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Digital currencies
Tech

Bitcoin cash “hard fork”: everything you need to know about the latest cryptocurrency civil war

  • Bitcoin cash, the world’s No. 4 cryptocurrency, split into two separate entities on November 16, highlighting fundamental disagreements in the community
  • Bitcoin tumbled below US$6,000 to its lowest level in over a year

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Bitcoin cash is about to go through a “hard fork” amid warring cryptocurrency factions. Photo: Handout
Zheping Huang

Imagine you have a dollar in your wallet, and you put it aside for a while and then realise that one coin has split in two. Sounds weird? Not in the cryptocurrency world.

Bitcoin cash, the most successful bitcoin offshoot, split into two distinct entities on Friday, just over a year into its existence. Behind the split are long-standing, fundamental disagreements about how bitcoin should operate and what purposes it should serve – arguments which are tearing the cryptocurrency community apart. It’s an episode full of tension, public spats, and wild price fluctuations that some have described as a “crypto civil war”.

Here’s all you need to know about the split, known as the bitcoin cash “hard fork”.

What is bitcoin cash?

Bitcoin functions like a software program, but unlike Microsoft Office, there’s no single entity who determines how it should be updated. Over the past few years, the bitcoin infrastructure has been struggling to handle a surge in transactions and community members have come up with various options to solve the backlog. Most of the time, these new updates coexist with each other. An analogy would be that you can use Microsoft Word 2016 or 2013 or 2000 to access the same document, although some functions may not be available in the older versions.

But bitcoin cash is like a new version of Microsoft Word, which generates documents that can no longer be opened via the older versions. In August 2017 bitcoin cash emerged from the original bitcoin in an event known as a “hard fork”. At the time of the fork, anyone who owned bitcoin also inherited an equal amount of bitcoin cash.

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