A little after 8AM ET today, Bitcoin was split into Bitcoin Cash, an alternative cryptocurrency, in a chain split that had been anticipated for months. The split, called a “hard fork,” comes out of a bitcoin group’s desire to combat high transaction fees and a bitcoin size limit that made mining larger blocks invalid.
This has a nuanced implication for Bitcoin owners. If you own Bitcoin and control your private keys, the same private keys can be used to spend your newly minted Bitcoin Cash.
If you own Bitcoin but don’t control the keys, then it depends on whether you’ve chosen to keep your bitcoins on a Bitcoin Cash-friendly platform or digital wallet. Each platform is treating the new Bitcoin Cash differently. To enjoy this extra currency, you should check with your platform and wallet to see what the company policy is.
As a prelude to the split, Bitcoin trading platforms like CEX.io suspended Bitcoin withdrawals beforehand. CEX.io will allow both cryptocurrencies and split the coins for its customers. CEX.io chief marketing officer Eugene Kovalyk says, “Whether we will list Bitcoin Cash as a new trading pair depends on the demand. If demand is big we should consider adding it definitely…No one should lose Bitcoin Cash on our platform.”
Meanwhile, the world’s most popular cryptocurrency exchange, Coinbase, has rejected the new Bitcoin Cash to some customers’ chagrin. It argues that their systems can’t support Bitcoin Cash without a major system rework that is currently not worth the unknown value of Bitcoin Cash. A spokeswoman for CoinBase says, “If this decision were to change in the future and Coinbase was to access Bitcoin Cash, we would distribute Bitcoin Cash to customers associated with Bitcoin balances at the time of the fork. Coinbase would not keep the Bitcoin Cash associated with customer Bitcoin balances.” The exchange allowed a brief window of time before August 1st for users who wished to access Bitcoin cash to withdraw their funds from Coinbase.
Peer-to-Peer Electronic Cash
On August 1st 2017, We the People will breathe new life into Bitcoin.
A group of miners, developers, investors, and bitcoin users will upgrade the Bitcoin protocol as specified by the User Activated Hard Fork (UAHF).
Those who do not want to follow our lead are free to use whichever chain they like. Miners implementing the UAHF will safely split away, creating a new version of Bitcoin called “Bitcoin Cash”.
All current Bitcoin holders will automatically own Bitcoin Cash. The existing ledger at the time of the split is preserved, thus users retain any balances they had before the split.
Bitcoin Cash brings sound money to the world. Merchants and users are empowered with low fees and reliable confirmations. The future shines brightly with unrestricted growth, global adoption, permissionless innovation, and decentralized development.
These ideals can be achieved, but it depends on you to succeed. We need the support of miners, investors, and users like you. Join us to help achieve Satoshi’s original vision of Bitcoin
Block Size Limit Increase – Bitcoin Cash provides much needed relief to users with an immediate increase of the block size limit to 8MB.
Replay and Wipeout Protection – Should two chains persist, Bitcoin Cash minimizes user disruption, and permits safe and peaceful coexistence of the two chains, with well thought out replay and wipeout protection.
New SigHash Type – As part of the replay protection technology, Bitcoin Cash introduces a new way of signing transactions. This also brings additional benefits such as input value signing for improved hardware wallet security, and elimination of the quadratic hashing problem.