Traders await Bitcoin Cash hard fork
Update for Currency.com users regarding BCH hard fork
With the Bitcoin Cash (BCH) blockchain set to undergo a hard fork on November 15, opinion is split as to what the likely outcome will be.
An event that can occur across almost any cryptocurrencies, a hard fork is a radical change in the protocol of a blockchain network that invalidates previously valid blocks or transactions and vice versa.
Bitcoin Cash came into existence in 2017 as a fork of Bitcoin. Its developers and early adopters were dissatisfied with the world’s first and largest crypto being treated more as an investment or asset rather than the revolutionary medium of exchange it first promised to be.
Bitcoin Cash itself split into two cryptocurrencies in 2018, Bitcoin Cash and Bitcoin SV. While these stand 26 and 60.8 per cent above their 2020 starting levels, respectively, both cryptos currently trade far below the peaks reached in February. Neither have benefitted from the wider surge in the crypto market seen since March’s Covid-19 crash.
While hard forks can be fantastic opportunities for traders, there are disruption risks.
A chain split is generally expected to take place on Sunday between two protocols known as Bitcoin Cash Node (BCHN) and Bitcoin Cash ABC (ABC).
According to the latest data from Coin Dance, BCHN is currently the dominant chain with 80.9 per cent of blocks signalling support for it. In contrast, only 0.3 per cent are backing ABC.
In order to minimise any possible disruption, Currency.com plans to:
1. Support the dominant chain with the most work done.
2. Credit users with the coin belonging to the minority chain at a ratio of 1:1. This will be based on the information about the amount of BCH accounted for the client on their account at 12pm UTC on November 15.
To make sure that user funds are safeguarded during the hard fork and to mitigate the risks of sudden price changes, we are also introducing a number of temporary measures:
1. From 12pm UTC on November 10 until 12pm UTC on November 11, BCH markets in the exchange and leverage sections will be transferred into close-only mode. If a user is currently trading with leverage in this market, we ask that they close their leverage operations until 12pm UTC on November 11.
2. Also from 12pm UTC on November 11, leverage and exchange BCH markets will be moved to view only – with BCH deposits and withdrawals suspended on November 12.
We will announce when BCH trading, deposits and withdrawals will resume as soon as we can – and provide further information about how the hard fork may affect things going forwards.
If you have any questions about the hard fork, please do not hesitate to get in touch with us by emailing email@example.com.
By mid-afternoon, Bitcoin Cash traded down by 3.2 per cent at $255.80.