Supplement to the History of Bitcoin Forks

Author: Wang Yishi, Founder of OneKey

The internet has a memory.
Recently, Bitcoin has been hitting new highs, and Wall Street institutions are rushing in to hoard coins. Even Musk couldn't help but publicly endorse it, gaining recognition from mainstream media and financial institutions, and everyone seems to have no doubts about the security of the Bitcoin system.

However, many people might not imagine that just three years ago, Bitcoin faced its biggest crisis since its inception—almost being usurped by the BCH group, and even the name "Bitcoin" was nearly lost.

The Bitcoin fork is an old story from the last bull market; I didn't want to dwell on it, but recently some bored individuals have been smearing CoinEx, and we don't speak up, leading some uninformed friends to genuinely believe that CoinEx is irredeemably evil, becoming synonymous with villainy. So, let's briefly discuss some of the things CoinEx did to protect the Bitcoin network back then.

These events happened many years ago, and I haven't mentioned them publicly since, not seeking fame or fortune, just hoping everyone knows the truth, to distinguish the false from the real, and to have more topics to discuss over tea and meals.

Why does the BCH fork faction hate CoinEx?

Many people think that the "Bitcoin fork" incident back then was not a big deal, after all, such phenomena are quite common in the cryptocurrency community today; a programmer could fork a coin successfully in just a few days.

But back then, a fork was a very serious matter, involving various people and interests, entangled with many beliefs and benefits, akin to a "Buddhist versus Taoist dispute," reaching a point of life and death, where weapons were drawn.

This is not an exaggeration but a fact.

In reality, many friends and partners who were once very close turned against each other because of the Bitcoin fork, severing all ties.

Many people cannot understand why the BCH fork group harbors such deep hatred for Bitcoin supporters and CoinEx? Why do they spread all sorts of rumors daily? Sometimes, to make their lies appear logically sound, they often spend a lot of time gathering various materials, then misrepresenting them, leading many uninformed people to think the "information is detailed," and they find it thrilling.

The reason is that CoinEx cut off the BCH fork group's financial lifeline.

As the saying goes, "Cutting off someone's financial path is like killing their parents." CoinEx did a lot of work to dismantle the BCH group's fork actions, even guarding Bitcoin for two weeks during a critical period, successfully thwarting the conspiracy of BCH (formerly known as BCC) to usurp power.

It must be said that the BCH group truly embodies the unity of knowledge and action; they also have beliefs. They genuinely believed that BCH would surely succeed and could defeat Bitcoin, so they exchanged almost all their Bitcoin for BCH. If they had succeeded in usurping power, the rewards would have been unimaginable.

In the end, all of this was destroyed by CoinEx at a critical moment. Do you think they hate CoinEx?

The Grievances Between CoinEx and Bitmain

There are many articles about Bitcoin forks, so I won't elaborate further. Interested friends can check out the article on Hupu titled "The History of Bitcoin Forks" or search for other articles to learn more.

Here, I mainly want to discuss the role CoinEx played during the entire fork war and the losses it suffered.

Many friends might have seen the news in 2018 about Bitmain suing CoinEx Mining Company over patent issues, with defendants including Shenzhen Bitwei (Shenma Mining Machine) and Xinte Energy Co., Ltd. (the mining site).

At that time, many people were quite shocked by this news because the relationship between CoinEx's Xingkong and Bitmain's Wu Jihan had always been very good, often dining together privately.

How did they suddenly end up in court? What exactly happened?

In that lawsuit, the patent involved was called series power supply technology.

Speaking of series power supply technology, one must mention a tech geek—Vasily.

Vasily was an engineer at the Russian company Bitfury (which had already started making Bitcoin mining machines in 2013). After leaving Bitfury, in 2014, Vasily was lured to China by a Russian named Yuri, who told him he had contacted Canaan Creative and could obtain their chips to make mining machines and get rich.

At that time, Canaan had just announced that they would no longer make mining machines themselves but would directly transform into a chip supplier, welcoming everyone to purchase chips.

Yuri was a typical businessman. Since Canaan's latest chip mining machine plan was immature, after several unsuccessful attempts to create a mining machine plan, he turned to sell his "series power supply" technology to Canaan.

This technology had existed for a long time, but inspired by it, Vasily was the first to apply it to the mainboard of mining machines.

With this technology, mining machines could power the mining chips directly without expensive power control chips, saving a lot of costs and avoiding dependence on the supply of power chips. (At that time, Bitmain had swept the market for power chips, not only running out of stock but also raising prices.)

This technology sounds simple and is easy to implement, but its research and development are very difficult because, without power chip control, the current cannot be stably output, easily causing current imbalance and burning out the chips.

Canaan was very interested in this technology, so they had many discussions with Yuri, but Yuri's conditions were too harsh. Later, Canaan learned that the actual owner of this technology was not Yuri but Vasily, so they directly approached Vasily, purchased his technology, and even hired him as a hardware development engineer.

Later, Yang Zuoxing left RockMiner and joined Canaan's mining machine (ASICMiner) R&D team, becoming colleagues with Vasily, working together on mining machines and chips.

In 2015, Canaan suddenly vanished, and the company disbanded, sealing all technologies. Later, Yang Zuoxing worked part-time at Bitmain for a while, bringing the series power supply technology to Bitmain.

By 2016, Yang Zuoxing had entrepreneurial ideas. First, he talked to Wu Jihan, who gave him unilateral support, then Wu suggested he talk to Zhan, but Zhan directly vetoed Yang's business plan in person, even shredding Yang's business plan right in front of him.

Thus, Yang Zuoxing founded Shenma Mining Machine, competing with Bitmain.

Naturally, Shenma Mining Machine also logically adopted the series power supply technology.

It's worth mentioning that before starting his business, Yang Zuoxing had approached Xingkong several times to discuss entrepreneurship. After the meeting with Zhan, Yang again approached Xingkong, confirming his determination to make mining machine chips, and Xingkong, along with several friends, invested, becoming one of the major shareholders of Shenma Mining Machine.

The logic behind Xingkong's investment in Shenma Mining Machine was simple—due to Canaan's disappearance, Shenma Mining Machine completely exited the historical stage, and at that time, Bitmain's Antminer was monopolizing the market, which was not good for the Bitcoin network and could easily lead to major problems. (As it turned out, this judgment was very correct.)

At that time, the other investors in Shenma Mining Machine included Shen Yu from F2Pool and Wang Chun, and everyone shared the same idea: they could not let Bitmain continue like this.

It's important to know that in order to successfully fork Bitcoin, Bitmain had started laying the groundwork early on. During that time, they prioritized selling a large number of mining machines to those supporting the fork, making it very difficult for Bitcoin supporters to obtain machines.

Moreover, supporters of large blocks only needed to pay 10% of the payment, which was equivalent to giving them a fivefold leverage; they could obtain five times the computing power by only paying for one.

Many people became wealthy because of this, and thus became even more loyal to Bitmain, walking down the dark path of supporting the fork.

Fortunately, Shenma Mining Machine's R&D went smoothly and quickly grew to be able to compete with Bitmain.

At that time, CoinEx Mining was a super customer of Bitmain, and to support Shenma Mining Machine's development, it also purchased a large number of Shenma mining machines.

During the fork war, when the BCH group realized that CoinEx was secretly protecting the Bitcoin network, they adopted a strategy of surrounding Wei to save Zhao, suing Shenma and CoinEx Mining Company together for patent infringement.

Although Bitmain ultimately lost this lawsuit, they achieved their intended goal—mining site providers, to avoid risks, required CoinEx's mining machines to be temporarily removed from the site, causing CoinEx's computing power to disappear for a time, and this contest came to a close.

After this battle, CoinEx suffered heavy losses.

On one hand, CoinEx used its own computing power to prevent BCH's computing power from striking (explained later), incurring nearly 100 Bitcoins in losses daily (lasting for one difficulty cycle, i.e., 14 days).

On the other hand, due to being forced to relocate, there was a long delay in mining, resulting in significant losses, and CoinEx also suffered huge losses.

However, at this time, the emergency difficulty adjustment algorithm (EDA) that the BCH group had meticulously planned to use against Bitcoin had already lost its optimal timing, and their original plan to ambush the Bitcoin network completely failed.

If it weren't for CoinEx's computing power counterattack at that time, BCH might have successfully usurped power, not only surpassing Bitcoin's computing power but possibly even stealing the name "Bitcoin," preventing Bitcoin from growing to its current scale and status.

Because of this incident, Xingkong and Wu Jihan, who were once good brothers, turned against each other and severed ties. CoinEx subsequently became a thorn in the side of BCH stakeholders, a nail in their eye, and they wished to eliminate it quickly.

Why doesn't CoinEx support BCH?

It is well known that both CoinEx and F2Pool had a good relationship with Bitmain back then, including at the Hong Kong Consensus and New York Consensus conferences, where everyone sat together to discuss.

The goal was, of course, mutual benefit, hoping for better development of Bitcoin.

However, everything began to change after 2017, when Wu Jihan gradually developed the idea of forking, and he put this idea into practice in August 2017.

During this process, the BCH camp's actions were consistently aggressive, as if they were determined to destroy Bitcoin. Forking is fine; everyone can do their own thing, but BCH had planned from the start to step on Bitcoin to rise.

Ironically, the original Bitcoin evangelists transformed into the most staunch opposition force against Bitcoin, attacking it with great fervor.

They claimed, "BCH is the real Bitcoin," calling on everyone to sell their Bitcoin and buy BCH. Countless people believed their lies, exchanging their hard-earned Bitcoin for BCH, suffering heavy losses, and ultimately having to leave the industry entirely. One must ask, what is the difference between this behavior and fraud?

They claimed Bitcoin's blocks were small and could not handle many transactions, causing significant congestion on-chain. When everyone found out Bitcoin wasn't as congested as they claimed, they initiated "dust attacks," sending a large number of small, worthless transactions in a short time, creating a false impression of congestion in the Bitcoin network. Then they promoted large blocks, spreading rumors that Bitcoin would eventually perish due to congestion. (In fact, Bitcoin is still thriving and becoming stronger.)

Do you remember how antivirus software used to do evil? Some unscrupulous companies would create viruses themselves to sell their software after users got infected. Their behavior is strikingly similar.

At that time, Craig Wright stepped forward to support the fork, and they quickly teamed up with him, inviting Craig Wright to endorse BCH, write articles, and hold press conferences, creating a spectacle.

They never expected that what goes around comes around; Craig Wright, this fraudster, was not an easy opponent. Just three months later, Craig Wright dealt a fatal blow to BCH, igniting a fork war that nearly destroyed BCH.

Indeed, BCH forked from Bitcoin, and Craig Wright then forked BCH again, creating BSV—a true spectacle!

CoinEx has always been a believer in Bitcoin. Perhaps BCH had good intentions at the beginning, but in the subsequent promotion process, CoinEx naturally did not recognize the various malicious tactics they employed.

Maybe these tactics are common in political struggles, where smearing and framing competitors are standard tricks, but this is the Bitcoin community, which carries the hopes and beliefs of countless people. The original believers were a small group of idealists, and seeing it turn out this way is certainly not what everyone wants to see.

Moreover, the main driving force behind BCH is Bitmain. Whether developers or opinion leaders in the community, most are funded by Bitmain. BCH is essentially a company coin, overly centralized, and trying to replace Bitcoin is clearly inappropriate.

This is not to say that company coins can't succeed; for example, platform coins like BNB have done very well. However, if this company coin aims to overthrow Bitcoin and take its place, then its positioning is unclear.

In short, many actions of the BCH group reveal their extreme unreliability. If the future of Bitcoin is entrusted to such a group, Bitcoin will inevitably be doomed, which is something everyone in the Bitcoin community does not want to see.

Thus, at a critical moment, CoinEx decided to intervene.

How did CoinEx protect the Bitcoin network?

It must be acknowledged that BCH did indeed do a lot of work and preparation to win this fork war. They had long ago started hiring some opinion leaders in the community to create momentum, continuously writing articles, some of which were quite in-depth, appearing reasonable and logically sound. (Later, Craig Wright adopted the same tactic, fooling a large number of die-hard fans.)

In addition to the public relations battle, in terms of technology and future vision, the BCH group also painted many grand prospects, which looked enticing. Due to the characteristics of large blocks, there were indeed many functions that Bitcoin could not achieve, which filled many people with anticipation.

If these were just routine operations, one thing must be noted that is truly impressive—the emergency difficulty adjustment mechanism (EDA) of BCH.

Because BCH uses the same algorithm as Bitcoin, under normal circumstances, for BCH to successfully fork and continuously maintain block production, it must have a large computing power support. When forking, the difficulty of the Bitcoin network was already very high, and small computing power could not produce blocks at all.

Therefore, they devised an emergency difficulty adjustment mechanism: if the block time of the current block's previous six blocks exceeds 12 hours, the difficulty automatically decreases by 20%. If the MTP time of the current block and the MTP time of the sixth block counted backward from the current block differ by more than 12 hours, the difficulty should be reduced by 20% in an emergency.

In simple terms, if no blocks are produced within a certain time, the difficulty will automatically decrease by 20%. If no blocks are produced again, it will continue to decrease by 20% until a block is produced. This way, even with very little computing power, it can ensure that blocks can be produced.

At first glance, this mechanism seems like a defensive mechanism, purely for self-preservation, but do not be fooled by its appearance; it is actually a highly aggressive mechanism because the difficulty can only decrease, not increase.

The designer of this mechanism understands human nature very well. They know that miners are profit-seeking; as long as there is money to be made, they will vote with their feet and directly shift their computing power.

When BCH's difficulty decreases, with the same computing power, miners can mine more coins. As long as the profits exceed those of Bitcoin, miners' computing power will be attracted over.

Thus, even if BCH's price is lower than Bitcoin's, as long as the difficulty is low enough, miners can earn more money, and computing power will come over.

The computing power of BCH and Bitcoin is mutually exclusive; mining BCH means not mining BTC, creating a relationship of mutual consumption. Once Bitcoin's computing power migrates to the BCH network, combined with a price increase, under the circumstances at that time, it was indeed possible for BCH to successfully usurp power.

It is important to note that many neutral parties had expressed that whichever network has greater computing power supports which coin as the real Bitcoin.

One must admit that the design of the emergency difficulty adjustment mechanism is indeed very ingenious, so this mechanism is also referred to as a "computing power strike" against Bitcoin.

The BCH group had been brewing for a long time, spending a lot of manpower and resources preparing for the fork. They planned to immediately launch a "computing power strike" against Bitcoin after the fork, meaning that once the fork was completed, they would withdraw their computing power from the BCH network, causing the difficulty to drop significantly while also greatly increasing the coin price. This way, they could attract most miners' computing power over, causing Bitcoin's network computing power to plummet, rendering the Bitcoin network unable to operate due to congestion, ultimately securing victory.

This plan was nearly perfect.

This was a blatant scheme against Bitcoin; everyone knew what was happening, but there was no way to crack it because at that time, the BCH group controlled more than half of Bitcoin's computing power. As long as they attracted about 10% of the computing power over, the Bitcoin network might not be able to operate.

At that time, besides the computing power and mining pools controlled by the BCH group, there were only three mining pools with relatively large shares: F2Pool, GuoPool (BTC China Mining Pool), and CoinEx Mining Pool.

Even if the mining pools wanted to support Bitcoin, they needed the miners' consent; the pools could not control users' computing power; otherwise, miners would definitely vote with their feet and leave.

Therefore, the BCH group felt confident of victory, probably even preparing for a celebration party.

However, they never expected that after the fork was completed, BCH produced a few blocks, and when they withdrew their computing power from the BCH network, quietly waiting for the difficulty to automatically decrease due to no blocks being produced, an unexpected event occurred—mysterious computing power suddenly connected to the BCH network, continuing to produce blocks.

Due to the continuous block production, BCH's emergency difficulty adjustment mechanism could not take effect because the difficulty could not keep decreasing (the block interval time was less than 12 hours).

Moreover, to prevent the mysterious computing power from launching a 51% attack on the BCH network, they had to awkwardly switch their computing power back, continuing to mine.

This mysterious computing power hid its Coinbase and address, leaving everyone puzzled about its origin.

The sudden appearance of this mysterious computing power disrupted the rhythm of the "computing power strike plan." Originally, they planned to pull funds to support the price after the difficulty decreased, but now the plan could not continue, getting stuck.

This situation was like an assassin launching a fatal blow against a target, only to have a mysterious force suddenly appear to block this fatal blow, continuously guarding the target, preventing the assassin's subsequent series of attacks from being executed.

The BCH group was very puzzled: where did this mysterious force come from?

As mentioned earlier, besides the computing power controlled by the BCH group, the only other significant computing power came from F2Pool, GuoPool, and CoinEx Mining Pool.

F2Pool and GuoPool were retail miners' computing power, which they could not utilize. Only CoinEx Mining Pool primarily consisted of its own computing power, meaning only CoinEx had the conditions to do this.

The answer is clear: CoinEx!

Yes, this mysterious computing power was CoinEx's own computing power.

When the BCH group was preparing to launch its first and strongest computing power strike against Bitcoin, CoinEx intervened.

Others could not do this; only CoinEx had the conditions to do it, so let CoinEx do it!

For the future of Bitcoin, who if not me?

It is important to know that at that time, the difficulty had not decreased, making it unprofitable for miners to mine BCH. CoinEx Mining endured daily losses of dozens or even hundreds of Bitcoins, steadfastly guarding Bitcoin for a difficulty cycle! (i.e., two weeks)

The BCH group quickly realized that this was certainly the work of CoinEx, but they had no way to technically refuse CoinEx's computing power; they could only stare helplessly.

Later, they finally came up with an idea—because of their previous cooperation, Bitmain's technicians had visited CoinEx's mining site and knew that Shenma mining machines were deployed there. Thus, they sued Shenma mining machines, the mining site provider, and CoinEx together for infringement of the series power supply technology, pressuring the site provider to order CoinEx Mining to move its machines away from Inner Mongolia.

Through this method, they finally managed to expel CoinEx's computing power from the BCH network, allowing them to launch a computing power strike against Bitcoin.

As soon as CoinEx Mining's operations stopped, they eagerly began to pump the price, and BCH started to rise sharply. However, by that time, it was already too late for them because the best opportunity for a strike had passed, and they had lost the "timing," significantly reducing the effectiveness.

Although BCH later launched multiple computing power strikes against Bitcoin, causing Bitcoin's network computing power to frequently become unstable, the outcome was already determined and no longer mattered; it did not affect the overall situation.

After this battle, CoinEx suffered heavy losses, not only losing more than ten days of Bitcoin mining revenue but also having to relocate its mining site, and the lost Bitcoins now seem like astronomical figures.

However, all of this was worth it. CoinEx contributed its strength to protect Bitcoin, blocking a fatal blow, doing what a believer in Bitcoin should do.

Although CoinEx lost almost all the profits it had earned from mining due to this incident, in the long run, CoinEx will surely benefit.

Postscript

These past events have been sealed for a long time, and many people are actually unaware of the details, nor do they know what CoinEx did back then. This is actually fine; CoinEx has always been doing well.

However, over the years, CoinEx has been smeared and slandered by some with ulterior motives, which is truly exhausting. After thinking it over, I decided to write down some words to reveal the facts, so that innocent onlookers are not misled.

The fork storm has passed for many years, and Bitcoin is still the same Bitcoin. The Bitcoin community is even stronger than before, which is the greatest happiness for us believers in Bitcoin.

Long Bitcoin, Short the world!