There were negative consequences when Ethereum Classic split from Ethereum and when bitcoin split into Bitcoin proper and Bitcoin Cash. And when the latter split into Bitcoin Cash ABC and Bitcoin Cash SV, history repeated itself.
Where Bitcoin Cash SV started
Bitcoin Cash SV is an offshoot of Bitcoin Cash, a fork of bitcoin. And, as with the Cash split from Bitcoin, the critical issue was block size.
The Bitcoin split occurred because most miners felt it was unnecessary to increase the block size from 1 megabyte to 8, and the "reform team" led by Roger Ver disagreed.
Even though the block size in BCH increased again (up to 32 megabytes), the situation repeated itself. The creators of the Bitcoin Satoshi Version (community leader Craig Wright impersonates Satoshi Nakamoto) increased the block size to 128 MB. In general, the roots of the conflict lay not in disagreements on technical issues but in the confrontation of personalities.
Confrontation of leaders
It is pointless to talk about the confrontation between ABC (now eCash) and SV outside the context of the confrontation between the leaders of these forks - Roger Ver and Craig Wright. And both of these comrades are well-known and highly scandalous personalities.
Roger Ver, who has been at the helm of Bitcoin Cash since its separation from bitcoin, spent the lion's share of his time attacking Bitcoin Core on a variety of media platforms - on social networks, in the media, during his speeches at conferences and trainings, and so on. At times, it even felt like he cared more about mud-slinging BTC than promoting his product.
Craig Wright, however, is an even more ambiguous character. It's enough that he pretends to be Satoshi Nakamoto, the creator of Bitcoin, whose identity is still unknown.
At some point, these guys chased each other on all platforms: from Twitter and Reddit to crypto-bloggers' channels on Youtube, and poured dirt on each other. Moreover, Ver played an unfamiliar role of the defending party - Wright mainly attacked the competitor. Which is quite logical, given the deplorable situation on other fronts of the confrontation.
BSV could not boast of well-thought-out technical solutions at the initial stages:
- There were also questions about the idea of a 128 MB block - the Bitcoin Cash ecosystem did not successfully "digest" even 32 MB. And the implementation of the concept left much to be desired.
- Reports about discovered BCSV vulnerabilities appeared almost daily, and the network suffered from double-spending attacks and reorganisation attacks (transaction revocation). Accordingly, new versions with new transaction processing rules were also released like hotcakes.
- In general, there was an impression that Wright and his team did not want to release a successful crypto but to rub Roger Verus' nose in it. However, the BCABC developers were doing the same thing.
As of 2023, when the "war of forks" has long since ended and the situation stabilised, we can conclude that both coins are pretty in demand, have pros and cons and have users who trust them. BSV has a higher rate and capitalisation, but there is one disadvantage - the leading crypto exchange Binance still needs to add it to the listing, unlike its competitor.
Confrontation of networks
Initially, SV looked like a clear outsider. The "battle for hashrate" was won by ABC.
This has already provided the Vera project with a reasonably reliable defence against double-spending, as stated by independent parties. For example, the Huobi exchange team.
In addition, on most trading platforms the BCH designation went to Bitcoin Cash ABC, which provided the Vera project with a severe marketing advantage. BCH is a familiar and recognisable designation, but Wright and his team had to make a lot of effort to promote BSV.
Some sites added the coin "in automatic mode", crediting those with BCH on deposit with a similar amount of BSV. But at the same time they warned about the excessive riskiness of the coin. Thus, Kraken's management stated that although the coin was added, it did not meet the listing requirements and recommended clients refrain from working with it. Speculators were not stopped by this, but it was a very unpleasant call.
The information about the attempts of its supporters to attack ABC network did not contribute to the growth of SV's reputation. And the attack was unsuccessful.
Consequences for the market
Hardforks of market leaders have always caused a drop in quotes, but the "splits" of ether and bitcoin occurred during the crypto's growth. This significantly reduced losses, as the market quickly recovered and the fall was lost against the background of further development. But the Bitcoin Cash split occurred terribly: the crypto market was in stagnation after a long fall. This is even though crypto usually grows at the end of the year.
In such conditions, the BCH hardfork news became a painful "kick" that pushed the quotes down again.
The situation was complicated because most of the whales (large holders) of BCH are also among the largest holders of BTC. So the main cryptocurrency was caught, not only because its fork split but also because the state of its whales was in danger. And then the chain reaction began - bitcoin, as usual, pulled the entire cryptocurrency market with it.
How it all ended
As of June 2023, the comparative performance of competing coins BSV and XEC (eCash, formerly BCABC) is as follows:
- BSV — $39.17, XEC — $0.00002617
- Market capitalisation of BSV — $714,542,969, XEC — $507,091,855
- BSV network hashrate — 570.97 PH/s, XEC — 293.83 PH/s
It turns out that the "toxic" fork ended up being the leader, except that it is not backed by the Binance exchange (otherwise, its performance could have been even better).