Bitcoin Cash (BCH) Internal Drama Escalates as Bitmain CEO Accuses Japanese Financial Giant SBI of Ill-Intentioned Interference
Accusations fly as Bitcoin Cash (BCH) approaches a possible hard fork that could have fateful consequences for the network.
The drama inside the Bitcoin Cash (BCH) network intensifies as Jihan Wu, the CEO of Chinese crypto mining giant Bitmain, hurls accusations in the lead-up to a planned hard fork of the cryptocurrency.
A tweet by Wu last week alleged that SBI Holdings, the investment arm of Japanese financial services giant SBI Group, is “attacking” Bitcoin Cash by attempting to assist Craig Steven Wright in a coup for control of the network. Wright is a chief scientist at blockchain research and development firm nChain and a self-proclaimed key developer of Bitcoin who has even claimed to be the real Satoshi Nakamoto, the mysterious Bitcoin father. Last month, Wright unveiled his intentions to bring his own version of BCH that will be closer to the Bitcoin 1.0 vision, thus triggering hard fork speculations.
The tweet was in response to a piece penned by David Jerry that warns of doom and gloom if the Bitcoin Cash network splits following the creation of the Wormhole update.
“No such claim was made. SBI will remain neutral and support the longest chain. If a split occurs then unfortunately BCH cannot be used as a platform for real business,” Jerry replied.
Jerry’s warning revolves around the idea that a split of the BCH network would be different from the one that created it in the first place. He argues that this particular dispute could make businesses lose faith in the coin as it suffers the threat of destabilization from a lack of what he calls permanency.
The drama comes as a result of a planned fork of BCH that will allow the coin to integrate smart contracts with two new opcodes. Bitcoin ABC, the network node software, will be upgraded with all of these changes the moment the fork goes live.
However, nChain is having none of it. The company, with support from CoinGeek, the world’s largest BCH miner, plans to counter this with a release of its own node software known as Bitcoin SV (Satoshi Vision), which will not have any compatibility with Bitcoin ABC.
Currently, CoinGeek has a 27% share of the BCH network, giving it a significant amount of influence over its internal workings.
Ethereum’s creator Vitalik Buterin spoke on the matter a few weeks ago, throwing in a word of support for the Wormhole update and criticizing nChain and Craig Wright, going as far as to call the Bitcoin SV-based coin ‘Bitcoin Craig’.
SBI Holdings, which has invested in a number of blockchain projects, enters the discussion because of a partnership it established with nChain in late 2017, making Jihan suspecting that the company might pull more support towards the Bitcoin SV client, ruining any plans that Bitcoin ABC developers may have had over the next few months.
Earllier this week, CoinGeek’s owner Calvin Ayre condemned Bitmain for supporting the Wormhole fork.
“Bitmain [...] wants to embed risky untested code into the base protocol that is entirely unnecessary for anyone but them. They seek to constantly experiment with the protocol creating constant instability and driving corporate investment away. They want to use this to enable their off-chain token solution (Wormhole) that will cannibalize and eventually replace Bitcoin with their Wormhole Cash (WHC) token network,” he wrote.
Ayre also alleged that Bitmain has “apparently pre-minted billions of WHC tokens to themselves already” and that Wormhole will use a proof-of-stake (PoS) model for consensus as opposed to the traditional proof-of-work (PoW) algorithm.
However, it makes little sense for Bitmain to want to support a coin that would rely on PoS, as its business model revolves around selling mining equipment and mining coins. If the allegations are true and the company has already minted a bunch of coins, then that would probably create an incentive.
In the end, it’s unlikely that the two sides of this debate will come together and bury the hatchet. Regardless, if we are to use history as our guide, the Wormhole/Bitcoin SV debacle is just a slightly more dramatic rendition of the BTC/BCH split.
Given what happened during the hard fork that created Bitcoin Cash, this next split is likely to create a little turbulence until everyone goes back to “business as usual” mode.