Bitcoin Cash(BCH) to have hard fork on May15

Bitcoin cash(BCH) is facing a major software upgrade and a hard fork on May 15 that should help the network process many more transactions. The update was announced last November,

A bitcoin hard fork

A hardfork is a change to the bitcoin protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade. An alteration which changes the block structure of the chain including block hash, or increases the set of valid transactions is a hardfork. If users do not all agree on the upgrade then a new coin will be produced with a new blockchain. The appended You Tube video explains what a hard fork is. It uses the creation of bitcoin cash as an example. It also explains the difference between a hard fork and soft fork.

The creation of bitcoin cash

In mid-2017 some developers were not satisfied with the changes planned to the bitcoin code and as a result on August 1 of 2017 they split the bitcoin blockchain in two forming bitcoin cash while bitcoin carried on with the original suggested changes.

A list of bitcoin hard forks can be found at this site: Bitcoin Cash: Forked at block 478558,[7] 1 August 2017, for each bitcoin (BTC), an owner got 1 Bitcoin Cash (BCH).

The appended video from early August of 2017 describes the birth of bitcoin cash. Since that time, the coin has done much better than the person on the video predicted although it comes nowhere near the price of bitcoin.

Among the main changes bitcoin cash made to the bitcoin blockchain was an increase in the maximum block size to 8 megabytes from one. The transaction signature hashing algorithm was changed so that it prevented replay protection for bitcoin cash transactions from the original chain. Finally, the original bitcoin difficulty algorithm (adjusted ever 2016 blocks) was replaced with a new emergency difficulty adjustment (EDA) algorithm. This was designed to respond more quickly to any drastic drops in the hash rate that might happen after the fork.

The new proposed changes to the bitcoin cash protocol

Some of the new changes are quite radical. The size of the block will change from 8 MB to 32 MB. This will allow vastly more transactions per block. Some of bitcoin cash's seasoned developers have suggested that moving ahead too fast with the changes could jeopardize the situation where the market cap of bitcoin cash was $24 billion and a single coin was going for a little less than $1,500.

However, that viewpoint seems not to be prevalent now. Joshua Yabut , a contributor to bitcoin cash's main protocol software implementation, BitcoinABC, said he doesn't expect any protest when users are finally given the choice on May 14 to upgrade their software. Yabut said to CoinDesk: "Block size increases are kind of non-controversial at this point, but it's nice to see on-chain scaling happen."

The return of smart contracts

The developers of bitcoin cash have now added in new kinds of smart contracts. These had been stripped from the chain because of security concerns that have now been addressed. The addition of the contracts will add even more functionality to users of the bitcoin cash system.

Steve Shadders, nChain developer said: "Essentially out of an abundance of caution and lack of time to fully explore and fix the edge cases that needed to be addressed, the decision was taken to simply disable any opcodes around which there were doubts or even hints of doubts. Seven years have passed and the edge cases around these opcodes are much better understood now. Additionally, the decision to disable them was taken hastily and under duress. The [bitcoin cash] community now has had the luxury of time to address these issues thoroughly....It's the first step for enabling smart contracts with the protocol which will allow us to compete with ethereum later on."

Some critics of the changes

A minority of users have complained that the sweeping changes being made should have been put to a community-wide vote before being adopted. The critics complain that there has been no chance to debate on the merits of the specific changes.

However, the disagreements are not deep enough or extensive enough to cause a new coin to come into existence when the planned fork takes place.

A few critics also are concerned that data-heavy projects such as Memo a recently launched censorship-resistant social network might even require even larger block sizes.

Present price of bitcoin cash

As of 19:50 UTC April 29th the price of bitcoin cash was $1437.38 a far cry from its larger brother bitcoin but it has been doing relatively well. A weekly analysis can be found here. The low in the last 24 hours was $1,374.85 and the high $1482.43. The price is up about 2.9 percent on the day at present.

Previously published in Digital Journal

As interest turns to other cryptocurrencies bitcoin price falls

(December 20)Bitcoin appears to have topped out as excitement about the first two future exchange launches fades and attention turns to other cryptocurrencies particularly bitcoin cash.

Bitcoin price declined several thousand from recent high

The price of bitcoin has declined well over $3,000 from its recent record high of $19,783 back on December 17th. Over a recent 24 hour period the price of bitcoin declined by 4 percent.

Trading volume jumped to more than $19 billion.

The large volume indicates that the decline could continue into the weekend as there is perhaps a strong sell-off with profit-taking.

Present prices of bitcoin

At 21:32 UTC (Universal Consolidated Time) the price of bitcoin was $16,368. Of course it could be much different by the time you read this. Its opening on December 20th was at $17,608 and its low so far was $15,517.

While the price has recovered considerably from its low, it remains well below its open and over $3,000 below its recent high.

Causes of bitcoin drop in price

Money seems to be flowing from bitcoin into other cryptocurrencies particularly bitcoin cash. This is prompted to a considerable degree by bitcoin cash being listed and fully supported on the Coinbase exchange.

The listing of bitcoin on two futures exchanges has increased interest in other cryptocurrencies including bitcoin cash.

Bitcoin cash and litecoin are seen by some analysts a alternatives to bitcoin as both have faster transaction speeds and lower fees.

As suggested in the appended video, perhaps "the whales", very big players, are selling and taking profits to buy back in later at a much cheaper price or alternatively investing in other cryptocurrencies.

Future outlook according to chart analysis

According to an analysis of the price chart of bitcoin the sell-off could run out of gas about the $11,000 level. So far there is no sign of the bitcoin price declining to that level.

The high of just under $20,000 is likely to remain such at least in the short term.

If the price of bitcoin closed above the 5-day moving average of $18,680 this would indicate a sharp recovery and a possible spike up above $20,000. However there is no sign of that as yet. There is some recovery but not enough yet to reach even $18,000.

Investigation of insider trading of bitcoin cash

Coinbase has announced that it is launching an investigation as to whether any of its employees violated its insider trading rules. There were widespread accusations on social media that some employees tipped off others in advance that the listing on Coinbase was to happen allowing them to buy bitcoin cash before its sharp rise in value.

The issue is also discussed in a recent Digital Journal article.

The controversy and the suspension in trading may help bitcoin recover from its sharp decline.

Previously published in Digital Journal

Bitcoin cash a new addition to trading on Coinbase exchange

(December 20) Coinbase just added support for trading bitcoin cash on the exchange. You can now send, receive, buy and sell bitcoin cash on the exchange. Bitcoin cash will also trade on Coinbase's institutional-focused exchange GDAX.

The launch of trading of the new coin has been experiencing difficulties and apparently trading has been suspended for a while at least.

Bitcoin price is way down — bitcoin cash way up

The announcement that bitcoin cash would trade on Coinbase was followed by a drop of as much as 25 percent in the price of bitcoin. It fell to a low of $14,000 but obviously had support at that level and recovered to $16,600 when the Techcrunch article reporting on the launch went to press.

On the other hand, bitcoin cash rose about 50 percent just in the last two hours trading around $3,000. Given these extreme price swings it is not surprising that the exchange felt that it should pause trading. It could be the exchange is also unable to handle the volume.

Details of trading stoppage

According to Coindesk, trading was stopped after four minutes of trading.

The exchange said at 18.30 Pacific Standard Time: "All BCH books will enter cancel-only mode, and all existing orders will be cleared. While in cancel-only mode, no new orders will be accepted. We will post an update shortly," BCH is the trading symbol for bitcoin cash.

The service outage was only trading in bitcoin cash, as trades continued in bitcoin, ether and litecoin, the other three coins traded on the exchange.

No doubt the flock of new users put a strain on the resources of the exchange.

What is bitcoin cash?

The coin was created when bitcoin experienced a hard fork in the beginning of August creating the new coin. There were a group of developers who wanted bitcoin blocks to be increased in size eight times. This would allow more and faster transactions and lower fees. These developers created bitcoin cash when the other bitcoin miners and developers refused to go along.

Another attempt to increase the size of bitcoin blocks did not go through in November and another possible hard fork was avoided. Some analysts touted bitcoin cash as an alternative to bitcoin. Litecoin was also mentioned as a possible successor too. Both are faster and have lower transaction costs.

Coinbase has changed its tune on bitcoin cash

Back in early August when bitcoin cash was first created, Coinbase said they would not support it. However within a couple of days they changed their mind and promised that customers would be able to withdraw it by January 1st next year. They did not however, promise full support.

This early development with full support surprised many.

Coinbase's rationale for adding bitcoin cash to its trading roster

Coinbase claimed that they considered ”developer and community support, security, stability, market price and trading volume” in deciding to fully support bitcoin cash. The company said: “Coinbase operates by the principle that our customers should benefit to the greatest extent possible from forks or other networks events. This is essential in our mission to make Coinbase the most trusted, safe, and easy-to-use digital currency exchange."

The exchange intends to support a number of digital currencies in the future so it makes sense that they have now added bitcoin cash which is the third largest coin by market cap. Coinbase already offers ethereum (ether) the second largest cryptocurrency.

Present prices

As I write this about 10:30 Central Standard Time coinmarketcap lists the price of bitcoin cash at $3,339 up over 50 percent on the day.

On Universal Coordinated Time (UTC) it is already December 20th about 5:00 a.m. The opening for bitcoin was $17,608, far off its recent high of over $19,000. Its low today was $15,577 according to Coindesk and are an average from several exchanges so you may find different figures elsewhere on a single exchange.

It remains to be seen if bitcoin can continue to recover from its losses or if it will drop further due to competition from other cryptocurrencies such as bitcoin cash. Many cryptocurrencies appear to be gaining value. The attention to bitcoin and the launch of bitcoin futures trading appears to have created more interest in many other cryptocurrencies as well, perhaps to the detriment of the price of bitcoin.

Previiously published in Digital Journal

Bitcoin prices recover while bitcoin cash declines

(November 13)While bitcoin prices plunged over the weekend and bitcoin cash prices soared, today bitcoin is recovering and bitcoin cash prices are suffering a steep decline.

On Sunday, the price of bitcoin cash reached as high as $2,500 before falling back. On Monday, it dropped nearly 60 percent from that high. Bitcoin itself reversed course from its steep decline to as low as $5,550 and is reported in a Fortune article as being at $6,700.

Differing views as to what caused bitcoin prices to fall

It appears that after the original bitcoin failed to increase its block size many of those who had supported the plan to double the size sold off their bitcoin and bought bitcoin cash as they had already increased their block size by eight times the original.

The huge drive to buy bitcoin cash had cooled by Monday and was as low as $1,250 as of mid-morning.

Those supporting bitcoin cash claim that the surge in support for the coin showed that many supported the newer coin whereas others claimed that the whole rise and fall resulted from Chinese and others carrying out a "pump-and-dump " maneuver.

Some other analysts claim that part of the price gains of bitcoin cash were fueled by Korean speculators who were buying in the hopes that bitcoin cash did not lose its momentum.

Many speculators may have lost a bundle overnight

Those who bought bitcoin cash (BCH) near its peak of 2,4000 to 2,500 will find themselves with half of their money gone today.

However, the price at $1,250 is still over twice what it was as recently as November 7th when it was around $600 dollars. Not everyone is losing.

Business is booming for cryptocurrency exchanges

Price volatility has been accompanied by a surge in trading as there is a large value of transactions. The CEO of Chainalysis a firm specializing in forensic analysis of digital transactions claims that weekend volumes were high and resulted in fat trading fees.

Bitcoin cash does not appear to be dethroning bitcoin for now.

During bitcoins' crash and bitcoin cash's rise some were predicting that bitcoin cash would soon replace bitcoin as the dominant cryptocurrency.

Today's developments show that such a dramatic shift could be far in the future. The recovery of bitcoin's price also shows that the bubble may not have burst as many had been predicting-- that is assuming there is a bubble. What we can be sure of is that we cannot be sure what will happen next.

Present prices

As I write this on Monday evening bitcoin cash is priced at $1,239. Bitcoin itself is at $6,663.. Check the links for the prices at the time you read this. They could be quite different given the volatility of the coin prices.

The appended video has a lot of conspiracy flavoring.

Previously published in Digital Journal