On August 1, 2017 a highly debated facet of Bitcoin came to a head, as the cryptocurrency split into two in what is known as a “hard fork”, resulting in the creation of a new, altered form of Bitcoin known as Bitcoin Cash (BCH).
Supporters of Bitcoin Cash claim that it is the fulfilment of the vision of Satoshi Nakamoto in the original Bitcoin whitepaper, in which there was never any indication that block size should be limited on the blockchain. As a result of the current status of transactions on the blockchain, Bitcoin Cash decided to increase block size eightfold, from 1MB per block to 8MB per block, claiming that this will result in more transactions done in quicker times with lower costs. This has caused vocal Bitcoin Cash supporters such as investor Roger Ver and entrepreneur Calvin Ayre to exclaim that Bitcoin Cash is, “the real Bitcoin.”
Bitcoin Cash has seen a dramatic price increase since its inception, growing from about $300 in August 2017, to $2,300 as of January 2018, a growth of over 750%. This has resulted in a market cap of almost $40 billion for BCH, making it the fourth-largest cryptocurrency on the market. If BCH can continue to grow in acceptance across the industry it has the potential of chipping away at Bitcoin’s $240 billion value and potentially overtaking it as the world’s most utilized cryptocurrency.
However, is this new iteration of the world’s largest cryptocurrency really better? Opponents say that Bitcoin Cash fees are only low because there is such a small user base, and if that base were to grow, transaction fees would skyrocket well beyond Bitcoin’s current fees. Additionally, there are claims that Bitcoin Cash will always play little brother to Bitcoin, and without mass adoption, will never be considered a good store of value or replacement for fiat currency.
The future is uncertain for BCH. Developers continue to work on ensuring the BCH blockchain is able to handle mass adoption, whenever that may occur, and are considering increasing the block size once again to do so. There have also been talks of another hard fork, making Bitcoin Cash a minority chain and shifting to another chain that claims to have a more stabilized consensus algorithm.
A few interesting facts about Bitcoin Cash:
- As of January 2018, Bitcoin Cash fees are substantially lower than that of Bitcoin, averaging around $0.20 compared to as high as $20.
- At the time of the fork holders received 1 Bitcoin Cash for each 1 Bitcoin held.
- Block 478558 on the Bitcoin blockchain was the last block before the hard fork was initiated and Bitcoin Cash was created.
- Because the address format of Bitcoin Cash and Bitcoin are the same, stories have emerged of Bitcoin Cash holders sending BCH to Bitcoin addresses by mistake, and losing their coins in the process.