bit-coin-forked-December-2107-3.


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## ant dee (20 Dec 2017)

TheBigShort said:


> I like this explanation, but I would imagine that the worth of both coins after the fork should only be equal at the time of the fork. Thereafter, each one can grow or fall in value independently of each other?


Well yes is should.
But since there is no immediate and efficient market to find the price of the new coin... who knows... Maybe if bitcoin hadn't forked it would be worth 10-20% more now (10-20% is the price of BCH compared to BTC).
There is little liquidity in the beginning because people don't know how to access these coins safely.
You could try and claim the new coins with some dodgy software and end up losing the original coins. You can protect yourself from it but why risk it? Just wait it out and some good software will pop up.

The new split-coin has to receive support from the existing exchanges, wallets, infrastructure etc, so that would make the price different.
I don't know really, the markets do not always make sense..


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## Duke of Marmalade (20 Dec 2017)

ant dee said:


> I don't know really, the markets do not always make sense..


Let's toast to that


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## cremeegg (20 Dec 2017)

It seems that there are, 

Client Forks
Coin Splits
Hybrid Forks

Is that clear now Ted.


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## fpalb (20 Dec 2017)

To give yourself some kind of real world example outside of bitcoin, before I go into that, consider how there used to be one sport rugby... and then it forked giving rugby league and rugby union. Why could that happen? why did it happen? which is the _real_ _rugby _and why? or is that subjective? Was that fork a good or a bad thing?


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## Duke of Marmalade (20 Dec 2017)

Or the Protestant Reformation
Or the Sunni/Shia split
Or Sinn Fein/Fianna Fail
etc.

Looking forward to your explanation


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## fpalb (20 Dec 2017)

Exactly! basically the first point is that this is a governance/people aspect more a technical one. It comes from people being able and allowed to express their free will.


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## cremeegg (20 Dec 2017)

If I buy a bitcoin today, do I get a 1/21 millionth of all future bitcoin-forks ?

What about all previous bitcoin-forks.


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## fpalb (20 Dec 2017)

cremeegg said:


> If I buy a bitcoin today, do I get a 1/21 millionth of all future bitcoin-forks ?
> 
> What about all previous bitcoin-forks.


Same as the company analogy, if you buy shares in any company now, you will get shares in any that it divides into, but you will not get an shares from any it split into in the past, those are now separate and must be purchased separately if you desire.


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## TheBigShort (20 Dec 2017)

cremeegg said:


> Ooh my poor head.i


 

I agree, its all a bit of a tech-head talking shop at times.
That is one of the reasons I didnt entertain bitcoin when I heard about it first @€80.
On the other hand, despite my lack of understanding of the technology, the fact that no tech head has pulled the plug on all this by exposing a fundamental flaw in the blockchain technology at this juncture gives me confidence that it is robust enough to withstand, lets say, some mechanical failures. 
Thats not to say a fundamental flaw doesnt exist, but it is a strong indicator, at this point, that it is hard to find. 

Of course, the issue around the forks would appear to raise obvious questions. 
But again, the cryptocurrencey world continues unabated. So like fpalb analogy about rugby, you could add womens rugby to that list now. While womens rugby is growing in popularity, and attracting increased funding, there has been no noticeable or corresponding fall, that im aware of, of funding from the mens game.

Actually the sport analogy is quite useful. Considering the variance of different sports and that so many sports have amateur versions what gives any sport its professional status? 
I can easily watch a local team compete, playing for free, and get as much satisfaction and entertainment than if I watch a professional game. 
On the otherhand, there comes a point when the sheer quality of performance enduces a tipping point that people begin to pay to watch (what they can access for free locally). 
If bitcoin is, what it is propagated to be, then that has value.


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## cremeegg (20 Dec 2017)

There is a difference between Rugby union and Rugby League, between mens rugby and women rugby. Someone may have a reason to favour one over the other.

What difference is there between bitcoin gold and bitcoin diamond.

Bitcoin gold is trading at $380 at the moment, bitcoin diamond at $54.

I can understand, just about, why people might think that there is value in Bitcoin. I cannot understand why they see more value in bitcoin gold than bitcoin diamond. Unless there is some technical difference which I am not aware of.


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## ant dee (20 Dec 2017)

cremeegg said:


> What difference is there between bitcoin gold and bitcoin diamond.
> 
> Bitcoin gold is trading at $380 at the moment, bitcoin diamond at $54.
> 
> I can understand, just about, why people might think that there is value in Bitcoin. I cannot understand why they see more value in bitcoin gold than bitcoin diamond. Unless there is some technical difference which I am not aware of.



Well, bitcoin diamond split multiplies user holdings by 10. 
Bitcoin gold was just 1:1
So if you had 1 BTC you get 1 bitcoin gold. And you will get 10 bitcoin diamond, whenever those are released.

The current price is for futures, but multiply it by 10 and they get closer to each other.


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## Duke of Marmalade (20 Dec 2017)

ant dee said:


> Well, bitcoin diamond split multiplies user holdings by 10.
> Bitcoin gold was just 1:1
> So if you had 1 BTC you get 1 bitcoin gold. And you will get 10 bitcoin diamond, whenever those are released.
> 
> The current price is for futures, but multiply it by 10 and they get closer to each other.


Oh I suppose 540 is closer to 380 than 54

This is getting comical.  No criticism of you _ant_ _dee._  Yourself and _fpalb_ are making Trojan efforts to help me achieve my goal of 15% understanding.  Please don’t despair just yet.


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## ant dee (20 Dec 2017)

Duke of Marmalade said:


> Oh I suppose 540 is closer to 380 than 54
> 
> This is getting comical.  No criticism of you _ant_ _dee._  Yourself and fpalb are making Trojan efforts to help me achieve my goal of 15% understanding.  Please don’t despair just yet.



Ah no problem, I do not take any criticism personally. I am just trying to explain details that I understand, maybe debunk some obvious myths.
I also started learning coding, maybe I can give my own understanding a boost too!
I could lose all my crypto - stake if its all a house of cards falling down, it will hardly affect my life anyway. Maybe I land a good job knowing a few things about blockchain in the end.
I am not advising anyone to buy or sell, hell I don't even mention it on friends and family. They will either think I am a billionaire or a scammer and who has time to explain all this?

And I do agree, all these coin-splits are a joke. But, hey, people are free to do it so they do it!


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## TheBigShort (20 Dec 2017)

ant dee said:


> I could lose all my crypto - stake if its all a house of cards falling down, it will hardly affect my life anyway.
> I am not advising anyone to buy or sell, hell I don't even mention it on friends and family. They will either think I am a billionaire or a scammer and who has time to explain all this?



I would be along those lines too. I think there is a perception amongst some detractors that those who hold bitcoin are ploughed knee-deep into it and are risking their homes and future prosperity.  I'm sure some are, but for the punters on this site, I'm guessing their stake in crypto is broadly in line with what they can afford to use.
The only reason I eventually dipped my toe in the water is to try understand the concept of crypto-currency in the first place. Having done so, I believe I have a better understanding of the concept, if not the technical arrangements behind it.

Much has been made about the forks and splits, and for sure it does raise eye-brows, but here is a list of circulating fiat currencies globally

https://en.wikipedia.org/wiki/List_of_circulating_currencies

Some of these currencies belong to basket case economies. Zimbabwe stands out, it has split itself into eight different currencies. But those currencies, some of which include the British Pound, Euro, US Dollar and Yen. That's one confusing system, I think most would agree.
Now my understanding is that it is not illegal to use the £Stg notes and coins, in this country. But it in large part it would be very cumbersome. On the otherhand, if you are close to the border, the Euro and Stg are widely exchanged without fuss. So in reality there are two fiat currencies in operation on this island and they cross-borders. Official Ireland and Official UK will say there is only one currency in operation, but in reality there are two.
Going back to list of fiat currencies, it is clear that in many parts of the world more than one currency is adopted officially. But unofficially, there are more economies that use additional fiat currencies outside of the 'official' currency. Mexico and Canada for instance, the acceptance of the US Dollar is accepted in many areas.
So in effect, it is _economic forces _that dictate what is and what is not accepted as currency, not any centralized authority like a central bank. For sure, central banks and governments have a massive influence in the adoption rates and instilling confidence in the usage of any particular currency but in a globalized and digital world are such centralized authorities needed? Certainly in border counties in Ireland it is generally the local traders who set the value of each currency.


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## cremeegg (20 Dec 2017)

TheBigShort said:


> Certainly in border counties in Ireland it is generally the local traders who set the value of each currency.



No its not.

Can we keep this thread to bitcoin cash and subsequent forks.


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## TheBigShort (20 Dec 2017)

cremeegg said:


> Can we keep this thread to bitcoin cash and subsequent forks.



For sure, I'll sum up my point above.

Its economic forces that dictate what is and what is not accepted as currency. Forks and splits, meh!


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## jman0war (20 Dec 2017)

Duke of Marmalade said:


> I understand bitcoin holders before Aug 1st have an equal number of bitcoin cash.  So the fall in bitcoin price sort of matches the rise in bitcoin cash.  Does bitcoin cash count towards the 21m limit or does it have a 21m limit of its own?
> 
> Bitcoin Cash is described by Wikipedia as a coin split by a hard fork.  It was the first such split in August.  It has been described as free money. Another followed in October, another in November now three so far in December.
> 
> ...


If your private key was created before the fork occured, then that key 'unlocks' an equal amount of coins on both chains.
If that private key was created after the fork, then no the key is only valid on the chain you bought into.

That's not the same as inflating money supply.
You can't really spend your Bitcoin on the Bcash chain and vis versa.

Bcash is like, bootstrapping their project by recognizing the keys and all the transactions that occured, up to the time of the fork.


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## TheBigShort (20 Dec 2017)

jman0war said:


> You can't really spend your Bitcoin on the Bcash chain and vis versa.



Thanks for that explanation man0war, but im reading that somewhat ambiguously. Can you or can you not spend bitcoin on bcash chain and vice versa?
It reads somewhat like officially you cant spend £stg in Ireland, but you can really if you know how to do it, or where to go.

Also, is it possible to buy bcash with btc without using a trusted third party?


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## jman0war (20 Dec 2017)

TheBigShort said:


> Thanks for that explanation man0war, but im reading that somewhat ambiguously. Can you or can you not spend bitcoin on bcash chain and vice versa?
> It reads somewhat like officially you cant spend £stg in Ireland, but you can really if you know how to do it, or where to go.
> 
> Also, is it possible to buy bcash with btc without using a trusted third party?


They are two separate blockchains that share a common transaction history, up until the point that Bcash forked.


I don't know the answer to your 2nd question, but i would imagine that on some exchanges like Bittrex, Kraken, you can take BTC and purchase BCH with it.


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## fpalb (20 Dec 2017)

So today's rabbit hole is forks.

"No matter what the problem is, it's always a people problem."  - Gerald M. Weinberg on software development.

This is more about general governance in decentralised systems and emergent behaviour than anything specific to Bitcoin or crypto. As I mentioned earlier rugby forked, and Duke mentioned a bunch of other kinds of examples, so I think people have the general idea, but I think it's probably good to consider an analogy in a bit more detail. I've briefly touched on the question of who controls bitcoin before and this relates to that also.

I'm going to do two parts to this, this first post is not specific to crypto. I want to use an example that is also software and that has a network effect as it's a bit different from other examples in that the friction to fork is less from a practical point of view - lets use this site, AAM, as an example.

On the surface of it AAM is controlled by Brendan, so you could argue that Brendan has 100% control over discussion of everything that is discussed here. But we know that's not true because the internet allows permission-less innovation and forum-based websites are easy to create. The value of the site doesn't come directly from Brendan, or from the forum software, or from the users, but from a combination of all three.

Anyone could start AAM-gold.com tomorrow, a rival site that would basically look the same with all of the same sub-forums and infrastructure. It would have no value if no one used it, if ALL of the users from here left and instead used AAM-gold it would probably take all of the value from here.

So who ultimately has the power? you can consider various different stake holders in the AAM ecosystem:

Brendan or other administrators: owns the domain name - the brand, the brand has goodwill built over time, and incoming links from other sites, google search ranking etc. Does the site administration. You might have others willing to contribute web hosting, or coding skills or free advertising.
Power users: have knowledge and do the bulk of question answering, they are more valuable than ordinary users. They are the heartbeat of the site.
Ordinary users: they matter, but each one matters less than Brendan or an admin or a power user.
So to determine whether a breakaway to rival site would succeed you can't count each person as an equal vote, you need to consider their role and importance in the ecosystem, for crypto we would call it the economic majority.

For AAM-gold to succeed you're going to need enough admin support, and you're going to need probably a majority of power users to move, unless the site itself has some features that differentiate it.

This obviously all _could_ happen, but (at least to my knowledge) has never even been attempted? Why, because for the most part everyone is happy here, Brendan runs the site well from what I've seen, and people agree with how he runs and moderates it.

Splitting the community across this and a competitor site would be bad for everyone, the fact that it hasn't happened is a _good_ thing, but the fact that it can happen and that Brendan does not have absolute control over all forums is also a _good_ thing. It means that neither he nor anyone else could make AAM into something that the economic majority of its users don't want, because eventually it would hit a tipping point where they'll leave.

Even if it doesn't happen, the threat of a fork helps keep a balance of power and a service that the majority are happy with.

(Sorry if this was all stupidly obvious, I don't know how much other people think about this kind of stuff) 
Part discussing bitcoin cash coming up...


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## fpalb (20 Dec 2017)

*The Technical Bit*
From a technical point of view, as we've discussed in other posts, the 'rules' of bitcoin are written in the software. They specify what counts as a valid transaction, what counts as a valid block, what the mining schedule is and what the mining rewards are etc... The rules are enforced by every node running that software, meaning they ignore and do not forward invalid transactions or blocks. The copy of the blockchain they all maintain always obeys the rules. The rules, and therefore the definition of what bitcoin is, can be changed if the economic majority decide collectively to change them. 

If there is consensus for a rule change and every single node runs software containing the change, then we have a smooth change with no conflict. If only some of the nodes implement the change and others don't we get a fork. The blockchain diverges at the point where a block is mined and accepted by some nodes, but considered invalid by others which will wait until they get a valid block, the timeline might be like this, if we consider the two factions as A and B :

blocks 0...n-3, n-2, n-1, n (all considered valid by both A and B).
Everyone in faction B agrees to run software which specifies that the rules change in a non-backward-compatible way after block n. 
block nA+1 is then mined by a miner in faction A, faction B considers it illegal and ignores it.
block nB+1 is then mined by a miner in faction B, and faction A ignores it. 

The miners in faction A will work on block n+2 and will build it referencing nA+1 as the previous block. The miners in faction B will also work on block n+2 but will build it referencing nB+1 as the previous block, and so on, with each side ignoring the blocks of the other side.

So we effectively now have two blockchains that are now completely separate but whose blocks are identical from block 0 to block n.

*Bitcoin forks*
Bitcoin chugged along for 8 years without a fork, until this year. All of the stake holders - miners, exchanges, developers, wallets, merchants, traders, investors, users etc were more or less happy with the rules. Nobody wanted a fork, and almost everyone saw it as the 'nuclear option', something only to be used if the economic majority were being strong-armed by a subset of stakeholders somehow. Everyone knew it would be terrible PR, cause user confusion and basically a confidence hit to the whole idea. It was always one of the arguments the naysayers had - "bitcoin could fork at any time, it would be chaos, everyone would leave and never trust crypto again".

*Why the Bitcoin Cash fork happened*
Well, as I've mentioned in many posts, bitcoin is started reaching the maximum transaction capacity in the last couple of years and some members of the community started to think it was becoming high priority, others didn't. This was the first rift. Then even when it did become high priority for everyone there was disagreement on how bitcoin should scale, which stemmed from differences of opinion about what properties and uses of bitcoin were the most important. I'll try to make a neutral summary of the point of view of both sides:

*Bitcoin Core's view (the small blockers)*
The general view here is that bitcoin's primary value is that it is censorship resistant, which depends on it being decentralised, meaning that there are many nodes and miners running the software distributed all over the world. This means it's difficult to shut down or coerce all or even a majority of nodes so the system cannot be interfered with.

Increasing the size of blocks to allow more transactions makes them larger in terms of data. All transactions and mined blocks need to propagate all over the world in real-time and be stored by nodes. Therefore as you increase the block size you increase the cost of running a node, and you increase the bandwidth requirements, meaning that as you increase it you may force some nodes to leave the network if they don't have fast enough connections to receive and send all of the data in time. Additionally if some miners hear about a new block before others, they get a head start on mining the next block so there are concerns related to that too. 

They also argue that increasing the blocksize is at best kicking the can, if you want to scale bitcoin to ever rival centralised payment systems the blocks would have to be massive, and that the cost and expense of storing every trivial 'cup of coffee' transaction on the blockchain for ever is a waste and will never be practical. The solution instead is layers on top of bitcoin that use bitcoin as an escrow or trust-less settlement layer i.e. the lightning network.

Finally, doing any non-backwards change to consuenus rules is risky, you don't _know _that all of the various software that 'speaks bitcoin' will actually make their changes be 100% compatible even if they intend to! so you might get an unintentional fork - no longer a single universal ledger!  

In summary - increasing the blocksize is a threat to centralisation, it's short term band-aid, hard forks are risky, and layer 2 solutions are coming anyway.

*Bitcoin Cash's view* *(the big blockers)*
The general view here is that scaling is urgent. The current 1MB blocksize limit can easily be raised immediately to 2 or 4 or 8 MB without any real impact on node decentralisation or distribution. Moore's Law is still in effect, processing, storage and bandwidth is getting faster and cheaper all the time, so a limit imposed 8 years ago should no longer be suitable for today. 

Satoshi never planned for the limit to stay at 1MB, in fact the original bitcoin code had no limit! and the 1MB limit was introduced to stop someone attacking the network by creating huge blocks which would still be legal. There's a quote from Satoshi about it: 
"It can be phased in, like: if (blocknumber > 115000) maxblocksize = largerlimit It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don’t have it are already obsolete."

You can argue that decentralisation is a function of adoption - that the most decentralised and secure blockchain will ultimately be the one with the highest market cap, which will be the one with the most users. The more users bitcoin has, the more merchants, businesses and exchanges it will have. The more of those there are, the more nodes there will be. Putting an unnecessary hard cap on the number of transactions caps the number of users. This is a terrible thing to do in the early stages of adoption of anything, and is one of the few ways bitcoin could lose its head-start and network effect over competitors.

If a blockchain technically can support more users than bitcoin chooses to without losing significant censorship resistance then another one will, and that one may overtake bitcoin before the layer 2 solutions are ready. On that note, there's no guarantee about when or even if things like the lightning network will actually work as hoped. Scaling is a really complex problem to solve and this is uncharted waters.

Heed the warning of Sean Parker on why Friendster got superseded by MySpace and why MySpace got superseded by Facebook despite the massive network effects of social networks:  https://www.youtube.com/watch?v=zVIhUVid4fA

Many were saying back in 2015: Bitcoin has never grown linearly, you can't extrapolate the linear growth from the current bear market. There will be another bull market, rally in price and period of exponential growth. When it starts it will happen quickly and if the infrastructure can't handle it we will be turning away masses of new users, and previous users who needed cheaper and faster transactions. You might only get one real chance at mainstream adoption.

*The eventual fork, consequences, and my own view*
I hope that I wrote the above in a way that is neutral enough that it's difficult to know whether I support Bitcoin Cash or Core.

The debate went on for months, and neither side could convince the other, but the vast majority sided with Core. It was a complete civil war, and it's still going on - v. The remainder decided to go ahead and fork and Bitcoin Cash was born in August. It has less users and adoption so the price is lower but the transactions are cheaper and faster. It has very little developer talent supporting it and they screwed up a change regarding the mining difficulty already.

There was no real noticeable damage to bitcoin, yet anyway. Bitcoin Cash immediately traded at a market value in the 100s but Bitcoin did not really fall in price at all. One interesting consequence of the fork was that the shared history of the blockchain up to the fork time means that the public addresses, the balance of coins they had and the private keys for those addresses were identical at the time of the fork. So if you had bitcoins stored on an exchange or with any other third party, they also had control of the bitcoin cash for the same address.

This put all of those 3rd parties in a weird position. Were they morally or even legally obliged to provide their users with the bitcoin cash? It meant added work and expense to do so, and many didn't want to support the fork at all if they were on the side of Core anyway. Eventually, perhaps worried about the legal aspect or ad PR, pretty much everyone has distributed the bitcoin cash balance to users by now (coinbase finally did it yesterday), and most of the exchanges figured they might as well support trading it since so many of their users now have a balance of it and the site had to support withdrawals anyway. At least allowing trading means they can make some income from it. What this has done is perhaps set a weird precedent, and shown that if you fork bitcoin instead of creating an alt-coin you might have a much better chance of getting support from exchanges.... hence all the other awful forks springing up.   

I wish the fork hadn't happened like this, I wish it was obviously clear how to scale bitcoin and that everyone was on the same side working towards it. On the other hand maybe we can never know without just trying both. Mutate each way, and leave it to natural selection, healthy competition. Part of me is glad a fork happened, just to prove it could happen and not be fatal.

None of the other forks matter - bitcon gold, diamond etc are all just garbage and not worth talking about, they'll have trivial adoption if any.


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## BreadKettle (20 Dec 2017)

fpalb said:


> None of the other forks matter - bitcon gold, diamond etc are all just garbage and not worth talking about, they'll have trivial adoption if any.



Nayer a truer word spoken. Wish they'd stop, it's clearly confusing people that don't get what's going on. The greed is too strong though.


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## TheBigShort (21 Dec 2017)

Thanks fpalb, once again, excellent post even if I still dont understand all aspects of it. So if may indulge your time, for a couple of questions;

You say bitcoin gold, diamond etc are garbage.

Can I assume that that is because at its core, bitcoin is fundamentally sound, but that yes, if people want, they can still disagree and change periphery details of the system?

Using a (any) political party as a comparison, that the party has an ideology that resonates with a lot of people and gains traction. Eventually, as the party is growing, some in the party have interpreted a core value of the party to mean something else (or to be achieved using a different tactic). This creates a tension in the party that is not resolved and eventually a split occurs - bcash.
Thereafter other party members then take issue with other more periphery values of the party, that an informed voter can reasonably ask, why did they join the party in the first place? And that that is where bgold and bdiamond are at?
So as not to try offend anyones political views - If bitcoin was the Tory party, UKIP would be bcash, bgold would BNP, and bdiamond would be English Defence (not even sure if thats there proper title).

Or am I still way off track in understanding your post?


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## Duke of Marmalade (21 Dec 2017)

Excellent stuff _fpalb_.  Great illustration of network effect using AAM.  The difference between AAM and Bitcoin is that AAM is networking something,  where would be without those gems from B/S?  Bitcoin is networking numbers on a ledger.  

I think the Protesant Reformation best matches this forking business.  The Catholic church survived intact, the fork went in all sorts of directions.

Still getting round this consensus thing.  You seem to have been involved in the civil war. I presume there wasn't any such thing as an online vote taken, or was there?  So some nodes decided to split and process big blocks.  Did these nodes also continue to process the mainstream blocks?


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## TheBigShort (21 Dec 2017)

Duke of Marmalade said:


> where would be without those gems from B/S?



Will you tell us the one about Dr Frankenstein again, pls?


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## fpalb (21 Dec 2017)

TheBigShort said:


> You say bitcoin gold, diamond etc are garbage.
> 
> Can I assume that that is because at its core, bitcoin is fundamentally sound, but that yes, if people want, they can still disagree and change periphery details of the system?


You're way over-estimating them. For example Bitcoin Gold released a wallet with malware designed to steal bitcoins. These are just like the new garbage alt-coins that are released daily. Bitcoin Cash was the only fork that had any kind of significant support.



Duke of Marmalade said:


> Excellent stuff _fpalb_.  Great illustration of network effect using AAM.  The difference between AAM and Bitcoin is that AAM is networking something,  where would be without those gems from B/S?  Bitcoin is networking numbers on a ledger.
> 
> I think the Protesant Reformation best matches this forking business.  The Catholic church survived intact, the fork went in all sorts of directions.
> 
> Still getting round this consensus thing.....  I presume there wasn't any such thing as an online vote taken, or was there?


Simply put bitcoin itself is a way to reach consensus, it has even been named 'Nakamoto Consensus'. The software you choose to run and the coin you choose to hold and not sell _is_ your vote, and your vote matters in proportion to what impact the software you run has (if you're an exchange or business it's more important than if you're just a user etc). Of course during the scaling debate and before forks were resorted to there were attempts among developers and major stake holders to try and assess what they wanted and find a common solution that would make everyone happy and avoid a fork. There were multiple conferences and eventually the New York Agreement which some people later reneged on.



TheBigShort said:


> So some nodes decided to split and process big blocks., Did these nodes also continue to process the mainstream blocks?


Users can hold both bitcoin and bcash, or choose to sell one or the other, or both. Some users did dump all their bitcoin and buy bcash instead for example. For exchanges it's easy and most profitable to just support both no need to take a risk by trying to pick a winner. Miners however, can only dedicate units of mining power towards either one or the other at any given time, but miners for the most part tend to follow the money, so the proportion of how the old mining power gets distributed to bitcoin or bitcoin cash should generally follow the ratio of their market prices (because why would miners mine at a loss). It's easy for miners to change on a whim though, if bitcoin cash doubles in price, twice as much mining power might switch over to it. A lot of high profile bitcoiners, some of whom are large holders, publicly backed one side or the other.



TheBigShort said:


> You seem to have been involved in the civil war


I didn't get involved in the war beyond a little bit of debating online, but for the most part it's too crazy to participate in. The demographics that crypto appeals to makes it worse, lots of conspiracy theorists, libertarians who hate anyone telling them what to do, nerds who are used to being the smartest people in the room and always being right and then all of the above lacking social and diplomacy skills and humility. It's not worth my wasting my time arguing with them.
If you want to get an idea look at the kinds of posts near the top of bitcoin reddit which is pro-Core. There are a few posts slamming Roger Ver (a bcash evangelist) and there's a post called "Here it is 'How to close a Coinbase account'"  - because coinbase enabled bcash trading yesterday.
The moderators of the bitcoin reddit started censoring scaling discussion and banning users last year so the btc reddit has become the home of the other side of the argument.
So people aren't even debating this with each other much any more, just slinging mud back and forth over the fence from their own separate forums.


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