TL;DR
- Bitcoin Cash underwent a hard fork on November 13, 2017, to upgrade its Difficulty Adjustment Algorithm (DAA)
- The upgrade was led by developers Amaury Séchet, Tom Harding, and Neil Booth, with testing by Bitprim.org
- Bitcoin Cash’s hashrate briefly surpassed Bitcoin’s following the cancellation of SegWit2x
- BCH price crashed from an all-time high of $2,477 to around $1,354 as the speculative frenzy cooled
- The fork highlights growing questions about how decentralized networks manage protocol-level governance
On November 13, 2017, the Bitcoin Cash network executed a planned hard fork to overhaul its Difficulty Adjustment Algorithm, marking one of the most significant protocol upgrades since Bitcoin Cash was created through a chain split in August 2017. The upgrade, while technical in nature, carries profound implications for the broader debate about governance, decentralization, and the future direction of cryptocurrency networks.
Fixing the Difficulty Algorithm: Why It Matters
When Bitcoin Cash split from the main Bitcoin blockchain on August 1, 2017, it inherited a difficulty adjustment mechanism that was designed for Bitcoin’s much larger hashrate. The result was a system that produced erratic block times — sometimes far too fast, sometimes painfully slow — creating what the community referred to as “turbo blocks” when disproportionately high hashrate would mine blocks at breakneck speed.
According to Juan Garavaglia of Bitprim.org, who was closely involved in testing the upgrade, “The Bitcoin Cash DAA has served its original purpose quite well, but now the side effects are hurting Bitcoin Cash.” The problem was not merely an inconvenience — it directly affected transaction confirmation times and the overall reliability of the network, two factors that Bitcoin Cash was specifically created to improve.
The fix came through proposals submitted by three prominent developers: Amaury Séchet (lead developer of Bitcoin ABC, the primary Bitcoin Cash client), Tom Harding, and Neil Booth. Each submitted different approaches to solving the DAA problem, and Garavaglia’s team at Bitprim.org was responsible for testing them under real-world conditions.
Real-World Testing Under Extreme Conditions
The testing process was remarkably rigorous. Garavaglia described running “real nodes and real hashrate on a testnet, using Bitcoin ABC binaries with the modified DAA algo.” The team simulated extreme conditions, including removing and adding vast amounts of hashpower — up to 95% — to observe how the new algorithm would respond to sudden shifts in network conditions.
The goal was to ensure that the upgraded DAA could handle the kind of wild hashrate fluctuations that Bitcoin Cash had been experiencing, particularly as miners switched between BTC and BCH based on relative profitability. These fluctuations had become especially pronounced in the days following the SegWit2x cancellation, as Bitcoin Cash attracted significant mining power from disaffected Bitcoin miners.
“So far, everything does much better than the current DAA, and the ‘turbo blocks’ problem is less severe and corrects faster than before,” Garavaglia reported ahead of the fork. The consensus among developers was clear: the upgrade was necessary and the proposed solutions were ready.
The SegWit2x Connection
While the Bitcoin Cash hard fork was planned well before the SegWit2x cancellation, the timing created a unique confluence of events that dramatically amplified its significance. When SegWit2x was called off on November 8, Bitcoin Cash suddenly became the primary beneficiary of displaced hashrate and capital.
The numbers tell a striking story. Bitcoin Cash surged more than 130% in 48 hours, reaching an all-time high of $2,477.65 on November 12. Its market capitalization briefly surpassed Ethereum’s $30.3 billion, making BCH the second most valuable cryptocurrency. Even more remarkably, Bitcoin Cash’s hashrate briefly exceeded Bitcoin’s own, a development that would have seemed inconceivable just weeks earlier.
Analyst Willy Woo described the phenomenon as a “strategic and geopolitical bet” driven by Chinese traders and miners who had been among the strongest proponents of larger block sizes. The suggestion was that Bitcoin Cash’s rise was not merely speculative but reflected a genuine power shift in the cryptocurrency mining ecosystem.
The Crash That Followed
But the Bitcoin Cash rally proved as ephemeral as it was dramatic. On November 13, the same day as the hard fork, BCH crashed spectacularly, losing approximately half its value and falling from its all-time high to around $1,277 before partially recovering to trade near $1,354, according to CoinMarketCap data.
Meanwhile, Bitcoin staged a strong recovery of its own. After plunging to approximately $5,605 — a 29% drop from its $7,882 all-time high — BTC rallied more than 11% in just 12 hours on November 13, trading back up to around $6,559. Bitcoin’s market capitalization stood at $109.4 billion, still more than four times that of Bitcoin Cash.
The simultaneous crash of BCH and recovery of BTC suggested that the market’s initial reaction to the SegWit2x cancellation — a massive rotation from BTC to BCH — had been overdone. The hard fork, while successful from a technical standpoint, did not provide the immediate catalyst that some BCH proponents had hoped for.
Governance Implications for the Cryptocurrency Ecosystem
The Bitcoin Cash hard fork raises important questions about how decentralized networks manage protocol upgrades. Unlike traditional software, where a central authority can push updates, blockchain networks require broad consensus among miners, developers, node operators, and users. When that consensus breaks down, the result can be a chain split — effectively creating a competing version of the network.
Bitcoin Cash itself was born from exactly this kind of governance failure. The original Bitcoin block size debate could not be resolved through consensus, leading to the August 2017 fork. Now, just three months later, Bitcoin Cash was conducting its own protocol upgrade — a smoother, more planned affair, but still a hard fork requiring coordination across a decentralized network.
The relative success of the BCH DAA upgrade — compared to the chaotic SegWit2x cancellation on the Bitcoin side — might offer some lessons. Garavaglia emphasized that the upgrade had been in discussion for weeks, that solutions had been “developed, coded, and tested” before being deployed, and that the timing was not rushed by external events. “It was always assumed things would be fixed around this time,” he noted.
This methodical approach stands in contrast to the SegWit2x process, which ultimately collapsed under the weight of insufficient consensus and conflicting interests. For regulators and institutional observers watching the cryptocurrency space, the contrast between these two governance outcomes is instructive.
What Comes Next
The DAA upgrade positions Bitcoin Cash to operate more smoothly going forward, with more predictable block times and less susceptibility to hashrate-driven volatility. Whether this technical improvement will translate into sustained market performance remains to be seen.
For the broader cryptocurrency ecosystem, the events of November 2017 represent a watershed moment. The simultaneous collapse of SegWit2x, the rise and fall of Bitcoin Cash, and the rapid recovery of Bitcoin all occurred within the span of a single week — a reminder that in the world of cryptocurrency, governance crises can emerge, escalate, and resolve with breathtaking speed.
Why This Matters
The Bitcoin Cash hard fork is more than a technical upgrade — it is a real-time experiment in decentralized governance. As cryptocurrency networks grow in size and economic significance, their ability to execute coordinated protocol changes without fracturing their communities will determine whether they can function as reliable financial infrastructure or remain volatile experiments. The contrast between the orderly BCH fork and the chaotic SegWit2x collapse offers valuable lessons for anyone interested in the future of digital asset regulation and blockchain governance.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.