At 1220 UTC on 1st August, 2017, Bitcoin Cash (BCC) arrived. It is an analogue, but not a precise one, for Bitcoins (aka BTC). The most obvious difference is that the block size in the underlying blockchains of BCC is 8MB rather that the 1MB which BTC uses. This ‘promises’ greater utility for BCC users.So, as of 1st August, there are two ‘bitcoins’ floating around ethereally (for these are non-fiat currencies). So what? There have been plenty of previous so-called ‘Alt-coins’ (alternative electronic, non-fiat currencies). Well, … there are differences with almost impossible to forecast consequences.
Why has BCC arrived?
Ironically, the original reason for the block size limit of 1MB was to ensure the Bitcoin network would reject blocks of greater than 1MB. This was a security measure, designed to prevent potential DoS attacks by hackers. It also helped deal with the challenge at the time of many people with limited bandwidth. The fear was that creating and broadcasting huge blocks could paralyse the network.It did not need large blocks to achieve this. Success has delivered ‘failure’. It now takes hours or even days to deliver network consensus for BTC blockchain changes. To give some idea of the problem, the BTC blockchain stood at some 126GB as of 31st July 2017.
A ‘sort-of shared’ blockchain?
Most alt-coin offerings possess their own blockchains. BCC differs because it proposes something different. It will use the original BTC blockchain data up to the point of bifurcation at 1220 UTC.From that time (after some reprocessing) there will be two blockchains – the BTC one and the BCC one. They will share a common heritage, with identical data, up to 1220 UTC. After 1220 UTC they diverge, not only in the block sizes but also the entries made in their respective blockchains.Think about this. It dredges up many strange questions, most without answers. (And for the biggest question of all, ‘will BCC survive?’, only time will tell.)
Where is your BTC value?
If you have (say) 1000 BTCs sitting in your digital wallet at 1219 UTC on 1st August 2017 you own the potential to turn those BTC into roughly US$2,700,000. But are they on the BTC blockchain or the BCC blockchain?The answer would seem to be on both. Your ownership of the 1000 Bitcoins is on both blockchains.In such a scenario, you might think that you ‘should’ be able to spend or convert your 1000 Bitcoins twice, once from each blockchain. After all, there is a record of your bitcoins in two places.
Has the BTC fox become the gamekeeper?
The key to preventing this seems to be the Exchanges who will effect the switch from BTC (or BCC) to (say) US$. To convert your 1000 BTC (or BCC) in your digital wallet you must present your ownership credentials to an Exchange. That Exchange will determine whether you own your bitcoins. To decide this it will have to check both the BTC and BCC blockchains to ensure you are able to execute the exchange. Several issues arise from this.First, not all Exchanges propose to support BCC. That restricts mobility, and liquidity (you have restricted choice as to where you can make an exchange from bitcoins to US$).Second, if an Exchange does support both BTC and BCC, it places the onus on the Exchange to be the arbiter of accuracy. There is no other mechanism in sight which can check ownership against both. Yet Exchanges are not exactly the paragons of reliability that (say) the NYSE or LSE are. Remember Mount Gox? And others? If this analysis is accurate, the Exchanges have become the gatekeepers. In effect, the foxes will have control over not only the chickens but also the farm, with unknowable implications.Third, the existence of two ledgers of record introduces new uncertainties (one which, to be fair, Ethereum and Hyperledger seek to contain). Is one ‘better’ than the other? Does one have primacy? What about time it takes to process against the already enormous BTC blockchain?
What does it mean
The above discussion is a gross simplification of many interacting issues. The BTC vs BCC ‘competition’ is about the future of bitcoins and how you use them. But it is also about more than bitcoins. Because it introduces the concept of parallel distributed ledgers a whole new raft of questions will emerge. For sure it is confusing.While Bitcoins themselves may not be of great interest to enterprises (except for ‘investing’, though ‘gambling’ might be more accurate), the bifurcation into BTC and BCC blockchains will produce unforeseen issues that may challenge the whole blockchain concept. For an analogy, take Brexit. Leaving the EU is simple, ‘just a matter of agreeing a date’. Except it isn’t. The act of exercising Article 50 has opened a diverse series of complications, details and philosophical positions which few seemed to anticipate.Distributed ledger adoption should benefit from the BTC/BCC bifurcation, from watching what occurs. That is if BCC survives long enough, and obtains sufficient take up to deliver any lessons. Watch but not too closely!BTC vs BCC: confused? was last modified: August 1st, 2017
by Charles Brett
Source :- https://www.enterprisetimes.co.uk/2017/08/01/btc-vs-bcc-confused/
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