Did the block three blocks ago cause a fork? Are we just waiting for someone to mine a Bitcoin Cash block on top of this block and then there’ll be a fork?
EDIT: Here's the log from a Bitcoin ABC node I have running:
2017-08-01 13:23:36 ERROR: AcceptBlock: bad-blk-too-small, size limits failed (code 16) (block 00000000000000000019f112ec0a9982926f1258cdcc558dd7c3b7e5dc7fa148)
2017-08-01 13:23:36 ERROR: ProcessNewBlock: AcceptBlock FAILED
2017-08-01 13:23:48 ERROR: AcceptBlockHeader: block 00000000000000000019f112ec0a9982926f1258cdcc558dd7c3b7e5dc7fa148 is marked invalid
2017-08-01 13:23:48 ERROR: invalid header received
2017-08-01 13:24:06 ERROR: AcceptBlockHeader: block 00000000000000000019f112ec0a9982926f1258cdcc558dd7c3b7e5dc7fa148 is marked invalid
2017-08-01 13:24:06 ERROR: invalid header received
[ ... last two lines repeat ... ]
EDIT2: Here's the code . The block was rejected by Bitcoin ABC/Cash because it was smaller than 1 MB.
Now the BCC miners are actually working on producing the first BCC-only block, which will be block 478559 on the BCC chain and will be different from block 478559 on the BTC chain, hence effectively splitting the chain.
Since BCC has only a tiny fraction of BTC's hash rate (around 1% by most estimates, although it's pretty hard to evaluate) it will take a while for this block to be found. Probably hours, maybe even days.
Eventually the difficulty on the BCC chain will adjust, so even if the hash rate remains low the "blockrate" should steadily increase within the next few weeks. Also since BCC blocks can be 8 times as big they can fit more transactions in a single block, somewhat mitigating the effect.
I think people would abandon long before that.
In case the MTP of the tip of the chain is 12h or more after the MTP 6 block before the tip, the proof of work target is increased by a quarter, or 25%, which corresponds to a difficulty reduction of 20%.
So as long as the BCC keeps lagging behind massively (less than 6 blocks every 12h) the difficulty is reduced by 20% after every new block.
So it takes 6 consecutive blocks to be found "fast enough" (that is, within a 12h window) to return to the normal difficulty algorithm.
Furthermore if they really only wanted to slow down BCC and nothing else it still wouldn't be very efficient. They'd just postpone the scaling for the next 6 blocks and then the rule would kick in again. So they'd have to keep make sure that they're always just at the limit of 6 blocks per 12 hours... but at this point you're actually mining block and contributing to the ecosystem, so there's no problem.
Looks like though they're getting blocks now, 4 blocks in less than two hours.
It looks like 25% of the nodes in the Bitcoin network are suddenly running "Bitcoin ABC" (the implementation supporting bigger block sizes) on AWS... someone somewhere has started a bunch of (spot?) instances it seems.
Spawning nodes is cheap and doesn't really mean much.
FYI -- It's not immediately clear, but the details of how this works and the status checks are provided at the bottom of the webpage.
The most politically active exchanges, miners, and payment processors are all in favor of SegWit2x, and against the bitcoin-core developers. These are the people who are most familiar with business, who are closest to the userbase, and have to deal with the practical problems associated with running Bitcoin businesses in ways that the core developers do not. At the same time, they often miss significant security and stability risks in the changes that they propose.
A small faction of highly passionate users with relatively deep pockets and effective social media skills favor Bitcoin Cash. This group passionately distrusts the bitcoin-core developers, has a strange vendetta with the EFF-commended company Blockstream, and is the source of a large number of conspiracy theories. This is the same group that passionately backed the failed Bitcoin-XT project, the failed Bitcoin-Classic project, and the failed Bitcoin-Unlimited project. Their following I think was largest during the Bitcoin-Classic days, but at this point I think they've disenfranchised a lot of their early community members with their stubborn anti-bitcoin-core rhetoric.
A secondary concern is scalability - SegWit already increases the burden for full nodes in terms of bandwidth and storage by doubling the practical capacity of the blockchain, and quadrupling the max size if miners are being abusive. SegWit2x quadruples the practical capacity of the network, which quadruples the burden of running a full node. And attackers now have 8x the wiggle room for attacks. I don't want to dive deep into the details, but there are a lot of reasons to be concerned about this.
2. You seem to be well-informed and (which can be rare in this space) cool-headed. Any recommendations for the best readings/websites/forums/users to follow, with a high signal-to-noise ratio?
There's also a fantastic non-political reason, which is compatibility. As we know from IE6, Windows XP, outdated versions of Flash, IPv4, and lots of other things in software history, industry wide upgrades take a loooong time. When you hardfork Bitcoin, you are introducing a change that is only successful if 100% of people upgrade. That's a really high bar. If someone or some company does not realize that there's been a hardfork, they are sitting on an old, vulnerable chain and don't realize it. Everyone who doesn't upgrade is vulnerable to accepting payments that they think are worth 1 btc, when they are actually worth 1 btc-old, and btc-old may have a dollar value that's only a few percent of the btc price.
When you hardfork, you force everyone in the ecosystem to upgrade. This causes a lot of friction, breaks compatibility with existing software, and really reduces the value of your ecosystem substantially because you lose a lot of legacy code and hardware and systems that may no longer be compatible with the post-hardfork chain.
As for recommendations, honestly there's not much I can do to help. All the major places that I know of have been overrun by people who think they know a lot more than they actually know. There's also a lot of brigading in general, though I think the fundamental problem right now is an ecosystem-wide Dunning-Kruger effect, and I think it'll blow over once the ICO mania matures more.
If you really want some good stuff, look for anything posted to a mailing list or to IRC by Greg Maxwell. While his reddit comments are often petty, he's probably the most intelligent person in blockchain today. Take everything he says with a grain of salt, but even if you don't like him you will learn a LOT by reading everything he's posted over the past 2-5 years. Other names worth following (not a complete list, sorry to anyone I miss) would be Pieter Wuille, Peter Todd, Luke Dashjr, Eric Lombroso.
These guys don't have the deepest understanding of any of those things. The minutia of the protocol, and the source code that implements it, is extremely important, but knowledge of it does not impart one with any insights into game theory, the political implications of different decentralisation tradeoffs, and adversarial blockchain design as it pertains to political/economic attacks.
I guess a statement like yours and a counter like mine is difficult to back up with evidence, but if you look for some of the technical debates realted to SegWit, Bitcoin Unlimited, Bitcoin Classic, Emergent Consensus, etc, it's pretty obvious that the bitcoin core developers are well ahead of their opponents even in the realms of economics and politics.
Bitcoin has a lot of defenses to manipulative politics in place already, including the fact that it's intentionally very difficult to hardfork the newtork, and including the fact that releases follow a fixed schedule (which makes it much harder to shoehorn in features).
The characterization that the core devleopers focus primarily on code and traditional software engineering falls far short of the reality.
>The characterization that the core devleopers focus primarily on code and traditional software engineering falls far short of the reality.
That wasn't my characterisation. I disputed your characterization of the Core contributors being the most knowledgeable on these game theory aspects of security based on their contribution to the source code.
The split happened because people have very different ideas on how Bitcoin should scale (transactions per second).
SegWit supporters think that most transactions should happen off the blockchain (in something like Lightning network), which then settle on the chain. They also talk about increasing the block to 2MB (SegWit2X), but I'm not sure that will happen.
Bitcoin Cash instead extends the block size from 1MB to 8MB (and probably more in the future), allowing all of the transactions to exist on the chain.
What it means for the price is not clear, and if someone tells you they know where the price will go, they are just guessing. As we are speaking, Bitcoin price is crashing a bit (currently at $2695). Bitcoin Cash is valued at around $293.
One thing we know for a fact is, if you owned bitcoins prior to the fork, you will get the same amount of SegWit and Cash varieties.
I want to point out that here "owning" means actually having the coins on one of your personal addresses whose private key you own. If your coins are hosted on an exchange or any kind of 3rd party wallet nothing is guaranteed (unless said exchange explicitly announced that they would let you trade your BCC).
So am I dumb for not having bought some Bitcoins prior to the split, and getting free "money"?
Of course a) the two BTC variants won't have equal worth and b) participants in the BTC economy have neither perfect knowledge nor total rationality (the level of rationality in the BTC ecosystem has been much debated over recent years as we all know) so the actual outcome may differ from the 'perfect' one, but the likelihood is that values will converge over time to the outcome that the value of BTC1+BTC2 post split is equal to the value of BTC pre-split, plus or minus any gains/losses along the way (which may include a reputational loss or gain based on how well the split goes).
The overall value may go up, but you may also see the cost of BTC drop by the value of BCC (like when a dividend is paid on a stock).
BCC could also lose adoption, and lose value significantly.
Note I follow CC a little bit more than casually, no expert and I'm not sure what the GP means exactly by this statement.
Also to sell 8mb bitcoins, a >1MB mined block will have to be accepted by the network which may not happen for hours or days. There is a schedule for difficulty changes but there's no telling how long it will be before they are actually tradable.
UAHF specs that the fork happens after the 1st >=1MB block is mined.
But it looks like the "fork" is already happening, because Bitcoin Cash network rejected block 478559, and now has to mine one of its own.
2017-08-01 13:23:46 ERROR: ContextualCheckBlock: BUIP055 fork block (00000000000000000019f112ec0a9982926f1258cdcc558dd7c3b7e5dc7fa148, height 478559) must exceed 1000000, but this block is 272502 bytes
2017-08-01 13:23:46 ERROR: ProcessNewBlock: AcceptBlock FAILED
2017-08-01 13:23:46 Invalid block due to bad-blk-too-small
2017-08-01 13:23:53 ERROR: AcceptBlockHeader: block 00000000000000000019f112ec0a9982926f1258cdcc558dd7c3b7e5dc7fa148 height 478559 is marked invalid
I would say that the split will happen because the Bitcoin Cash have enough firepower (e.g. marketing, business) to diverse the attention to them since these forks could have been possible for long time. It is not a coincidence that these days are important for the SegWit2x and UASF projects too.
So if you spend coins on one chain, it may automatically occur also on the other chain.
> How is transaction replay being handled between the new and the old blockchain?
Bitcoin Cash transactions use a new flag SIGHASH_FORKID, which is non standard to the legacy blockchain. This prevents Bitcoin Cash transactions from being replayed on the Bitcoin blockchain and vice versa.
Logically SW BTC should go down (and it has) and 8MB BTC should have value cut out of it, but with ethereum and now it seems the sum of both parts is greater than the whole before the fork. BCC futures market up about $100 since this morning on more than double yesterday's volume. SW BTC down a couple hundred but added together they are at $3,168 at time of this comment.
1) The main chain's rate of block generation has not dropped substantially. Of course, it's hard to tell in such a short timeframe, but at least according to https://bitcoinwisdom.com/bitcoin/difficulty not much is happening.
2) No BCH blocks have been mined in the past 2.5 hours. This could be variance (even with 100% of the hashrate this sort of gap is plausible), but I suspect not.
EDIT: It would probably be faster to determine the speed of the Cash fork by noticing the reduction in hash rate on the main Bitcoin network.
If you sell your bitcoin segwit today for bitcoin cash at an exchange, the rates are around 0.08-0.12, it is like inflation.
The old Bitcoin is very clearly favored in the markets, and has the most active userbase. A better title might be 'Bitcoin Cash creates their own version of the Bitcoin network with a shared history and bigger blocks.'
Submitted title was "Bitcoin forking to Bitcoin Cash with a higher block size". That breaks the HN guidelines, which ask "Please use the original title, unless it is misleading or linkbait."