Bitcoin is doing better than ever – recent heights over $11,000 and a newfound stability around $10,000 have BTC skeptics around the world doing a fair amount of backpedaling. Even JPMorgan, whose CEO, Jamie Dimon, is widely known as one of Bitcoin’s most outspoken critics, has reportedly been considering offering its clients access to CME’s Bitcoin futures options, which will be available in December.
As Bitcoin continues to gain a stronger foothold in the mainstream world of fintech and pop culture, however, it has found itself in a bit of a popularity contest with its younger brother, Bitcoin Cash.
If you haven’t heard already, Bitcoin Cash was born as the result of the SegWit ‘hard fork’ (a software upgrade that resulted in the creation of a new cryptocurrency) at the end of August. Out of all of the currencies that have been forked from Bitcoin, Bitcoin Cash has been the most successful.
Indeed, Bitcoin Cash has maintained a largely bullish trend (with a few exceptions that will be explained later); the network’s increased block size does make it more suitable for high-traffic use than the Bitcoin network. It is for this reason that some in the Bitcoin community now deem Bitcoin Cash the ‘real Bitcoin’.
The tense relationship between the two currencies is reflected in their values. In a report for CoinDesk, Omkar Godbole described Bitcoin Cash’s relationship to Bitcoin as “parasitic,” noting that corrections in the price of BTC are often echoed as surges in the price of BCH.
Despite the public advocacy for BCH over BTC by some important figures in the cryptosphere, the Bitcoin network still reigns supreme. With a current market cap of $169.6 billion, the Bitcoin network is more than seven times the size of the Bitcoin Cash network.
A Dramatic Few Weeks for BTC and BCH
Suspicions about market manipulation and the centralization of the Bitcoin Cash network were raised several weekends ago when BCH rapidly rose up to $2400. At the same time, the Bitcoin network was facing so much traffic that some transactions were reportedly taking up to seventy-two hours and $100 in fees to be confirmed.
Crypto celebrities, including Gavin Andresen and Roger Ver, tweeted their praises of the Bitcoin Cash network, encouraging Bitcoin users to trade in their BTC tokens for BCH. The price of BTC dove; panic ensued as confusion over which coin was the real Bitcoin continued to grow.
However, a steep drop in the price of BCH on the Monday following the coin’s astronomical rise had the cryptosphere wondering if the whole episode was one massive pump-and-dump scheme orchestrated by industry insiders who may have large holdings in the BCH network.
Bitcoin Cash has not managed to climb back to its height of $2,400; at the time of writing, BCH was trading for $1,345, and has fallen 14.7% within the last hour. Meanwhile, BTC is trading at nearly $10,000, having dipped from its high of over $11,500 earlier today.
Roger Ver: Stop “Calling My Project Names”
For some in the cryptosphere, emotions surrounding the BTC vs. BCH drama are running high. Roger Ver, AKA “Bitcoin Jesus”, who is now increasingly referred to as “Bitcoin Judas”, had a bit of a meltdown during an interview with John Carvalho, host of Bitcoin Error Log. Ver flipped Carvalho the bird and demanded an apology from Carvalho for referring to Bitcoin Cash as “BCash”.
Carvalho explained that he was using the term simply because it was easier to say than “Bitcoin Cash”. “[You’re] calling my project names,” said Ver. Ver’s repeated references to ownership over the Bitcoin Cash network caused John to acknowledge the implication that Bitcoin Cash had become centralized, and that Ver was one of the primary stakeholders.
This writer is not a psychologist, but it does seem somewhat clear that Ver’s emotional response during the interview with Carvalho was a textbook example of misdirected anger and frustration. Ver played an important role in the development of Blockchain.info, Bitcoin.com, and other websites and companies that fostered the growth of Bitcoin. Seeing Bitcoin flourish after publicly jumping ship to Bitcoin Cash could have Ver feeling like he may have made a mistake – whether he wants to admit it to himself or not.
Despite the recent price drama, Ver’s switch from BTC to BCH was not an irrational move. Scalability remains a problem on the Bitcoin network, one that only becomes more serious as the network becomes more popular and receives more traffic.
A solution needs to be found, but it seems that the Bitcoin brand has been receiving so much attention in recent times that the price of Bitcoin will continue to grow based on interest as an investment to be bought and held. If – or perhaps when – it becomes more popular for use as an actual means-of-payment, the need for a fix will become much more urgent.
BCH’s Road Ahead: Proactive Improvement
Ever-determined, Bitcoin ABC (the group of developers behind Bitcoin Cash) recently published a ‘Medium Term Development Plan’ outlining the next steps for the BCH network. The plan explained that the network’s primary goal is to “keep improving it as a great form of money,” and that the network should “just work.”
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According to the plan, the secondary goal is to continue to “enable enhanced features” of the Bitcoin Cash network, but only if and when the enhanced features “do not detract from the primary money function” of BCH.
Possible features include an even bigger block size and the employment of canonical transaction ordering, which could “[pave] the way for techniques to enable massive scaling in the future, such as sharding, and parallelized block validation.” Essentially, the enhanced features would be implemented to improve the BCH network to quickly and securely process transactions.
The plan also called for active participation from the development community to “step up and work on” the features that they wish to be implemented into Bitcoin Cash. “We do not want to be in a position where people push for last-minute changes to be included in the protocol upgrade,” said the plan. “We need to be proactive.”
The plan also spoke of collaborations with seven other development teams who “share a common vision for advancing Bitcoin Cash”. Representatives from Bitcoin Unlimited, Bitprim, Nchain, Bitcrust, ElectrumX, Parity, and Bitcoin XT were all mentioned.
The Verdict: BCH or BTC?
Bitcoin’s clout as a legitimate movement in financial technology and pop culture is only beginning to build. Unless there’s a significant bust in the BTC market in the near future (and even then), it’s likely that Bitcoin will continue to grow (and grow, and grow).
Scalability on the Bitcoin network is a serious issue. If the primary use of Bitcoin makes the transition from a storage-of-value to an actual means-of-payment, the network will be in trouble. This would give Bitcoin Cash a real opportunity to sidestep Bitcoin in its journey to the top.
Because of its larger block size, Bitcoin Cash is more suited to be a high-traffic network than Bitcoin. Additionally, Bitcoin Cash does seem to have a solid team of developers and a supportive technological community that will continue to improve the network’s functionality, something that the Bitcoin network continues to have issues with.
All of that being said, Bitcoin Cash has not withstood the test of time. Questions about the centralization of the BCH network are legitimate, and can only be answered with patience and careful observation of the network’s behavior over the coming months and years.
There is no ‘perfect’ cryptocurrency. The technology is still so new that even the most promising coins can fail; some will fail. We can hope, analyze, and strategize all we want to. The truth is that investing in or using cryptocurrency is a leap of faith, one that may or may not pay off big time in the future.