Bitcoin’s eCash fork gives eligible holders an equivalent balance of ECX, but questions remain over where they can trade the tokens and what they can do with them.
Somewhere between the Binance hack and the US midterms, Paul Sztorc’s long-awaited Bitcoin fork, known as the eCash network, went live.
On Oct. 29, Sztorc, the founder of LayerTwo Labs and the driving force behind the Bitcoin Drivechain proposals BIP300 and BIP301 , launched a separate Bitcoin fork designed to bring payments, privacy and other applications to a network built from Bitcoin’s code.
“We need to actively sabotage the ‘degrowth’ policies killing Bitcoin,” Sztorc tells Magazine.
“We want to find the true Bitcoin builders and give them the tools to actually innovate. We just need the open-minded, risk-taking contrarians to come and build.”
The hard fork gives eligible Bitcoin holders an interesting windfall: their equivalent BTC balance in the new chain’s native token, ECX.
So what benefits does eCash bring to developers, and what can Bitcoin HODLers actually do with their new coins?
What is eCash?
Developed by Sztorc’s LayerTwo Labs, eCash is a separate hard fork of Bitcoin born out of Sztorc’s frustration with some of the “complacency narratives” and “cult-like toxicity” he believes has been holding Bitcoin back.
Sztorc dismisses criticism of Drivechains’ security. Source: archive.ecash
Its main innovation is Drivechains, a system that gives developers freedom to build independent sidechains with different features without having to make changes to Bitcoin’s base-layer protocol (or in this case, eCash’s base layer).
Developers can experiment with different applications for payments, privacy, digital assets and prediction markets, and miners can “maximize their revenues” by earning additional transaction fees.
Five sidechains launched alongside eCash’s mainnet: BitNames, BitAssets, Thunder, Truthcoin and zSide, with two more, the quantum-resistant Photon and decentralized exchange CoinShift, still to come.
Related: Blockchain developer Paul Sztorc announces BTC hard fork eCash
Sztorc has spent over a decade advocating for Drivechains and believes that Bitcoin’s notoriously conservative development approach has held back its potential.
“Anything that isn’t maximizing network usage is simply a distraction,” he says. “Users, the ones who actually pay transaction fees to miners, will win in the long run.”
Getting access to the new coins
The eCash fork took place at Bitcoin block 973,728, and anyone who controlled their private keys at the snapshot received an equivalent ECX balance.
“If you held the keys to your BTC at that exact block, you now own the exact same amount of ECX,” LayerTwo Labs tells Magazine. “It is that simple, and you can access them right now.”
Like beauty, simplicity is in the eye of the beholder, and Bitcoiners who self-custody their coins will need to use a wallet that supports eCash and carefully follow its process to separate the ECX from their BTC.
Because the two networks share transaction history, an unprotected transaction on one chain could be replayed on the other.
“Never move your BTC first, as an ordinary, unprotected BTC spend can easily be replayed on the ECX network,” LayerTwo Labs warns. Replay controls are built into the protocol, it says, but the company advises holders to move ECX first, before spending BTC.
Anyone keeping BTC on a centralized exchange is “at their mercy regarding distribution,” and should check whether their exchange supports the fork or has announced an ECX distribution.
Where can holders trade ECX?
Accessing ECX isn’t the same thing as being able to sell it and the tokens are not yet widely available on larger crypto exchanges. Depending on which country you are in, there can be tax implications from Bitcoin forks, which are worth looking up before filing your next tax return.
NeoxEX said it opened native ECX deposits, withdrawals and trading on Oct. 29, with ECX/USDT, ECX/USDC and ECX/BTC pairs, while CoinW announced plans to distribute ECX to eligible Bitcoin holders, with deposits, withdrawals and trading to be announced at a later date.
Orca, a decentralized exchange on Solana, lets users swap USDC for wrapped ECX (wECX) through a liquidity pool. That gives holders another way to trade exposure to ECX, but it involves a wrapped token on a different blockchain rather than native ECX trading on the eCash network.
Related: Binance, Polymarket seek Polygon hard fork to recover $6.8M in stolen crypto
How much are the tokens worth? CoinMarketCap placed ECX at $32.63, with around $355,000 in 24-hour trading volume as of Nov. 5, while CoinGecko shows the token as a preview listing, with no price yet available and no tracked exchange markets. Crypto market data provider Kaiko says it does not track ECX, which limits the availability of independent market data.
LayerTwo Labs says early trading saw ECX fluctuate between $40 and $50, but it did not provide supporting order book depth or trading volume figures, pointing instead to the Orca pool’s total value locked as a way for users to assess available liquidity.
eCash is $32.63 on CoinMarketCap as of Nov. 5
“If our fork replicates even a fraction of [Bitcoin Cash] BCH’s initial performance,” Sztorc says, “the liquidity will be staggering,” adding that anyone concerned about low liquidity can hold their coins and decide later.
“We are actively adding new exchanges and trading pairs, so the user experience will only improve,” he says. “Otherwise, you’re welcome to take your free money and leave.”
A different vision for Bitcoin
Sztorc says the value of eCash will ultimately depend on whether developers build useful applications and users are willing to pay for them. Paying customers and transaction fee revenue are the project’s main measures of success during its first year, he says.
He’s not concerned about criticism of Drivechains’ security model, especially the “superstition” that miners could coordinate to steal funds held on sidechains.
“If you genuinely believe miners will torch their own billion-dollar operations for a short-term theft on an L2, then you shouldn’t trust Bitcoin’s L1 either,” he says.
So for now, eCash gives Bitcoiners a new asset and developers a new playground — but whether ECX becomes much more than that will depend on whether anyone actually wants to use it.
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