An Offspring of Necessity
In the last few weeks, Bitcoin Cash has enjoyed a massive rally, and after touching a high of $1700, it’s currently priced at around $1300. Watching Bitcoin Cash scaling new heights is like watching a child who was dismissed as a complete failure grow up to be phenomenally successful. It’s simply delightful!
When the idea of Bitcoin Cash was first proposed, naysayers dismissed it out of hand. Some predicted that it would be a stillborn venture, while many others claimed that the fork was completely unnecessary. In fact, the announcement of Bitcoin Cash’s August 1 hard fork caught a lot of people by surprise, as the idea of Bitcoin Cash wasn’t being taken seriously.
Contrary to the opinions of its critics, Bitcoin Cash was born out of sheer necessity. In 2017, increased latency, skyrocketing fees, and issues of unreliability in the Bitcoin network confirmed that capacity had hit the proverbial ‘invisible wall’. Bitcoin stopped growing, and its market share among cryptocurrencies went from 95% to 40% within a very short period. The writing on the wall was clear – legacy Bitcoin’s block size limit of 1MB, which allowed only 3 transactions per second, was no longer tenable.
So, on August 1, 2017, Bitcoin went through a hard fork, and Bitcoin Cash was born.
What does Bitcoin Cash bring to the table?
- As part of a massive on-chain scaling approach, the block size limit for Bitcoin Cash has been raised to 8MB, compared to just 1MB for legacy Bitcoin. This has resulted in a massive increase in capacity, ensuring that there is ample juice for everyone’s transactions. That’s not all – both transaction fees and confirmation times have gone down. And yes, the network is growing too.
- Bitcoin Cash uses a new SigHash type for its transaction signatures, which enables it to provide replay protection, and improved hardware wallet security. The new transaction signature also eliminates the quadratic hashing problem.
- Bitcoin Cash’s new Difficulty Adjustment Algorithm (DAA) has reduced the time required to adjust the proof-of-work difficulty when compared to Bitcoin’s 2016 block difficulty adjustment interval.
Who are the developers of Bitcoin Cash?
The democratic, distributed nature of Bitcoin Cash is reflected even in the way the project is being developed and maintained – there is no single development team calling the shots, unlike in the past, but multiple independent teams of developers working to move the project forward.
According to the official statement on the website of Bitcoin Cash, the decision to keep the development process decentralized was a conscious decision – no single project or group can wrest control. With independent teams of developers providing software implementations, the future of Bitcoin Cash is secure. It makes Bitcoin Cash’s protocol development immune to political and social attacks.
Not All Sunshine And Roses
While Bitcoin Cash has successfully lowered the transaction fees as well the transaction times, it isn’t without its negatives.
- Bitcoin Cash needs more storage space for the Blockchain as compared to Bitcoin.
- Bitcoin Cash requires more resources in terms of traffic for a full node.
- Due to the higher storage and traffic requirements, running a full Bitcoin Cash node is always going to be more expensive than running a full Bitcoin node. So fewer people can afford to run a full node, and that is going to lead to a more centralized system.
- Bitcoin Cash’s development team is relatively inexperienced, while the developer team of Bitcoin has several years worth of experience.
The Future of Bitcoin Cash
You’d be hard-pressed to find a subject as polarizing as the future prospects of Bitcoin Cash at the moment. There are people who claim that Bitcoin Cash will soon replace Bitcoin as the leading cryptocurrency. Then there are people who are absolutely convinced that Bitcoin Cash is a scam, or just a copycat of Bitcoin at best. For instance Max Keiser has accused Bitcoin Cash of plagiarizing Bitcoin, and riding Bitcoin’s coattails.
But it doesn’t have to be a winner-take-all scenario. Amidst the ongoing heated debate about the viability of Bitcoin Cash when Bitcoin already rules the roost, there are people who believe that both Bitcoin Cash and Bitcoin can coexist. And that would be ideal for the future of cryptocurrencies.