Taxman gets the boot: Bitcoin Cash Node emerges as victor of hard fork

Published on by Cointele | Published on

The Bitcoin Cash network just went through yet another fork after originally being created as a hard fork from the Bitcoin.

The hard fork on Nov. 15 split the Bitcoin Cash network into two new blockchains, Bitcoin Cash ABC and Bitcoin Cash Node.

Among the two networks, Bitcoin Cash ABC received very little hash power, while Bitcoin Cash Node obtained the majority, indicating that miners may generally favor BCHN over BCHA. The last common Bitcoin Cash block mined before the fork was by Binance, and the first block that split the blockchain into two was mined by AntPool.

The network's very first fork occurred in August 2017, followed by another fork in November 2018, through which it was further split into Bitcoin Cash ABC and the Bitcoin Cash SV. With the latter token named "Satoshi Vision," this split was done with the intent to keep Bitcoin true to its original vision of the currency being used for peer-to-peer daily transactions.

The developers were split into two groups: BCH ABC, led by Amaury Sechet, who proposed the update; and the Bitcoin Cash Node, who has removed the source code for the additional tax that BCH miners would otherwise incur.

Even before the fork, data suggests that 80% of BCH miners were in favor of Bitcoin Cash Node, which is now reflected in the mining data following the fork.

Days beforehand, Bitcoin Cash was trading at record lows compared to Bitcoin.

The price of Bitcoin Cash has almost recovered to pre-fork levels, but it's evident that a hard-fork event brings uncertainty to investors and miners alike as to the pre-fork and post-fork coins.

This uncertainty could be the very reason that the assets under management of institutional investors such as Grayscale Investments' Bitcoin Cash Trust shrunk by $1.6 million before the fork.

This sense of insecurity seems to be absent with retail investors, as they deposited $1.5 million of Bitcoin Cash onto various exchanges prior to the hard fork rather than immediately selling off the asset, as inferred from trading activity by ChainAnalysis.