Bitcoin Cash (BCH), consistently one of the top 30 cryptocurrencies by market capitalization and the most prominent of the many different Bitcoin forks, had its own fork on Nov. 15, 2018, splitting into Bitcoin Cash and Bitcoin SV.
Through the process of hard forking, the original cryptocurrency, Bitcoin Cash, remained in place and continued to follow its previous protocols. At the same time, a second currency, Bitcoin SV, emerged. SV stands for “Satoshi’s Vision,” a reference to Bitcoin developer Satoshi Nakamoto.
Key Takeaways
- Bitcoin Cash forked into Bitcoin ABC and Bitcoin SV in November 2018.
- In the world of blockchains and cryptocurrency, a “hard fork” occurs when an existing blockchain splits into two.
- The original fork maintained its protocol and ledger, while the new fork implemented certain policy changes, upgrades, or technical differences.
- After a blockchain fork, any wallet with the original cryptocurrency will generally have equal amounts on both networks.
What Is a Hard Fork?
A hard fork is a protocol upgrade to a blockchain network that is incompatible with older versions of the software. This is different from a soft fork, where older versions are able to interact with the new protocol. Since a hard fork rejects any block that still uses the old rules, a hard fork effectively creates a new blockchain, network, and cryptocurrency. Any wallet address with a balance at the date of the fork will generally (but not always) be given equal amounts of cryptocurrency on both networks.
Typically, a hard fork occurs when groups of miners and developers cannot agree on updates to the software behind a particular digital token. As a result, one group continues to operate under the same rules while the other branches off and generates a new blockchain and digital currency. Hard forks can also occur as a result of a planned and agreed-upon protocol change.
Circumstances Behind the Bitcoin Cash Hard Fork
The Bitcoin Cash hard fork of 2018 was the result of building tensions among developers. As tensions rose, developers and miners within the BCH community increasingly moved toward supporting one or the other of two prominent personalities involved in Bitcoin Cash, Roger Ver and Craig Wright. Ver and Wright were both known as strong supporters of digital currencies, but they were unable to reach an agreement about how to proceed.
The hard fork to create Bitcoin SV was motivated by the desire to increase the block size limit from 32 MB to 128 MB. Block size limits are important because the size dictates how much information can be packed into a block. Blocks can be thought of as cells in a spreadsheet that can only contain a certain number of characters. By increasing this limit, developers believe more transactions can be inserted into a block, which theoretically should decrease the blockchain’s processing times.
The faster a blockchain can process transactions, the lower the fees paid to participants can go. Additionally, faster blockchains are thought to be more appealing to users because they reduce the network lag between transactions, validation, and receiving funds.
Because the developers and community could not agree on whether increasing block size limits was worthwhile, one side created a fork, and the other continued operating as it had.
People Involved in the Bitcoin Cash Hard Fork
Roger Ver, known as “Bitcoin Jesus” for his early and outspoken evangelism on behalf of the leading digital currency, supported the original Bitcoin Cash rather than the proposed hard fork.
Wright, who has claimed to be the pseudonymous Satoshi Nakamoto on numerous occasions, believed that the BCH software should expand the maximum block size from 32MB (megabytes) to 128MB. Wright argued that this change would be more in keeping with Satoshi’s original idea for Bitcoin; thus, the nickname “Satoshi’s Vision” was born.
Since 2016, Wright has sued Bitcoin developers several times for copyright infringement, trying to obtain intellectual property rights for the Bitcoin blockchain. In February 2024, the Crypto Open Patent Alliance (COPA) sued Wright for falsely claiming to be Nakamoto. When the hearing concluded in March 2024, the judge agreed with COPA, declaring that overwhelming evidence against Wright’s claim had been presented.
Bitcoin Cash Itself Is a Hard Fork
Bitcoin Cash forked from Bitcoin in 2017. This split was motivated by philosophical and technical disagreements about the most effective way to increase the currency’s transaction limits. Bitcoin Cash proponents, including Jihan Wu, Craig Wright, and Roger Ver, argued that the easiest way to scale upwards would be to increase the size of a block–thereby allowing faster and cheaper transactions, but increasing the storage costs for network nodes.
On the opposing side, small block proponents like Blockstream advocated for smaller blocks, with small transactions handled in off-chain solutions like the Lightning Network. Since the two sides could not agree, the large-block side used a hard fork to create a separate version of Bitcoin, although they failed to attract a majority of the original network’s nodes or miners.
Is Bitcoin Cash a Hard Fork?
Bitcoin Cash forked from Bitcoin in 2017 after developers and the Bitcoin community disagreed on which direction Bitcoin changes should take the blockchain.
When Was Bitcoin Cash Forked?
Bitcoin Cash forked from Bitcoin in 2017. It forked in 2018 into Bitcoin ABC and Bitcoin SV, but kept the name Bitcoin Cash. In 2020, it forked again into Bitcoin Cash and Bitcoin Cash ABC.
Which Crypto Is a Hard Fork From Bitcoin?
Bitcoin has had many different hard forks over its short lifetime. Some of the most well-known are Bitcoin XT, Bitcoin Cash, Bitcoin Gold, and Bitcoin SV.
The Bottom Line
Bitcoin Cash is a blockchain and cryptocurrency payment system that was created by hard forking the Bitcoin blockchain. Bitcoin Cash underwent its own hard fork in 2018, creating Bitcoin ABC (it was still Bitcoin Cash) and Bitcoin SV.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author owns BTC and XRP.
