The year 2022 in Bitcoin Cash
Continuing the series, now that we're approaching the end of the year I summarize the year 2022 for Bitcoin Cash! Last year I missed a beat, but I'll probably fill in that gap later on, when people are more interested in the story of how Bitcoin Cash went from the absolute underdog with seemingly everything going wrong & slim odds of success to a peer-to-peer cash for the world.
What happened before, in the year ... in Bitcoin Cash
TODO: The year 2017 in Bitcoin Cash (everything leading up & from august 1st onwards)
The year 2020 in Bitcoin Cash so far: a detailed history [updated]
TODO: The year 2021 in Bitcoin Cash
CashTokens idea
In February, Jason Dreyzehner, who's pretty much a one-man-army, released a proposal he had worked out to add 2 new fundamental building blocks to Bitcoin Cash to enable complex decentralized applications on BCH. Those two "primitives" are fungible- and non-fungible tokens. The concept of an NFT is quite different from the popularized concept of a blockchain link to a monkey picture, instead they can be used to emit cross-contract messages. This approach of using NFTs for contract messages achieves much of the same things but is way conceptually and for actual applications than the previous iteration of the idea, PMv2, which needed applications to retain merkle trees of asset owners and would this way also allow for a "CashToken" standard. So technically this proposal is CashTokens v2, but the name hadn't been widespread or important enough to be prohibitive from being re-purposed. Much like with MPv2 in 2021, throughout the course of the year 2022 there would be discussions, group sessions through voice-chat & blogposts on the proposal and its implications. The idea immediately caught the attention among the technical community but would garnered more widespread attention with the decay of SLP tokens and the sudden collapse of the upcoming SmartBCH sidechain ecosystem.
Native introspection upgrade
May 15th Bitcoin Cash has its now yearly network upgrade, this time around the focus of the protocol upgrade was the smart contract capabilities of BCH. It added native introspection, 64-bit integers and multiplication to the virtual machine - much needed improvement for smart contract developers. The upgrade was pioneered by General protocols, the prominent company building smart contract apps for BCH. The advantages of native introspection are clearly laid out in their article "AnyHedge Case Study: The Positive Impact of Native Introspection and Better Math" also other lesser known projects benefited from the improvements such as refreshtimer.cash. The ecosystem was well prepared for the upgrade with a live upgrade-testing network and tooling such as Cashscript supporting the new functionality months in advance.
SBCH catastrophe & Coinflex Drama
SLP tokens had been on a noticeable decay, with Bitcoin.Com depreciating important pieces of its infrastructure, indexers struggling to sync and eventually Bitcoin.com removing SLP support from their wallet mid May altogether. Instead they would be supporting SBCH tokens. The failure of SLP is noticeable given the "token-wars" of 2018, it was meant to be the victorious protocol to come out on top but instead it was abandoned for tokens on an EVM sidechain.
On June 23rd CoinFlex paused all withdrawals, this was bad enough already because the exchange was had strong ties to some individuals in the BCH community. They also adopted SLP for their own token and listed SLP tokens before. During the 2020 split with BitcoinABC (what is now eCash) they also used to trade futures for both sides of the fork. Later it came out that the Coinflex insolvency was due to Roger Ver having an unlimited margin account where he could not get liquidated, then allegedly losing a ton of money and refusing to close those positions at a later date. Coinflex force closed those position essentially using costumers funds to bail out Roger Ver's negative trading account.
Because of technical incompetence and because of erroneous priorities of the SBCH team lead by Kui Wang, CoinFlex had full custody of all the funds bridged to SBCH. Instead of delivering a SHA-gate after the May network upgrade like they promised, they prioritized an Xhedge-upgrade which pretty much nobody cared for. In June-July there were even independent efforts having a full working demo of a sidechain mechanism because the SBCH was dragging their feet so much but those efforts were largly ignored by the SBCH team.
The custodial bridge did not even use multisig wallet -which is kind of an industry minimum- so obviously when times got tough CoinFlex held those deposits hostage, destroying the SBCH pay-out mechanism and hence pretty much all of the value locked in SBCH. The events also lead to the Smart BCH Hackathon in London which had first been delayed, to be cancelled for good. In July the SBCH team came up with a "bailout plan" to recover from the failure of their centralized bridge.
Overall, SmartBCH served as a worse than a distraction: a way to detract resources from the Bitcoin Cash ecosystem, harm its reputation and that of the people involved. It was a way for mostly-diligent BCH holders to lose the Bitcoin Cash trusted to the insecure sidechain and a way to burn scarce developer time which anything to show for it at the end.
Launch of apps
A host of new apps launched in 2022. General Protocols, the BCH-centric company certainly played a major role in this. Now less relevant because of the SBCH collapse but hop.cash added zero-conf functionality which was a first real world usage of double-spend-proofs, they also launched an overhauled UI but had to pause services in June with the Coinflex drama. General Protocols also launched the Oracles.cash beta mid June followed by its Whitelabel AnyHedge platform private alpha in begin September with a public alpha in the 2nd half of September.
Further, a year after its first announcement the BCH Bull platform launched as beta towards the end of October! A few days later Paytaca also added AnyHedge integration to their wallet and had a public beta for IOS users a few days after that. Besides General protocols there were other notable apps: such as the PodCash app which released mid August and Cashrain which had a private beta in early November, with expanding beta access throughout December.
Notably absent with new BCH developments was Bitcoin.com, they seemed to only have closed down BCH apps & infrastructure and instead shifted their focus towards Ethereum & Avalanche.
CashTokens Lock-in
After the SBCH collapse a clear need for good layer 1 tokens re-merged. CashTokens of course enables much more than just the "tokens" itself but now the direction clearly made sense to the wide community, not just to the wizard devs. Unfortunately it has been under-hyped, way under-hyped, even-though it's the biggest upgrade to Bitcoin (Cash) ever.
The lock-in date for features to be included in next year's network upgrade is November 15th, half a year in advance and the same date the bi-yearly upgrades used to happen. There's a few cash improvement proposals (CHIPs) that have gotten general acceptance for inclusion in the May 2023 upgrade, the most important of which is CashTokens. The others are restrict transaction version, minimum transaction size and Pay-to-scripthash 32bytes. The links to which you can all find in BCHN's article on the CHIPs for 2023 inclusion. Together with the lock in the new "CHIPnet" testnet was upgraded to include all the new features.
Year in review
BCH started the year at 440$ (and had traded above 600$ just two months earlier) and is now closing the year at 96$, which nothing short of a terrible performance. In fact this is retesting the all-time-lows of December 2018. with the peaks in 2017 and in 2021, it's probably 2 more years until the next cycle. The most unfortunate thing about the price is its momentum. People are discouraged from investing in new projects, community member have less resources to work with, and overall enthusiasm is low.
This is in contrast with the network fundamentals which have - with 2021s smart contract upgrade and the planned 2022 CashTokens upgrade- never been better. The community however has lost a lot of its talent over the year and did get burned seemingly each year. As I see it the CashTokens innovation is really BCH final attempt, a "bet" on smart contract and decentralized applications. A bet on native tokens, that they will work better than all previous solutions in the history of Bitcoin (Cash). Maybe even a bet on Jason's vision of prediction markets being the killer app.
Did I miss anything important or think I got something wrong? Agreed of how I situated the position of BCH towards the end? Please let me know in the comments, I welcome all feedback!
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