Does it mean that the world as we know it is going to end ? Are we going to lose every Bitcoins in our wallet ? SHOULD WE START PANICKING NOW ???? I don’t think so...
But first things first, why are we/could we have a chain split ?
One of many Bitcoin’s problems is its scalability.
Bitcoin's transactions are saved in blocks. One block contains 1 MB of transactions and every block is mined ( created ) every 10 minutes.
With these current characteristics, the maximum transaction per second ( TPS ) For Bitcoin is 7.
In comparison, Paypal offers 150 TPS and Visa 2000 TPS
To solve this scalability issue, the Bitcoin Core development team proposed an “update” of the Bitcoin software called SegWit. In short, it’s a process that will increase the block size from 1 to 4 MB.
For SegWit to be implemented, 95 percent of the network hash power need to adopt this process for the last 2016 blocks ( 2 weeks ) weeks
As you can see, for now a possible/ likely chain split is coming.
Is it serious ?
Nobody knows what’s going to happen.
Several cryptocurrency exchanges are preparing to trade 2 blockchains. GDAX ( coinbase) will suspend its BTC activity on the 1st of august
It Happened before :
In may 2016, the Decentralized anonymous organization ( DAO ), a complex smart contract on Ethereum blockchain aimed to funds crypto’s projects has been hacked after having raised $150M in ETH.
I will pass on the details of this hack but in order to return all the stolen ETH from the DAO, the ethereum developers implemented a hard fork.
2 groups emerged :
The Anti hard fork, arguing that “Code is law and the blockchain is immutable”
The pro hard fork, arguing that “Code is law is too drastic and we should not let the hacker win”
The blockchain split in 2. Holders of ETH had 2 currencies just after the split : The ETH ( The developer version ) and the ETH Classic ( ETC) the anti hard fork version with the old blockchain.
The Ethereum blockcain split occured on the 20th of june 2016. Here is prices of the ETh and ETC at the very beginning of the split :
25 july 2016 :
- ETC - $0.75 - For $0 Market capitalization
- ETH - $13.11 - For a $76 Market capitalization
Today ( 17/07/2017 ) :
- ETC - $14.73 - For $1.3 Billion Market capitalization
- ETH - $174 - For a $16.3 Market capitalization.
Did the Ethereum world end because of this hard fork ? NO.
You can find a much more detailed explanation about this split here