Bitcoin Cash (BCC or BCH), the software protocol that on August 1 split off from the legacy Bitcoin (BTC) blockchain, is about to experience its first hard fork.
Yesterday developers behind one of the Bitcoin Cash clients, Bitcoin ABC announced that they would release a new software version “on or before November 1”. The update aims to improve the way the network’s mining difficulty is adjusted.
Originally, Bitcoin Cash’s algorithm relied on a rule called Emergency Difficulty Adjustment (EDA), which allowed for the difficulty to be dynamically adjusted down in order to entice miners on the legacy blockchain to switch sides. However, the developers now believe that this method is no longer beneficial to the BCH network.
“The original Bitcoin Cash “EDA” allowed Bitcoin Cash to survive as a minority chain but produces wild fluctuations of hashrate,” the statement by Bitcoin ABC reads. “This is problematic because it prevents consistently fast confirmations for users, and radically shifts the coin issuance schedule.”
The new algorithm will be based on a 144-block moving average, meaning that the difficulty will be adjusted on each block, based on the amount of computing power provided to the network over the previous 144 block. The developers hope that this new method would allow difficulty adjustments to reflect real-time market activity more accurately.
The change will not activate until November 13, giving enough time for service providers such as exchanges and wallets to upgrade their software before the event. The developers said that they had been in communication with Bitcoin Cash miners, who “are expecting this update”.
In today’s trading, the Bitcoin Cash price stood at $442.37, as of 11:42 GMT. The cryptocurrency has lost just over 4% of its value over the past 24 hours.