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A coin was born today: First block of Bitcoin Cash mined

THE FIRST BLOCK of a brand new cryptocurrency Bitcoin Cash (BCC) was mined at 6.32pm UK time on 1 August.

BCC is the result of a ‘hard fork’ of the Bitcoin blockchain caused by a disagreement among different groups of miners about the best way to scale.

Bitcoin Cash has a maximum block size of 8MB, compared to 1MB in the Bitcoin blockchain, which will allow for faster transaction processing speeds. Bitcoin itself will proceed with a different incompatible scalability strategy called Segregated Witness or SegWit.

So, the hard fork has resulted in two separate blockchains and two separate currencies, and anyone lucky enough to be holding one bitcoin (currently worth $2,700) now also holds one BTC worth around $300 (although that value has been fluctuating wildly throughout the day)  – but only if they also hold their private key.

Some cryptocurrency exchanges, such as Coinbase, refuse to support BCC, figuring that it may melt away if not enough miners support it and that anyway it’s not worth their while changing their systems to accommodate it. Coinbase does not give account holders access to their private key – meaning no free crypto-cash for them.

In response there has been massive exodus of Bitcoin from such exchanges and into offline wallets and services where users can control their private key. Due to this rush to hit the 1 August deadline it has been difficult for users to deposit or withdraw funds from the exchanges, with many punters experiencing nail-biting delays of hours or days in the confirmation of their Bitcoin transactions.

Some services like the Exodus wallet have told users they will not support BCC but nevertheless “users of Exodus will still be able to claim their BCC by importing their private keys into the official BCC client after Aug 1st.”

In the event, the first BCC block was mined hours later than expected. The delay may have been due to of a lack of miner support for the new cryptocurrency according to Iqbal Gandham, UK managing director at online trading and investing community eToro.

“What this really meant is that at some point after this time the very first block of the new chain supporting BCC would get mined,” he said. 

“However the time it takes to mine that first block is all a function of how much computing power is thrown at mining this block. It seems as if people overestimated the mining power, or the support from miners, hence it is taking far longer than most expected.”

Whether BCC ultimately succeeds or fails, few analyst doubt that even with SegWit, a new scaling crisis for Bitcoin and possibly Bitcoin Cash too is probably not too far away, particularly if prices continue to skyrocket. μ

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