The cryptocurrency market suffered one of its most dramatic collapses of 2018 in the week surrounding November 21, as the Bitcoin Cash hard fork split the fourth-largest cryptocurrency into two warring chains. The so-called hash war between Bitcoin Cash ABC and Bitcoin Cash SV triggered a cascade of selling that pushed Bitcoin below $4,600 and wiped billions from total market capitalization.
TL;DR
- The November 15 Bitcoin Cash hard fork split BCH into two competing chains: BCH ABC and BCH SV
- Roger Ver and Jihan Wu backed BCH ABC while Craig Wright and Calvin Ayre championed BCH SV
- Both sides deployed massive hash power, with miners redirecting resources from the Bitcoin network to support their preferred chain
- Bitcoin hash rate dropped approximately 10% as miners shifted to the BCH battlefield
- BCH lost over 45% of its value in the week following the fork, falling to approximately $236
Origins of the Bitcoin Cash Civil War
The seeds of the conflict were planted months before the November 15 hard fork. On August 20, 2018, Bitcoin Cash ABC—the largest software client for the BCH blockchain—announced a protocol upgrade that included a new opcode called OP_CHECKDATASIG, canonical transaction ordering, and several technical improvements. The upgrade was designed to enable non-cash transactions such as smart contracts and oracle prediction services on the Bitcoin Cash blockchain.
Not everyone welcomed the changes. Dr. Craig Wright, the controversial Australian who claims to be Satoshi Nakamoto, and Calvin Ayre, billionaire CEO of mining pool Coingeek, emerged as the most prominent opponents. Wright saw no value in incorporating smart contracts into what he believed should remain a pure payment network, while Ayre demanded increasing the block size limit to 128MB rather than implementing canonical transaction ordering.
On the other side stood Roger Ver, owner of Bitcoin.com and one of the earliest Bitcoin evangelists who had become a passionate advocate for Bitcoin Cash, and Jihan Wu, co-founder of mining giant Bitmain. These two camps represented fundamentally different visions for the future of the Bitcoin Cash protocol.
The Fork and Its Immediate Aftermath
When the upgrade activated on November 15, the network split into two distinct blockchains. Bitcoin Cash ABC, supported by Ver and Wu, maintained the protocol changes including canonical transaction ordering and the new scripting capabilities. Bitcoin Cash SV, championed by Wright and Ayre, pursued a different path with a focus on larger block sizes and adherence to what Wright described as the original Satoshi vision.
The split was far from amicable. Both sides engaged in what the industry termed a hash war, deploying enormous computational resources to mine blocks on their preferred chain and establish dominance. The economic cost was staggering—millions of dollars in mining expenses were burned as each faction attempted to outlast the other. BCH ABC implemented controversial checkpoints as a 10-block reorganization defense, a move that SV supporters criticized as an abandonment of Nakamoto consensus.
Bitcoin Hash Rate Suffers as Miners Redirect Power
One of the most concerning consequences of the hash war was its impact on the broader cryptocurrency ecosystem. As both BCH factions incentivized miners to direct hash power toward their respective chains, the Bitcoin network saw its hash rate decline by approximately 10%. This redirection of mining resources from the world most secure blockchain to what amounted to a corporate dispute underscored the interconnected nature of cryptocurrency mining.
The hash rate decline on the Bitcoin network raised concerns about transaction processing times and network security at a time when the market was already under severe pressure. Bitcoin mining machines were reportedly being sold by the kilogram in China, a stark illustration of how the bear market and hash war were devastating mining operations of all sizes.
Market Devastation Across the Board
The timing of the hash war could hardly have been worse for cryptocurrency markets. Bitcoin was already in the midst of a brutal bear market decline from its December 2017 highs near $20,000. By November 21, 2018, BTC had fallen to approximately $4,602—a decline of more than 75% from its peak. Ethereum suffered even more severely, dropping to around $137 with a 24-hour loss of nearly 6% and a weekly decline approaching 24%.
Bitcoin Cash itself was among the hardest hit. BCH plummeted to approximately $236, representing a weekly loss of over 45% as the fork uncertainty and hash war costs eroded investor confidence. The total cryptocurrency market capitalization contracted sharply, with the top five coins by market cap—Bitcoin, XRP, Ethereum, Bitcoin Cash, and Stellar—all posting significant losses.
Major cryptocurrency exchanges responded to the chaos by halting Bitcoin Cash trading or implementing careful listing procedures. Many exchanges recognized Bitcoin Cash ABC as the legitimate BCH ticker while listing Bitcoin SV separately, though the situation remained fluid and contentious.
Why This Matters
The Bitcoin Cash hash war of November 2018 serves as a cautionary tale about the risks of blockchain governance disputes and the real economic costs of competing visions within cryptocurrency communities. The event demonstrated how a conflict within one cryptocurrency can cascade through the entire market, affecting Bitcoin hash rate, exchange operations, and investor confidence across all digital assets. The hash war also highlighted fundamental questions about decentralization—when a handful of influential figures can trigger a network split that wipes out billions in market value, the notion of truly decentralized governance faces its sternest test. For investors and industry participants, the events of November 2018 remain a critical reference point for understanding the systemic risks inherent in cryptocurrency markets.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile and past performance does not indicate future results. Always conduct your own research before making investment decisions.