At the beginning of August Bitcoin had to accept the first “Hard Fork”, who keeps his Bitcoins in his own wallet now has the same amount of “Bitcoin Cash”. But what if the Bitcoins are at an online exchange? Does it have to issue the new crypto coins?
An article by legal expert Dr. Bernhard Freund, lawyer and specialist lawyer for IT law (published on Planit.legal).
Like most crypto currencies, Bitcoin is based on a blockwise updated public transaction register, the blockchain. New blocks are continuously generated by so-called miners in a computationally intensive process (the power consumption already exceeds that of Croatia!). If the new “minted” blocks comply with the rules stored in the Bitcoin software, they are accepted by the nodes of the network and attached to the block chain. The transactions recorded therein are thus confirmed.
However, the Bitcoin concept must be adapted to the technical development and enormous growth of the network. This occasionally requires changes to the rules in the Bitcoin software. Due to the decentralized organization of the Bitcoin community, agreeing on such rule changes is a major challenge. In the worst case, part of the community will follow its own concept and accept a spin-off from the original Bitcoin currency.
Since then, part of the community has pursued its own blockchain, which on the one hand allows for much larger blocks and on the other rejects a new function called SegWit, on which the majority had agreed. By splitting the blockchain, the new, independent crypto currency Bitcoin Cash was created parallel to the Bitcoin.