Robert Steinadler, 3 months ago
There are a lot of different Bitcoin forks available. Some of them disappeared right after they started while others managed to thrive despite the fact that up until this fine day none of them were able to take Bitcoin’s rightful place. This raises the question if these cryptocurrencies are indeed obsolete or if they have a use case that is still attractive.
In this article, we are going to examine Bitcoin Cash and what potential lies within this particular Bitcoin fork.
At the time that the idea of Bitcoin Cash was brought to life, the Bitcoin community as a whole was deeply divided over the question of how to scale the world’s no. 1 cryptocurrency. The result of that internal dispute was the division into two factions. One side was in support of SegWit and building the Lightning Network as Bitcoin’s second layer.
The other side was in favor of increasing the block size drastically. With more space in each block, there is also more transaction throughput. The initial proposal for Bitcoin Cash was to increase the block size up to 32 MB. This means that if the demand is high enough, a block can be extended up to this size to scale according to the demand.
The major problem for Bitcoin Cash is that many people in the broader crypto community felt that this was an attempt to co-opt the good name of Bitcoin by a few actors that were in support, while the rest of the Bitcoin community was against their decision. While this is not necessarily important for the use case that BCH offers, it is still part of its history and image.
At the time of writing Bitcoin Cash can handle up to 115 transactions per second. Bitcoin (BTC) can only manage 10 per second. The Lightning Network however presents a case where millions of transactions are possible at the same time.
To assess the use case of Bitcoin Cash we have to keep two things in mind:
This means that if you are looking out for a cryptocurrency that is scaling well and is based on almost the same code as Bitcoin, then it might be a good idea to look into Bitcoin Cash. It offers on-chain transactions at a higher speed. That being said, hypothetically speaking the Bitcoin Cash blockchain might be an alternative if Bitcoin or the Lightning Network should ever fail.
When looking at the charts it is easy to see that the hash rate is dropping for Bitcoin Cash as well as for other forks like Bitcoin SV. This is indeed concerning. Each network is secured by miners and the more miners give up on putting their resources at work the transaction security becomes weaker. Of course, the Bitcoin Cash network is far from being compromised. But ideally, you want to see the hash rate on the rise over the years, not on a decline.
Miners are looking somewhere else for opportunity | Source: bitinfocharts.com
Should this trend continue in the future with BTC hash rate rising and BCH hash rate declining, then this could create a situation where on-chain security becomes more important than speed of on-chain transactions.
The second most notable fork is Bitcoin SV or BSV. Since this cryptocurrency is closely tied to the person of Craig Wright, it suffered even more than Bitcoin Cash. Wright still claims that he is Satoshi Nakamoto and tried to target several big names in the crypto industry with lawsuits. Most of them where aiming on people who called him a fraud for claiming that he is the inventor of Bitcoin. The result was devasting for BSV because at some point many powerful industry leaders have had it with the ongoing fights that shed a bad light on the whole industry.
In effect, BSV was delisted from many important exchanges and only plays a minor role. It not only lacks a powerful hash rate, but it also lacks support from the Bitcoin community that even Bitcoin Cash received in form of critical updates managed by Bitcoin developers in the past.
The BSV hashrate is on decline | Source: bitinfocharts.com
Other contestants are Bitcoin Gold, Bitcoin Green, and Bitcoin Diamond just to throw in a few names. Some of them don’t even have anything to do with Bitcoin in the first place except for putting it in the name.
While the crypto market holds a lot of surprises, chances are very slim that any of these altcoins will ever make it.
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