Bitcoin Cash: An Extensive Roadmap
Since its inception nine years ago, it is undeniable that Bitcoin had come a long way. Aside from going down in history as the first-ever cryptocurrency, Bitcoin currently sits on the throne as the most popular, most stable, and most expensive cryptocurrency in the world.
Unfortunately, being on top ‘doesn’t mean that everything about Bitcoin is perfect. For years, both critics and supporters have been discussing ‘Bitcoin’s most significant weakness –scalability. Bitcoin, since its infancy, has a block transaction size of one MB. This limit heavily impacts the number of transactions the network could process, and often causes irritating delays and extended processing times.
Primarily, ‘Bitcoin’s primary goal is to rival the volume of payment transactions that Paypal, Visa, and other industry giants can process per second. However, given its scalability, it appears impossible for the network to achieve its goal. Fortunately, the team of developers behind Bitcoin ‘didn’t just settle on the initial development and tried to find out solutions to the most pressing issue by far. In August 2017, Bitcoin Cash was launched, and ‘Bitcoin’s journey began to take a different route. From ‘Bitcoin’s seven transactions per second, the developers managed to process 61 transactions using Bitcoin Cash.
A Brief History of the Hard Fork
In its infancy, the 1MB limit ‘didn’t prove to be a problem for Bitcoin transactions. The developers decided on the size to eliminate DDoS-attacks and spam-related risks. Understandably, Bitcoin was still unknown to most of the public, and there were only limited transactions that the network deals with that time.
However, as time went by, Bitcoin began to gain traction, and more and more people began embracing its innovative structure. The network soon found out that blocks are starting to pile up, and the system started to show signs of delays. In the first months, the massive load seemed to be under control until news broke out in May 2017. Bitcoin users began complaining about the substantial delays, with the confirmations of transactions taking up four days and even more.
Bitcoin, for what it’s worth, gave its users the chance to speed up the process. However, they must shoulder higher fees which is completely in contrast with ‘Bitcoin’s primary goal as a payment method –to present a more convenient system of payment with the most minimal fees. To use Bitcoin in small transactions such as paying a $3 worth of coffee would be unwise since the transaction would be charged with $15.
As the issues in scalability began to pose severe pressure within the community, the developers knew they had to come up with solutions, or else they will lose business. After a series of intensive research and developments, the Bitcoin community introduced Bitcoin Unlimited and Segregated Witness.
Proposed to eliminate the existing block size limit, Bitcoin Unlimited immediately gained support from the majority of miners. With this solution, the blocks will not pile up, and miners can earn an increased fee for each block. However, many developers feared that this proposal could result in massive mining companies overtaking the entire network. If centralization happens, small miners would be out of business.
Segregated Witness solution implies to free up the majority of the network’s storage space and allow more blocks to fit in. There would be separate files wherein the information will be stored outside the Blockchain. According to the team behind this proposal, it could speed up confirmation time. However, it was also met with doubts and criticisms, with many users believing that the solution can only work temporarily.
Since the Bitcoin community as a whole didn’t approve either of the two initial proposals, the team of developers came up with SegWit2x, a kind of compromise protocol. This solution combines the key elements of the first two proposals. Some of the network’s information would be stored outside of the Bitcoin, and the previous block size limit would be doubled to 2 MB. SegWit2x won 95% of the votes from the community, and it was implemented on August 1, 2017. Unfortunately, the solution failed to deliver the immediate increase in the limit of the block size. Moreover, it appeared that SegWit2x was created for investors who see Bitcoin as an asset instead of a payment system.
Then, in a conference held in Arnhem, Netherlands, an engineer who used to work for Facebook, Amaury Sechet, surprised everyone by announcing Bitcoin ABC, the protocol of the Bitcoin Cash (BCH). Sechet, along with a team of developers, had made drastic changes to the previous proposals. Instead of increasing the block size limit to 2 MB, they raised it to 8 MB. However, the new protocol forced them to split from Bitcoin’s original network. Thus, the community was informed that there would be a hard fork.
Currently, developers had only one known method for updating the Bitcoin software, and it is called a hard fork. The process involves splitting the network and creating another Blockchain with modified rules. Up to the split, the original network and the forked version possess identical Blockchains. However, the similarities end there.
Users who held Bitcoins before a hard fork took place were given with the same amount of BCH tokens. Surprisingly, Bitcoin Cash quickly gained traction from investors. In just a day, it managed to land the third spot in market capitalization, next to Bitcoin and Ethereum.
Is Bitcoin Cash more cost-effective than Bitcoin Core?
The answer is yes. Primarily, Bitcoin Cash was created to combat the ever-increasing fees being associated by users with Bitcoin transactions. In Dec. 2017, the Bitcoin network decided to conduct a test. The result was staggering. Transactions involving Bitcoin Cash were found out to be 99.56% cheaper than those transactions carried out on the original network. Also around this time, people began complaining about the exorbitant transaction fees. One user even shared that moving Bitcoin worth $25 had incurred a transaction fee of $16.
Negative reactions to hard fork
Many people in the cryptocurrency industry believe that a hard fork is against the existing principle of “code is law.” It does not only compromise the Blockchain’s immutability, but it also poses a threat to small miners. Processing larger blocks would require increased computer power and better equipment. Aside from the possible domination of massive corporations, some people think that the split is just meant to obscure a money-making scheme.
Roger Ver and Bitcoin Cash
Roger Ver is known in the industry as one of the earliest adopter and advocate of Bitcoin. He is the CEO of Bitcoin.com, and over the years, he had proven himself as a prominent investor. He is also one of the five founders of Bitcoin Foundation and had already donated over $1 million worth of Bitcoin to the foundation’s programs. Ver was even dubbed in the community as Bitcoin Jesus. His ventures include investing million dollars on several Bitcoin startups –Ripple, Kraken, Bitpay, Purse.io, and Blockchain.com.
In a recent interview, Roger Ver made a controversial remark. He claims that Bitcoin Cash is the “real” Bitcoin and is optimistic that it will have the biggest user base, trade volume, and market capitalization in a few years’ time. His faith on the asset is strongly supported by the confirmation that most of his crypto funds are in Bitcoin Cash.
Is it wise to invest in BCH?
Although Bitcoin Cash can be considered a young warrior compared to its competitors, its achievements acquired in a short time cannot be understated. At press time, BCH holds the fourth spot in market capitalization. As of August 08, 2019, one BCH is valued at around $330.
What crypto exchanges support Bitcoin Cash?
There are over 150 exchanges support BCH trading. List of all BCH trade market can be seen here.