Bitcoin Cash – Hidden gem or trash?

In this article we will do a deep dive into everything BCH related and analyse its potential for the 2021 bull run and beyond. 

Bitcoin cash is a hard fork of Bitcoin that was the result of a fuming divorce inside the Bitcoin community back in 2017. Bitcoin cash is an altcoin with a higher block size, faster and cheaper transactions than Bitcoin and in 2021 ( sitting at 600 euro ) it’s still undervalued. No other altcoin has caused so much emotion in the crypto community than Bitcoin Cash, therefore it’s crucial to know the nature of the beast. Let’s fire up the time machine and travel to the origins of this story. 

Mutiny in the Bitcoin ranks 

 

 

Bitcoin has worn many different outfits from its humble beginnings back in 2009. From the t-shirt and ripped jeans of a digital form of money ( remember how a guy bought 2 pizzas with 10 000 BTC? ) to a tailored suit and tie of being a store of value breathing down the neck of physical gold. Now Bitcoin is becoming a standard for storing value long term and even the large institutions are now joining the party and pushing prices to astronomic levels.  

The crypto veterans however still remember in a very visceral way how the Bitcoin wars started back in 2017. The market was red hot and the young and old people worldwide wanted a piece of that sweet Satoshi pie. The mania got the point of actually clogging up the whole damn Bitcoin network. The transactions were lingering for hours on end and people actually paid substantial fees for having the luxury of pumping their Satoshi’s through the congested artery of the first worldwide decentralised network. Things were brutal to say the least! 

The main issue with Bitcoin at that time was the sacred size of the block that’s mined every 10 minutes. The 1 megabyte block size is a blessing and a curse. Die hard Bitcoin fans and developers wanted ( and still do ) to keep the original block size to 1 mb in order to keep Satoshi Nakamoto’s gift to the world as original as possible. Meanwhile, the proponents of a “new way” wanted to improve Bitcoin in order to achieve their dream of having a solid and reliable means of payment accessible to all of us and not just to the privileged few who can cough up sizeable transaction fees. 

The war inside the Bitcoin community raged on and things got superheated. The whole damn Bitcoin community got split in half in a mutiny over the cursed block size. The original Bitcoin guys wanted to stay true to the bone. The others wanted Bitcoin to do more. On the first of august 2017 the violent divorce was set in motion by the Hard Fork that is called Bitcoin Cash. The rest is history. Let’s check out the differences between Bitcoin and Bitcoin cash a bit closer. 

How Bitcoin cash works 

 

Let’s get one thing perfectly clear from the beginning. Bitcoin Cash is NOT Bitcoin. It’s an alt-coin that shares Bitcoin’s name. The technological difference between the 2 is substantial and we’ll dive a bit deeper into it in order to understand all the nitty gritty details. 

Sitting at a comfortably high position in the charts and having a whopping 8 mb block size ( at its original release ), Bitcoin Cash has a noticeable advantage of speed and affordability over the original Bitcoin. After all if you want to have a cheaper and faster means of payment, some sacrifices will have to be made. The mining algorithm of Bitcoin Cash ( Sha-256 ) is on the other hand the same as Bitcoin’s. This is a breath of fresh air for the Bitcoin miners, since having a choice in between different currencies that are ticking away on the same mining algorithm means they can jump on the most profitable coin at any moment. Miners don’t play coin wars. Miners just mine. 

As a compliment to Bitcoin, B-cash is also rocking a fixed supply of only 21 million coins and is also slashing its block reward every 4 years. This is called a halving and in the same way that the eb and flow of the oceans is dictated by the moon’s gravity, the whole cryptocurrency cycle is dictated by the halving events of Bitcoin. Here’s where the similarities end. 

If you want to understand B-Cash, you need to understand the source of frustration of the B-Cash community. When Vitalik Buterin was frustrated with Bitcoin’s reluctance to implement smart contracts feature, he went out to create Ethereum. When the B-Cash community were frustrated with the gargantuan fees and sluggishly slow speed of the Bitcoin’s network, they broke off into B-Cash. The whole essence of B-Cash is its utility. People didn’t want a coin to be hoarded and being put on a pedestal of cold storage HODLing for years to come. No no! They wanted something to be used for daily transactions in the same way we use, … cash! 

While back in 2017 we were flooded with emotions and mutual dung slining that has spread itself to the front pages of even the most obscure financial newspapers, things have since cooled off and we can take a look at the 3 year track record of B-Cash in order to form a sober and objective opinion on it. Let’s take a look if B-Cash is actually any good at what it does. 

Is Bitcoin cash any good? 

 

 

Another interpretation of this question would be; does B-Cash do what it was designed to do? Short answer is; Hell yeah! You see the larger block size allows for more transaction data to be crammed into the block and it allows these transactions to be faster and a hell of a lot cheaper than Bitcoin’s. In fact paying with B-Cash is about 466 times LESS expensive than paying with Bitcoin. 

Again let’s keep in mind that the original Bitcoin has a very long track record and it has been so many things to so many people. It has been a means of payment ( when it was traded under 1 USD ). It was a means of financial freedom and even a somewhat anonymous means of payment for illegal substances. These days however Bitcoin is used for storing value. In the world of out of control central banks and ballooning totalitarian governments, Bitcoin is one of THE best means of storing value known to mankind.

What B-Cash brings to the table is a breath of fresh air that can be fully utilised during the crypto manias that will inevitably come time and time again, dictated by the 4 yearly halving cycle. Imagine that what started out as a skateboard has now become a private jet for the elites. The original Bitcoin has become so scarce, that even all the billionaires and millionaires COMBINED can only own 0.36 BTC each. 

Of course we don’t have this problem with B-Cash. It’s much cheaper and accessible to most of us and we would not hesitate to use it for its intended purpose; transacting on a daily basis. Pretty much most of the merchants that accept Bitcoin also eagerly accept B-Cash amongst the list of all possible alt-coins. Therefore B-Cash definitely has its place under the sun and will be relevant for some time in the future. As you might have imagined, not all is nice and rosy in the Bitcoin Cash world and this slab of Swiss Cheese definitely has some holes in it. Let’s look at a few issues that every savvy cryptocurrency investor should be aware of. 

What are the problems with Bitcoin cash? 

 

 

All the original fans of Bitcoin can agree on one thing. Bitcoin Cash is selling itself as Bitcoin to the unsuspecting new crypto investors. This is off course not acceptable and even misleading. While we have already covered it, it’s definitely worth mentioning again. B-Cash is al altcoin and it has no relation to the original Bitcoin! 

Perhaps this is the reason why B-Cash has been lagging behind all the alt-coins during this cycle. There is by no means the same amount of media coverage on B-Cash, than its original Brother. Some even say that B-Cash is fading into obscurity. The Big Daddy Bitcoin has long blown past its 2017 all time high and is now flirting with the 50 000 USD mark, while B-Cash is still picking its nose by the sandbox together with a few forgotten “gems” from the 2017 bull market’s past. 

Contrary to popular belief, the original team from Bitcoin has learned from their mistakes and they quickly implemented the Segwit upgrade in order to tackle the issues of slow speed and high transactions. Segwit ( short for Segregated Witness ) is a way of splitting the data that goes into the holy 1 mb block in order to have less data polluting the limited block size. Let’s also be realistic and mention that Segwit is not a panacea, but also just a temporary patch on the ever so painful blister of slow speed and high fees. 

Another very important negative side to B-Cash is the fact that their block size actually ballooned to a hard drive crunching 32 megabytes in 2018. This may sound foolish now, but having 32 mb added to your disk space every few minutes can cause serious issues. For once, new miners and people who are running a full node, have to fry their computers for days in order to get the damn B-Cash network synchronised, making the life of smaller B-Cash miners a living hell, to the point of leaving the business of running a full node to huge centralised players. Many miners just frown to this “upgrade” and move on towards mining Bitcoin instead. Again this can cause the risk of a 51% attack on the whole B-Cash network whereby a swarm of computers can actually perform a double spend attack on B-Cash if they ever wanted to. 

Perhaps the worst flaw of B-Cash at this moment, is the fact that once you have a mutiny on your hands, the order may never get restored and even B-Cash has suffered from marital problems. Not so long after the birth of B-Cash, YET ANOTHER hard fork took place on its network spawning the beast called Bitcoin Satoshi’s Vision ( BSV ). The mere mention of this coin can get anyone into trouble, since the self proclaimed digital Jesus of this project ( Craigh Wright ) has been infamous for unleashing his judicial wrath upon the poor souls who dare to criticise him and his “Bitcoin Flat Earth” creation. As you can see there are many flaws in B-Cash at the moment. Why would a prudent investor even look at the damn thing these days? 

Is Bitcoin cash a good investment? 

 

 

If the argument of “buying when there’s blood in the streets” holds true, then the B-Cash street is a bustling abattoir at the current moment in time. It’s pretty much an unloved alt-coin that’s sitting in the corner gathering dust and missing all the DEFI action that’s taking place on the Ethereum network and elsewhere. One might say that the future is not looking good for B-Cash. 

While all of this is true, we have to keep in mind that what B-Cash brings to the table, is still very much useful in times of high network activity and parabolic market mania. Yes the networks will clog up again. Yes the Ethereum fees are going through the roof as we speak and yes there will be delays, tears and frustrations as we head higher in this bull cycle. This can present a good opportunity for B-Cash to shine again. At the moment the old school alt-coins from the past cycles ( like Monero, Litecoin and Stellar ) are also in the same position as B-Cash. They are not in the spotlights yet.

This definitely presents the opportunity to have access to an undervalued asset who’s time is not on everyone’s radar just yet. You see just like Litecoin, Monero and Stellar, B-Cash serves a purpose in the crypto space and all the drama and maximalism aside, it could very well become an alternative to Bitcoin when it comes to making payments in our daily life ( or even transacting value in a fast and cheap way ). As a very long term investment, B-Cash is definitely not a beast that will hold its ranks in the top 10 for long. The DEFI coins and other projects with much better use cases are breathing down the neck of B-Cash, ready to gobble up its market share. Yet for the short to medium term speculator this alt-coin is definitely undervalued at this very moment. Perhaps we won’t blow past 2017 all time high in B-Cash any time soon, but we definitely have a chance to come closer to it. That makes B-Cash definitely worth looking into and keeping on your radar.