On November 15, 2018, the Bitcoin Cash (BCH) network will undergo a scheduled protocol upgrade. This protocol upgrade has been different to previous upgrades due to differences in opinion as how best to evolve the Bitcoin Cash network to continue to meet the demands of enterprises and consumers who support Bitcoin Cash. We have developed Bitcoin SV, a new full node implementation for Bitcoin Cash, designed to support the original “Satoshi Vision” of Bitcoin. We are asking BCH miners to vote for the Bitcoin SV implementation over competing implementations (such as Bitcoin ABC) using their hash power under Nakamoto consensus rules.
As the November 15 date nears, we provide exchange operators and wallet providers this update about Bitcoin SV and the protocol upgrade’s short-term material impact on their operations.
What is Bitcoin SV?
With Bitcoin SV, we are not seeking to create a new Bitcoin variant and we are not intending to create a new Bitcoin SV token. Instead, Bitcoin SV merely gives BCH miners another choice of implementation (competing with Bitcoin ABC and other existing BCH implementations) for miners who want to support the original Satoshi Vision for Bitcoin. As set forth in the original Bitcoin white paper, it is up to miners’ voting with their hash power (the Nakamoto consensus mechanism) to decide rules for the network.
What Will Happen After the November 15 Protocol Upgrade?
- A temporary Bitcoin Cash chain split is imminent on November 15th between Bitcoin SV and Bitcoin ABC. (Bitcoin Unlimited, another key BCH implementation, intends to remain neutral and be compatible with both Bitcoin SV and Bitcoin ABC rule sets, as a configurable option.)
- There will likely be a period of time before this temporary chain split is resolved, while miners are voting with their hash power.
- Significant miner hash power (over 40% of the current BCH hash total) is supporting Bitcoin SV. Therefore, the Bitcoin SV consensus rules stand a very strong chance of becoming the dominant implementation on the BCH blockchain.
- No transaction replay protection is in place on Bitcoin ABC or Bitcoin SV.
Which Chain Should be Recognized as Bitcoin Cash?
We believe that exchanges, as well as other BCH business operators, should recognize as Bitcoin Cash (and the ticker symbol BCH) the longest chain with the most legitimate, sustained Proof of Work. The Nakamoto consensus procedure is how Bitcoin’s decentralized system is meant to work, rather than leaving the Bitcoin Cash name and BCH ticker symbol forever in the control of any group(s) who may have initiated it or claim to control it.
We do not ask exchanges to pick a side between Bitcoin SV, Bitcoin ABC or other implementations. In fact, exchanges should remain neutral because their function is not to decide the technical roadmap for Bitcoin Cash or choose between implementations of BCH.
Exchanges: What Should They Do Before the November 15 Protocol Upgrade?
- Immediately install a Bitcoin SV node: We highly recommend that exchanges immediately install a Bitcoin SV node to be prepared in the case that SV becomes dominant so that exchanges can continue Bitcoin Cash trading with minimal delay and disruption to users.
- Consider suspending BCH deposits/withdrawals. Neither Bitcoin SV nor Bitcoin ABC have implemented transaction replay protection, as the intention is for only one chain to survive. We recommend that exchanges evaluate risks and consider, as a precaution, whether to suspend Bitcoin Cash deposits/withdrawals until one chain emerges as dominant. If exchanges continue to operate during this period, it is highly recommended that transactions continue to support existing consensus rules and are broadcast to both chains until such time a dominant chain emerges.
Wallet Operators: What Should They Do for the November 15 Protocol Upgrade?
- Immediately install a Bitcoin SV node. We highly recommend that BCH wallet operators also immediately install a Bitcoin SV node to be prepared in the case that SV becomes dominant to avoid disruption to users.
- Notify Users of Possible Delays. It would be prudent to notify users that they may experience some delays in sending and receiving BCH after the protocol upgrade and resulting hard fork.
- Risks of Wallets Accepting DSV Transactions. Bitcoin.com has announced intention for its wallet to run the new Bitcoin ABC v 0.18.2 client after the protocol upgrade and before one chain emerges as dominant. The new Bitcoin ABC client adds a controversial new OP_code (OP_DATASIGVERIFY). In its official statement posted November 2, 2018, Bitcoin.com stated that “All services on Bitcoin.com” will send BCH originating from an output using the new OP_code. We understand Bitcoin.com may be updating its statement to either correct or more explicitly specify whether its wallet service will continue to broadcast transactions without the new OP_code during the upgrade. Our recommendation remains that all wallet services should support existing consensus rules, which will ensure transactions are supported by both chains until a dominant chain emerges. Wallet operators who run Bitcoin ABC 0.18.2 and include this contentious OP_code as default run a real risk of users losing their funds if the chain supporting OP_DATASIGVERIFY does not eventually survive.
The Bitcoin SV project is committed to the success of Bitcoin Cash and fulfilling the original Satoshi vision for Bitcoin. Our team members stand ready to answer any questions you may have. Please email email@example.com with any questions.