A hardfork is a change to the bitcoin protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade. An alteration which changes the block structure of the chain including block hash, or increases the set of valid transactions is a hardfork. If users do not all agree on the upgrade then a new coin will be produced with a new blockchain. The appended You Tube video explains what a hard fork is. It uses the creation of bitcoin cash as an example. It also explains the difference between a hard fork and soft fork.
The creation of bitcoin cash
In mid-2017 some developers were not satisfied with the changes planned to the bitcoin code and as a result on August 1 of 2017 they split the bitcoin blockchain in two forming bitcoin cash while bitcoin carried on with the original suggested changes.
A list of bitcoin hard forks can be found at this site: Bitcoin Cash: Forked at block 478558, 1 August 2017, for each bitcoin (BTC), an owner got 1 Bitcoin Cash (BCH).
The appended video from early August of 2017 describes the birth of bitcoin cash. Since that time, the coin has done much better than the person on the video predicted although it comes nowhere near the price of bitcoin.
Among the main changes bitcoin cash made to the bitcoin blockchain was an increase in the maximum block size to 8 megabytes from one. The transaction signature hashing algorithm was changed so that it prevented replay protection for bitcoin cash transactions from the original chain. Finally, the original bitcoin difficulty algorithm (adjusted ever 2016 blocks) was replaced with a new emergency difficulty adjustment (EDA) algorithm. This was designed to respond more quickly to any drastic drops in the hash rate that might happen after the fork.
The new proposed changes to the bitcoin cash protocol
Some of the new changes are quite radical. The size of the block will change from 8 MB to 32 MB. This will allow vastly more transactions per block. Some of bitcoin cash’s seasoned developers have suggested that moving ahead too fast with the changes could jeopardize the situation where the market cap of bitcoin cash was $24 billion and a single coin was going for a little less than $1,500.
However, that viewpoint seems not to be prevalent now. Joshua Yabut , a contributor to bitcoin cash’s main protocol software implementation, BitcoinABC, said he doesn’t expect any protest when users are finally given the choice on May 14 to upgrade their software. Yabut said to CoinDesk: “Block size increases are kind of non-controversial at this point, but it’s nice to see on-chain scaling happen.”
The return of smart contracts
The developers of bitcoin cash have now added in new kinds of smart contracts. These had been stripped from the chain because of security concerns that have now been addressed. The addition of the contracts will add even more functionality to users of the bitcoin cash system.
Steve Shadders, nChain developer said: “Essentially out of an abundance of caution and lack of time to fully explore and fix the edge cases that needed to be addressed, the decision was taken to simply disable any opcodes around which there were doubts or even hints of doubts. Seven years have passed and the edge cases around these opcodes are much better understood now. Additionally, the decision to disable them was taken hastily and under duress. The [bitcoin cash] community now has had the luxury of time to address these issues thoroughly….It’s the first step for enabling smart contracts with the protocol which will allow us to compete with ethereum later on.”
Some critics of the changes
A minority of users have complained that the sweeping changes being made should have been put to a community-wide vote before being adopted. The critics complain that there has been no chance to debate on the merits of the specific changes.
However, the disagreements are not deep enough or extensive enough to cause a new coin to come into existence when the planned fork takes place.
A few critics also are concerned that data-heavy projects such as Memo a recently launched censorship-resistant social network might even require even larger block sizes.
Present price of bitcoin cash
As of 19:50 UTC April 29th the price of bitcoin cash was $1437.38 a far cry from its larger brother bitcoin but it has been doing relatively well. A weekly analysis can be found here. The low in the last 24 hours was $1,374.85 and the high $1482.43. The price is up about 2.9 percent on the day at present.