Poloniex, a cryptocurrency exchange managed by Circle, launched a “pre-fork” experimental market on Bitcoin Cash, as a preview of the expected fork that will take place later this month, specifically on the 15th.
The market behavior shows that users are clearly favoring Bitcoin ABC, which is the most established, or familiar version of the software. Thanks to the technical design of Bitcoin Cash, its users need to either “hard fork” the blockchain or implement another alternative.
That alternative comes in the form of a newer software version in which open-source developers decide what changes to implement two times a year (once every six months.) Said software is called Bitcoin SV. The result of the situation would be a hard fork in which two cryptocurrencies that compete with each other are born.
Circle, which is a blockchain startup with the backing of Goldman Sachs, administrates the Poloniex exchange, which launched representations of both versions of the software including the not-yet-public Bitcoin SV.
Four Times Higher
Users opted, in the vast majority, for the Bitcoin ABC. In fact, it was trading at a value four times higher than that of Bitcoin SV. The “pre-fork” trading was designed with the intention of keeping things neutral in the days prior to the Bitcoin Cash upgrade.
A theoretical market is a useful tool to find consensus regarding technical aspects of specific developments, and it is not the first time it has been applied in the crypto industry. In this case, Poloniex is helping people make their minds while showing the possible tendencies of the market.
If both software are indeed introduced, the theoretical market can help people determine which option has more widespread support over the other.
The exact numbers have BCHABC trading at $465 and BCHSV at $109, 4.2 times higher. The amounts are expressed in Poloniex’s stable coin USDC. BCH’s price is $596 on Poloniex at the time of this writing.
Trading volume is small even though the pre-fork trading has been available for more than 12 hours because it can be performed only by those people with intentions of converting their BCH in either BCHABC or BCHSV.
Deposits associated with BCHABC and BCHSV, as well as withdrawals, will only be available after the fork has occurred, after November 15th. Poloniex explains that, even then, both forks are not guaranteed to be “economically or technically viable.” If people engage in pre-fork trading, they are doing it “at their own risk,” with the possibility of one of the two chains’ value “drops to zero.”
Bitcoin Cash (BCH) is currently the fourth largest cryptocurrency. It has a market cap of $10,027,340,406 USD, an $817,347,455 trading volume in the last 24 hours, and a $17,447,650 BCH circulating supply.
The Feud is On
Craig Wright, a widely known personality in the Bitcoin Cash world, does not want to compromise and seems prepared to take his struggle to the last consequences. His company, nChain, is the one running the software of Bitcoin SV (Satoshi Version.) The hot debate looks likely to result in two different cryptocurrencies.
Wright seemed to back up miners to “kill off” Bitcoin ABC’s blockchain, and they can certainly force a stoppage in transactions in the BCH ecosystem. Since there are no rules that could prevent such a scenario from happening, it remains to be seen if the “threats” hold true.
By Andres Chavez