Breaking: Bitcoin Cash Network Glitches After Undergoing Scheduled Hard Fork

Francisco Memoria

Final update 17:53 UTC: The Bitcoin Cash blockchain appears to be processing transactions normally. Most blocks found since the last update and include a few hundred transactions in them, with most having been processed by BTC.Top. It's believed the network is now reasonably safe once again.

Update 17:06 UTC: Two block with over 2,500 transactions combined has been mined. The BCH blockchain currently has blocks that could grow to as mcuh as 32 MB if needed, meaning the blockchain can easily clear the mempool it build up during the glitch. Available data shows the size of BCH's mempool dropped sharply after the block was mined.

BCH's mempool is clearing

Update 16:46 UTC: The BCH blockchain has seemingly started processing transactions once again. BTC.Top has recently mined a block that included 89 transactions, and an unknwon miner quickly managed to mine another block that included over 130 transations. This could mean BCH's developers applied a patch that fixed the issue.

BCH blocks with txs are being mined

Bitcoin Cash Blockchain Temporarily Struggled

After going through a planned update this Wednesday, May 15, 2019, the Bitcoin Cash network stopped processing transactions for various blocks, over what some were claiming to be an issue with the Bitcoin ABC client. The cryptocurrency's blockchain has since started processing transactions again.

According to Coin.Dance data, most blocks on the Bitcoin Cash blockchain mined after the hard fork were only processing the coinbase transaction, meaning unconfirmed transitions were piling up on the network and users weren't able to transact.

Bitcoin Cash's 1 transaction blocks

Behind the problem, according to a Reddit thread, was an “issue” with Bitcoin ABC, a client most cryptocurrency miners are running, that was  stopping transactions from being processed. The issue, first spotted by BitMEX Research, could be unrelated to the scheduled hard fork.

On social media, some users have argued miners were processing empty blocks to avoid processing transactions that could be malicious, or that could be rolled back while the network was facing technical difficulties.

BCH’s mempool , since the hard fork upgrade, started adding large transactions (in terms of data) to it, which could suggest someone was indeed trying to take advantage of the situation. Bitcoin Cash’s core developers reportedly worked on fixing the problem as soon as possible.

According to BitMEX Research, Bitcoin Cash split into two blockchains, meaning a new cryptocurrency has been created. A hard fork is known as an upgrade that isn't backwards compatible, which means those who don't upgrade their software end up forking off of the main chain.

According to Cornell University Professor Emin Gün Sirer, the BCH network wasn't processing transactions as it came “under attack,” thanks to an “old bug in block template creation.” Gün Sirer added that someone spent “months sitting on this bug,” but only chose to exploit it now, during the network upgrade.

Meanwhile, cryptocurrency exchanges started to react to the problem, with Poloniex revealing it has disabled deposits and withdrawals in the cryptocurrency in the meantime.

The cryptocurrency, which was created through a hard fork of the Bitcoin network in August of 2017, recently made headlines as it was outshining the wider crypto market rally this week. The hard fork, which added Schnorr Signatures to optimize the blockchain and added SegWit recovery, is believed to have helped its performance.

It’s worth noting that on November 15, 2018 the BCH network underwent a hard fork that led to the creation of Bitcoin Satoshi’s Vision (BSV).

Ampleforth Seeks to Become the Perfect Digital Asset for Portfolio Managers

A new token is seeking to change up the existing paradigm in the cryptoasset market.

Billing itself as “smart commodity money” - a token that has the benefits of commodity-monies like gold and silver, but can respond efficiently to changes in demand - Ampleforth is keen to emphasize that its token represents a new kind of asset in the space.

The Evolution of Money 

Money has been reinvented many times over: for many centuries mankind did without it, instead simply assigning value to particular goods in exchange for other goods. Then gold and silver formed the basis of money, whether coins were made directly out of these precious materials or "stamped" as a standard into baser metals.

Indeed, gold as a standard for global money transfer lasted for many centuries: the official gold standard was dropped by Britain and the US in the early 1930s and by 1971 the system was abandoned completely to be replaced fully by what we now call the fiat money system where global currencies (to a large degree) freely float against each other on foreign exchange markets.

The Crypto-Evangelists

Niall Ferguson is an expert in this field and, as an Oxford and Harvard lecturer, has written and spoken about money and capital many times. He may be a little late to the crypto party but is none-the-less evangelical about it: in a Bank of England seminar last year he called cryptocurrencies "the financial system of the future".

Ferguson has now thrown his weight behind the Ampleforth Project, which - on June 13 - raised $4.9 million in 11 seconds in its initial exchange offering (IEO) of its "Ample" (AMPL) tokens.

The digital asset explains in its white paper that it’s a "synthetic commodity" that aims to become truly uncorrelated from both traditional assets, stocks and currencies as well as from Bitcoin, other cryptoassets and other synthetic commodities. The problem with existing synthetic commodities, the paper explains, is that they have so far failed to do both. 

Ampleforth Explained

While Ampleforth seeks the price target of $1 for the Ample, instead of pegging directly to the dollar - like Tether - or to a basket of fiat currencies - as Facebook's Libra intends - the Ample will allow the quantity of assets a user holds to fluctuate, in addition to price, as it seeks a price supply equilibrium.

The system's protocol will actively seek this equilibrium by either proportionally increasing the quantity of tokens every user holds when prices climb, or proportionally decreasing the quantity of tokens every user holds when prices fall.

This is called money supply and has been one of the tools used by central banks to control inflation for many years. But Ferguson's criticism of this - in his book The Ascent of Money - is that it reflects human sentiment too much:

Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.

Ampleforth seeks to overcome these problems algorithmically by applying countercyclical pressures that dampen volatility, encouraging markets to self-correct. Supply updates will be freely visible in the market ahead of any changes, allowing the market to anticipate these changes and respond accordingly.

Ferguson explains his enthusiasm for the project:

The ingenious thing about Amples is that this they are not stablecoins, pegged in some way to existing fiat money. They are a special kind of digital asset, the quantity of which varies in response to the behavior of investors and traders.

Crypto Rivals

Ampleforth is unlikely to challenge Bitcoin any time soon as the number one crypto investment, but offers a compelling three-stage plan for the use of Amples. 

In the near-term, the token’s lack of correlation to both traditional assets and Bitcoin, will make it a useful portfolio diversifier. 

In the more medium-term, Amples may be used as reserve collateral in decentralized banks, such as Maker DAO.

Ultimately, the long-term goal however, is that Amples will serve as an independent alternative to central bank money. The team describes it as a “macroeconomically friendly” Bitcoin that averts the deflationary problems associated with fixed supply commodities when used as reserve collateral by banks.

Ampleforth Moves Forward

Such was the success of its first token sale on Bitfinex, that Ampleforth is conducting a second round of funding on the same exchange on Thursday.

The company aims to raise close to $7 million in this IEO, with a maximum contribution per investor of $7,060 and a minimum of $28, with each Ample token worth $0.98.