Bitcoin has hardforked today at exactly 14:24 London time in an historical event that shows a very new way of managing digital money.
A 1MB BTC block was mined, rejected by the Bitcoin Cash nodes, so creating a new chain with its own nodes, miners, and its own network.
Bitcoin Cash is now rejecting all small blocks, creating two chains with their own different rules and thus own different currencies.
We now await for the first Bitcoin Cash block to continue its own chain which is currently somewhat behind the Bitcoin Core Chain.
The Bitcoin Cash network now has more than a thousand nodes, with the chain-split seemingly going through smoothly at this stage.
Thousands of Bitcoin Cash nodes were sprung up on cloud servers as soon as 12:20 UTC kicked in. The reason is unknown with some suggesting it was aiming to consume nodes connection slots while some suggested it was a method of protecting against any potential DDoS attack.
This is the first ever bitcoin chain-split, caused by an irreconcilable difference in vision between Bitcoin Core and Bitcoin Cash.
Bitcoin Core aims to turn bitcoin into a settlement system with its blockchain to operate under full blocks, to be used mainly by intermediary bitbanks known as Lightning Network hubs, not much different than the current financial system.
Bitcoin Cash aims to follow the same method of operation as bitcoin has always used. Before capacity was maxed out at the 1MB hard-limit, bitcoin used soft-limits, initially set at 250kb which miners lifted without any problem or much debate.
They then increased it to 500kb, 750kb and then finally to the 1MB hard-limit. A limit increased today by Bitcoin Cash which continues to use the dual soft and hard limit approach to increase transaction capacity in line with demand.
The two projects can now hopefully focus on their own visions, not least because they will have to compete in the open market with the ultimate 51% now constantly deciding their value as bitcoin proves once and for all its inherent decentralized nature.
Some exchanges have already opened Bitcoin Cash trading, like Kraken, with many bids placed, but no sell trade has yet been made because Kraken is still in the process of crediting the Bitcoin Cash.