The year 2019 in Bitcoin Cash

It's vitally important that history is recorded correctly, Daniel Morgan's "The Great Bitcoin Scaling Debate — A Timeline" is still an invaluable piece, especially for latecomers. My attempt is to work my way back through history starting with "the year 2020 in Bitcoin Cash so far: a detailed history"

This article covers the most notable events of 2019 with regards to BCH chronologically starting with the BSV delistings, the may upgrade and incident(s) associated with it, the chain limit and color controversies, the november upgrade and finally the bitcoin.com exchange HEX listing. At the end follows an overview of innovations spread out throughout the year and an overall big picture view of the whole year.

BSV delistings

In response to Craig Wright threatening to sue the pseudonymous Twitter user Hodlonaut for defamation, Binance’s CEO Changpeng Zhao (CZ) announced to delist BSV. This kicked off a delisting wave mid-April with shapeshift and kraken following the initiative as part of a broader social media campaign in support of the space cat. This reaction is in stark contrast with the reaction to the lawsuits against open source Bitcoin Cash developers from the Bitcoin ABC team by Calvin Ayre (and CSW by extension), chirping crickets were hearable on social media. The existence of the lawsuit only became known with Antony Zegers’ resignation of Bitcoin Unlimited . The resignation was a direct consequence of the lawsuit by prominent BSV members which was supported by many  members of the community. Zegers wrote “The reason is that I feel Bitcoin Unlimited, as an organization, is too closely associated with the Bitcoin SV community.” and continued “The event that really decided my opinion is the lawsuit against several people in the Bitcoin Cash community, including the developers Amaury Séchet, Jason Cox, and Shammah Chancellor. These are my friends and colleagues, and using a frivolous lawsuit to target them with the force of law in this manner is despicable worthy of condemnation.” You never know what to expect in crypto but this lawsuit about the nov 15th split might be one of the weirdest events yet. The lawsuit against the Hodlonaut for calling CSW a fraud looked like an empty threat at first because of his pseudonymity (although some deranged BSVers did try to dox the account) and because it seemed a stretch, even for CSW, to actually sue over a mean comment on twitter. Over a year later and the lawsuit is actually still ongoing, now in the Norwegian court. To circle back, many BCHers saw the delistings not as a principled stand against lawsuits but as a marketing opportunity to appeal to the maximalist culture. Some supported the delistings as self-regulation of the cryptocurrency exchanges, others noted that many of the same maximalists would also be all to glad to see BCH delisted and indeed, there were many voices on “cryptotwitter” advocating for exactly that. In the end the delisting “wave” was short lived and ended after a few days and luckily didn’t spill over to BCH.

The BSV marketcap had continued to fall throughout early 2019, kicking the year of at number 9 with a valuation of roughly $90 per BSV to number 12 mid-April during the delistings. Then BSV went on to get “monero-ed” and “dash-ed” to the great pleasure of its critics to strand at number 16 by mid-May with 65$ per coin.

May upgrade+ incident

Adding a new, superior signature scheme to bitcoin has long been something the BTCers talked about. Bitcoin mainly uses the ECDSA signature as a result of a patent on Schnorr signatures because of which ECDSA was better standardized. Schnorr was also added to the Bitcoin Core "Technology Roadmap" in march of 2017. Because of this background the fact that Schnorr signatures were first implemented on Bitcoin Cash with the 4th BCH network upgrade on May 15th 2019 was the source of optimism and a sense of meaningful progress after that had been brought to a halt on BTC.

Mark Lundeberg, a developer who did much of the work for Schnorr signatures on Bitcoin Cash explains its benefits as two sided: first as a scaling improvement Schnorr allows for batch verification, secondly as a privacy improvement secret signature aggregation allows for more private smart contracts on the BCH network. He adds that adopting Schnorr signatures also lays the groundwork for future upgrades that could enable even more advanced cryptographic functions. A first of which is public signature aggregation would allow wallets to replace many transaction signatures with just one signature which could give a further ~20% transaction size decrease (upon the 4% decrease provided the smaller Schnorr signatures). A second example of possible future upgrades includes sign-to-contract ideas like Taproot and Graftroot which would allow for the privacy aspects to increase even further.

May 15th upgrade also made segwit transactions recoverable again. Because of the enforcement of a "cleanstack" rule to reduce malleability since the Nov 2018 upgrade there was an unfortunate side effect that miners were no longer able to recover coins accidentally sent to segwit pay-to-script-hash (P2SH) addresses. The 2020 May upgrade allowed transactions spending segwit P2SH coins once again to be included in blocks.

On the upgrade day itself an old vulnerability in the Bitcoin ABC software was exploited which prevented miners running Bitcoin ABC software from constructing non-empty blocks. This incident is well documented in the Bitcoin ABC Incident Report (15MAY2019). The article explains the issue was due to sigops not being properly counted in the mempool acceptance code for transactions containing the OP_CHECKDATASIG opcode.

The incident report continues: "The vulnerability described above was exploited on mainnet for approximately two hours until a fix was put into place. During that time, miners running Bitcoin ABC software were prevented from producing blocks containing transactions other than the coinbase. As a result, no non-coinbase transactions were confirmed during this time period.

Non-mining business operators were not directly affected by the exploit. Users and businesses could still add transactions to the mempool, making 0-conf not affected during this event. However, confirmations could not be made, potentially slowing commerce during this time period.

During and related to this event, there was no risk to user funds."

In the grand scheme of things two hours no transactions being mined is not that extraordinary, considering blocktimes have experienced wild swings on the Bitcoin Cash network which has close to the same effect. The incident however demonstrated the disadvantages of Bitcoin ABC's dominance on the miner ecosystem. For the most part, the idea of multiple mining implementations had not worked out in practice.

When the vulnerability was fixed and the miners were able to produce non-empty blocks again, 3792BCH totaling almost 1.5million USD was free for grabs on the table. So shortly after a patch for the ABC vulnerability was implemented, two blocks were mined by two separate miners identified by “unknown” and “Prohashing” strings in the respective blocks’ coinbase transactions. The first of which included transactions that spent BCH from more than 1000 segwit addresses. Those two block were intentionally orphaned by BTC.top and BTC.com building 4 blocks on the last one that did not containt the segwit claims. BTC.top went on to send the mistaken segwit coins to their intended recipients. The incident was known a "segwit theft" which then got reversed by an intetnional reorg which some, mainly detractors, reffered to as a Bitcoin Cash 51% attack. The event sparked much discussion, the prevailing opinion in the BCH community was that the miners acted in the best interest of the chain and that the whole thing was an unfortunate consequence of the cleanstack rule. A great but unfortunatly now unavailable article on the matter was "Bitcoin Cash guardians and pirates in sight" on the now retired BCH blogging platform honest.cash. The whole episode got documented in detail by Coinbase in their blogpost "A Deep Dive into the Recent BCH Hard Fork Incident".

Chain Limit

In the beginning of August the Bitcoin Cash website SatoshiDice made a post to the community “A request from Satoshi Dice to the Bitcoin Cash community and a 1,000 BCH offer.” In which they promised to donate the next 1,000 BCH they earned (up to €1,000,000 value) to the Bitcoin Cash developer fund if the 25 unconfirmed transaction limit was removed before the end of the year (within 5 months). That the limit acted as a hurdle for adoption was corroborated by the then upcoming BCH tokenwallet badger wallet which most bug report was the error when hitting the unconfirmed chainlimit and by MemoBCH, a social network site build on top of the Bitcoin Cash network. It's true that all of this services could have worked around the problem but that just proves the point that there is an underlying problem.

Mid-September Bitcoin Unlimited member Peter Rizun revealed improvements that would permit longer chains of unconfirmed transactions with reference to the SatoshiDice bounty. The issue became a source of contention, in part because the limit is a form of “quasi consensus” meaning that different standards on different node implementations would be possible on the same network (unlike a different blocksize limit) but this would compromise zero confirmation security, an aspect highly valued by the Bitcoin Cash community. In part the tensions were increased by the bounty and in large part it was just earlier tensions resurfacing.

In the beginning of October Bitcoin Unlimited announced they were increasing the limit on chained mempool Transactions to 500 which would be rolled out slowly across the mining ecosystem. The controversy continued throughout the year demonstrated by the article "ABC Dragging Feet or Existential Choice?" defending ABC and detailing some of the reasons why the change might not be as straightforward as it looks at first glance.

Related to the criticisms of the limits in the Bitcoin ABC software, and in line with the question of the role of miners as guardians, there was much ado early September about several mining pools soft-limiting their blocksize to 2MB. This incident was much overblown, as bitcoin historically (before the split) always had a hard limit well above the soft cap when it was working as intended. The article "Spam backlog and why miners don’t want to set limits way beyond actual use" details how the many were disappointed at the mempool backlog and the worse UX that resulted from this. As the article continues to explain, these big and unusual spikes on the network can be used as an attack vector to spam miners and greatly increase their orphan rate. Contrary to popular opinion letting the fee levels rise when the amount of transactions is orders of magnitude higher than the organic use is the desirable response from miners acting in the best interest of the network.

The color issue

Mid-June the bitcoin.com website rebranded to a more green centered colour pallet, early august the subreddit r/btc got a green makeover to the great displeasure of Amaury Séchet and other who still preferred the orange BCH logo. Attempts to change the bitcoincash.org domain was unsuccessful, they even declined to add green logos available for download on the site.

Nov upgrade

The November 15th upgrade of 2019 was the 5th hardfork network upgrade of Bitcoin Cash. The upgrade was a continuation of the changes to fix transaction malleability on BCH by enforcing minimal pushdata in script. This change makes the majority of Bitcoin Cash transactions non-malleable. The upgrade also extended Schnorr signature support to the opcode OP_Checkmultisig(verify).

HEX listing

December 15th Bitcoin.com made the announcement that they were listing the HEX token on their exchange. Hex is Richard Heart’s ethereum token “designed to pump” which was claimable by all bitcoin holders.  The project has no utility except for the expectation of bigger fools – sometimes this was even quite explicit in the marketing. Richard Heart is an example of the shady influencer in the cryptocurrency sphere: bitcoin maximalist turned ethereum proponent with the launch of his own token. Richard Heart and Roger Ver even had a bitcoin debate in aug 2017 where Heart took the bitcoin maximalist angle. With the announcement of the new listing they decided it was a good moment for a livestream together. The Bitcoin Cash community, which often gets accused of promoting a scam, deceiving newcomers etc. reacted very fiercely against any association with the purported scammer. The intent was clearly to have Roger Ver and Bitcoin.com back down, in part to avoid negative association of HEX and Bitcoin Cash but also in part because it’s morally questionable to enable people to get scammed. In Roger’s defence he never encouraged people to buy HEX and stated that he would not buy it himself but that he believes in the right of people to trade it and believes in the function of market prices. The slogan “Don’t like it? Don’t trade it” will still sound familiar to many BCHers. The fact that people could claim HEX without ever buying also was a strong argument for allowing people to trade it: if many sold it at the exchange, the market price would drop and better reflect the value -or lack thereof- of the project. The intense backlash from within the BCH community lasted a few days up until an accidental announcement was made and retracted concerning a HEX delisting but in the end it was never delisted. It’s an interesting event in how the community reaction contrasts with that to the movement for BSV delistings and because, just like with the BSV delistings, one can see both sides of the argument. The reaction to Roger Ver was probably well out of proportion compared to how many more people bought HEX that otherwise would not have. The BCH community was louder on this issue than its biggest detractors. Luckily Ver already knew to not let an online mob affect him too much in his mission for p2p electronic cash and unlike that from his detractors most of this backlash was constructive, not a personal attack. In the end the reaction from BCHers signals that they deeply care about the integrity of its figureheads and also shows an immune system-like  reaction to approaching scammers since the CSW saga.

Innovation at rapid pace

2019 was a year with a lot of building happening, the big trends were more privacy focused tech and the development of a tokenecosystem. On the privacy side, the new Cashshuffle protocol for trustless, non-custodial coinjoin was developed and integrated in the Electron Cash wallet. Another privacy advancement was the release of the neutrino wallet, a BCH wallet that doesn’t leak addresses to full nodes. The wallet is a fork of an originally lightning network focused BTC wallet. At the very end of the year a brand new privacy protocol, cashfusion, developed by the cashshuffle team had an implementation in alpha stage. A last innovative tool for privacy was bitcoin.com's new peer-to-peer marketplace on the subdomain local.bitcoin.com. The service allows for the private buying and selling of Bitcoin Cash and other cryptocurrencies through non-custodial escrow which means the business never has ownership of the funds. The service uses the simple smart contract scripting capabilities of Bitcoin Cash and was made possible by the introduction of the opcode datasigverify the year before.

The Simple Ledger Protocol launched back in late August of 2018 by programmers such as Jonald Fyookball, James Cramer, Unwriter, Mark B. Lundeberg, Calin Culianu, Ryan X. Charles to develop a simple and fast token solution for Bitcoin Cash. In little over a year it has been the decisive victor of the so called “token wars”, the race for a token protocol on top of BCH to gain traction. The two main wallets kicking of this token ecosystem were Electron Cash SLP and Badger Wallet, the former of which allowed for the easy creation of tokens inside the wallet, besides the usual sending and receiving. Later the arsenal of supporting wallets grew, with crescent cash, monarch wallet, ifwallet and memo adding SLP support. The year saw lots of experimentation with an SLP torch, SLP gaming tokens, a first BCH stablecoin called Honestcoin (USDH) and a hackathon. During the year a new exchange dedicated to trading SLP tokens was the first to list SLP token pairs. Another important innovation by SLP developers was the reveal of a new specification in July, which extended the SLP token type 1 protocol allowing for the creation of non-fungible tokens that can be grouped together using a single ID. One of the most promising usecases of SLP tokens was highlighted by the Bitcoin.com SLP dividend calculator which allows to pay, as the name suggests both SLP and Bitcoin Cash to holders of a certain token. Towards the end of 2019, a new exciting protocol called the "SLP Token Postage Protocol" was released by Vin Armani. This protocol makes it so that users no longer need Bitcoin Cash to be able to transact with tokens on the network but allow "postage services" to stamp a Bitcoin Cash miner fee on the transaction and in turn charge a fee denominated in the token of the transaction. This whole scheme would happen noncustodially and trustlessly.

Other developments in 2019 that don't neatly fit those two categories include this blogging platform, read.cash which allows for readers to tip writers for their articles. There were also multiple improvements to the dev toolkit with the launch of Cashscript and various improvements to the other BCH high level programming language Spedn. Idea wise, Tobias Ruck worked out a outline for a new bitcoin Cash transaction format which he called Mitra (after the working name Nimbus). He started developing a prototype smart card which allows for sender offline payments after being motivated by a payment issue during the Bitcoin Cash City conference in early September. Continueing the discussions since the November 15th BSV split, Avalanche was a prominent topic of discussion amon BCH proponents during 2019. The preconsensus scheme would allow for near instant finallity for transactions and provide an anti-reorg attack mechanism. Many of the discussion was about what type of anti-sybil mechanism would be used and about the incentives to (honestly) participate in the system. Towards the end of the year the developer Tyler Smith published a draft specification for “Snowglobe” which details an avalanche preconsensus protocol.

Year in review

Overall the year was relatively drama free with no talk of a split for the full year. It's not an overstatement to say building was the central theme of the year. Overall community sentiment also got a big boost because of Hayden Otto's Bitcoin Cash City conference which refers to Townsville, Australia where many retail merchants accept BCH.

Marketwise the price did not fully reflect the advances described above, the beginning of 2019 knew a price recovery from its lows of around 80$ mid-December 2018, following the BSV split. Starting in April the price went on a steep climb, reaching well over 400$ in May and June. During the second half of the year 2019 the price went on a slow decline, closing the year at 200$ per BCH despite positive developments.

helpful articles: "Bitcoin Cash 2019: Year in Review" by Bitcoin.com and "Simple Ledger Protocol 2019 Year in Review" by the SLP foundation