BCH Vs BTC – Bitcoin Cash Hard Fork Cryptocurrency Guide?
The digital currency debate between Bitcoin and Bitcoin Cash is raging. Both sides are flinging muddy mildew at each others' camps and is likely just the start. When it comes to watching this play out, we might only be in the bottom of the second inning but looks to be an all out cryptocurrency civil war game going on for the showdown of the bitcoin crown.
Here’s everything we caught wind of with the ongoing BTC vs BCH power struggle. Check back as there will continual updates this as the story unfolds. Comments are welcomed!
- 1 What Are BTC And BCH?
- 2 What Is Bitcoin Cash?
- 3 November 2017 Bitcoin Cash Vs Bitcoin Update:
- 4 BCH Vs BTC Conclusion
What Are BTC And BCH?
BTC and BCH are two forks from the ‘bitcoin' blockchain. Bitcoin (BTC) is the legacy bitcoin we’ve known and loved for years. It’s the main development path for bitcoin. Bitcoin Cash (BCH), on the other hand, is the hard fork that activated on August 1, 2017 and claims to be closer to Satoshi’s original vision for the currency as a true medium of exchange AND a store of value.
In a nutshell (likely more layers than currently discovered) here's the focal point surface level rhetoric from the opposing sides:
- #BTC = to be a store of value where higher fees don't matter (settlement layer)
- #BCH = to be a zero-low fee payment channel (visa/mastercard/paypal use cases)
The irony is everywhere within the bitcoin ecosystem. Decentralization is at the heart of the discussion. The trustless nature of peer to peer electronic value transfer is in question.
It's essentially two groups of thought on how the consensus of the original cryptocurrency should be managed, operated and updated. The tension arises when seeing how the underlying blockchain technology is coded, developed and ultimately mined. Call it polarizing, but the battle for the bitcoin badge will distill down into which coin produces the best use case functionality and features to accelerate the global awareness and adoption.
No matter which storyline is out there, one thing is astonishingly clear:
bitcoin itself is not going anywhere
While common assumption for most are lead to believe this is a “how to scale bitcoin” issue, it is more about who (decentralized?) benefits the most from the way the mechanics and technical aspects are setup in the background. Yes, a major point of emphasis is dealing with “scaling Bitcoin the right way” – and Bitcoin Cash says its' 8MB vs 1MB block sizes are the solution to speeding up transactions while lowering fees which makes for buying a cup of coffee no different than buying a house. Also BCH says it has replay protection during the fork split/claiming/recovering for everything before the split.
However, this unfortunately ushers in the “mining centralization” as only big server farm operations will be able to partake in securing the network and make the economics sustainable at the same time. This is not good for the ‘little guy' or beginner but some argue not everyone in the world was supposed to be a miner and run a full node.
On the contrary, the BTC network has an artificial limitation along with a tainted history of being backed up with unconfirmed transactions and is in dire need of a solution. On the same token, BTC is accused by BCH believers to be centralized at the top and thus does not allow for bitcoin to scale like originally designed (only the tip of the political iceberg).
Whether lightning network and/or drive/side chains that layer on top of the bitcoin blockchain, BTC is in a proverbial race against time to solve the next puzzle piece when it comes becoming a store of value and a medium of payment exchange like BCH aims to do.
The peer to peer blockchain era is in its infancy despite being over nine years old. A new financial frontier of programmable money is dawning upon us and as we peel back layers of the onion, we find quite a few pickles that need to be addressed and prioritized.
Interesting to see one of the first lead developers for bitcoin.org and popular personalities of bitcoin's decorated past recently tweeted:
Bitcoin Cash is what I started working on in 2010: a store of value AND means of exchange.
— Gavin Andresen (@gavinandresen) November 11, 2017
In the leadup to August 1, there was enormous controversy over the validity of BCH. Within a few hours of SegWit activation on August 1, BCH could have been worth pennies but saw it come out and hover between $300-$600 for the first few months of existence. However, if mining companies start devoting hashing power to Bitcoin Cash, then it could be a genuine, usable currency with better scalability than the “original” Bitcoin. It could quickly exceed the value of bitcoin and become the default online currency.
Bitcoin Cash (or Bcash) is led by a client called Bitcoin ABC. The Bitcoin Cash project leaders announced they were going ahead with their fork on August 1. While not much was made of the opening price and even trading volume, it has since been the talk of the space in the month of November amidst Bitcoin topping an all time high of $7,700.
What Is Bitcoin Cash?
Bitcoin is the original version of bitcoin that we’ve used for years. Bitcoin Cash is a proposed fork of the bitcoin blockchain. Supporters of BCH believe that SegWit is attacking some of bitcoin’s fundamental strengths – like its decentralization and democratization. They believe SegWit2x is being led by individuals with ties to shady organizations, and that SegWit2x will be the end of bitcoin as we know it.
Bitcoin Cash plans to solve that problem. The most important thing you need to know about Bitcoin Cash is that it allows for custom block sizing as opposed to BTC core/classic 1mb blocks. The “ABC in Bitcoin ABC, in fact, stands for “Adjustable Blocksize Cap”. That means users can determine their preferred blocksize accordingly. By default, the blocksize is set to 2MB, with scaling possible all the way up to 16MB.
When you visit the official BCH website, you’ll find that their definition of their currency is identical to Satoshi’s original vision for the currency:
“What is Bitcoin Cash? Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.”
Why Are People Suddenly Surprised By Bitcoin Cash?
As it stands before the alleged November 16 fork, Bitcoin Cash BCH is trading at nearly $2,000 with parabolic growth cycles in the past few days. The bitcoin community was in turmoil throughout the month of July when the first fork took place and now the same seems to be repeating in the month of November. The Bitcoin Cash fork has caught many people by surprise and has sent facts like bitcoin's 150,000+ unconfirmed transactions (as of November 11) bottleneck through the cryptosphere.
Back in August, many people thought that the Bitcoin Cash fork would only trigger if BIP 148 were able to split the network. In other words, Bitcoin Cash (and its client, Bitcoin ABC) was just a credible threat to prevent a hard fork.BIP91 (the first part of SegWit2x) locked in and activated last week. BIP148 is scheduled for August 1. After BIP91 locked in, most people assumed the possibility of a hard fork was over. However, Bitcoin Cash supporters had other ideas.
As you can see, this is a war of what/who is right and how to find consensus amongst a decentralized-natured electronic value transfer system where there is no king of the hill. This is where the conversation can begin to take many different paths, but ultimately the decision is coming down to miners, developers, economic value and use case. Depending on what side of the fence you are on, some even despise Bitcoin Cash using and piggybacking off of the name Bitcoin and think it should be called Bcash instead of bitcoin cash. It can go to show you just how divided and polarized many of the public figures are.
Ultimately, there are a few ways this could play out short term and obviously long term. Bitcoin BTC could become a true settlement network. For an analogy, understand the Federal Reserve issues the dollar. On top of that you have secondary layers and payment networks like Visa and PayPal. The same with the bitcoin ecosystem should happen. The main network with its often-bashed 1MB block size base layers will act as the fed and settle transactions. Then, as a layer and network built on top of that, you will have the micro-finance capability of smaller, faster and cheaper payments. As you can see, it would be not be optima for the Fed Reserve to be printing money and trying to process all that PayPal and other major credit card service providers do.
This is where Bitcoin Cash wants to make its claim to fame. By staking the frictionless ability to buy a cup of coffee vs buying a car, they hope to become the component to make that a reality. But what the next layer of Bitcoin BTC will look like is still up in the air, as what can be done with lightning network and/or side chains and drive chains could make BCH obsolete.
It does not take long to look around the cryptoverse and see who the major pushers and backers of Bitcoin Cash are. Roger Ver, Jihan and Dr Craig Wright are three of the major names leading the charge who claim bitcoin needs to be a payment channel not just a store of value. Take a look:
An interesting weekend for BCH. The real battle is to come. Payments and cash
BCH is not about a store of value and long term Ponzi. It is and will be a payment channel. One for everyone. No discrimination based on levels of wealth, open to those on $1 a day or companies equally
— Dr Craig S Wright (@ProfFaustus) November 12, 2017
— Kim Dotcom (@KimDotcom) November 11, 2017
Even Ethereum's Vitalik Buterin chimed in on BCH's spike briefly taking ETH for #2:
— Vitalik Buterin (@VitalikButerin) November 12, 2017
Here is another new update from one of the main leaders behind the BCH growth:
The idea that there is a Bitcoin civil war is ludicrous.
BCH is a cash based payment system. BTC have discarded payments for whatever they plan. BTC is not a substitute for BCH. As such, there is no war.
BCH remains true to the original vision as BTC seeks to try something else
— Dr Craig S Wright (@ProfFaustus) November 13, 2017
If You Own Bitcoin, You Own All Bitcoin Forks
Here’s the most important thing the average bitcoin user needs to know about this latest controversy. If you maintain control of your private keys, then you can choose your bitcoin fork and claim BTC & BCH at a 1:1 ratio split for anything before August 1.
In other words, if you keep your bitcoin in a wallet (Trezor, KeepKey, Ledger Wallet etc) where you control your own private keys (i.e. they’re not controlled by the exchange), then you’ll own both Bitcoin Cash (BCH) and Bitcoin (BTC).
At this point, most users recommend storing your bitcoins before August 1 and waiting to see what happens. Let the markets dictate demand. Let miners devote their hashing power to the most profitable option. Then, once the dust has settled, you can choose whether you want to turn your legacy bitcoin into Bitcoin (BTC) or Bitcoin Cash (BCH).
As an example for how this plays out – if you have 5 BTC before the fork, then you’ll own 5 BTC and 5 BCH after the fork (assuming you’re holding bitcoins off an exchange, and you’re in control of your private keys). It’s as simple as that. Now as a side note, if you were to buy bitcoin (BTC) after August 1, 2017 you would not be honored the Bitcoin Cash BCH hard fork blockchain split as a new series of historical transactions is now being made.
Make sure to search for how to claim your Bitcoin Cash BCH so you can begin trading it or can keep it where it is and hold it for the long term. Maybe both go back and takes two coins to do two different things even though they are one in the same.
For touting the horn of being trustless/decentralized and no leader, the Bitcoin ecosystem is very political and the people who have been around the longest (either for understanding or obtaining coin stashes) and who contribute the most to the network seem to have the biggest influence and persuasion.
Is Bitcoin Cash BCH Worth Anything?
If you think BCH isn’t worth anything, check again. You can buy BCH futures today on ViaBTC, where they’ve been consistently trading between $200 and $900 since being introduced but have since reached as high as $2,500 on some exchanges (with what seems to be 80% transactional value done in South Korea at the time of writing). Expect this number to fluctuate faster and more extreme than any of bitcoin's “crashes/bubbles“.
Users are buying BCH today with the expectation that it will rise to the value of today’s bitcoin (or higher) in the future. They’re gambling on the fact that miners will support BCH after August 1, and that the currency will have enough hashing power to compete with the other fork.
So yes, BCH is certainly worth something. It’s trading at about 1/5 to 1/7 the value of Bitcoin at the moment. Obviously, there’s a tremendous amount of risk attached to the coin which is why it’s a volatile marketplace.
Careful Where You Read: Censorship Is Rampant
One of the biggest problems with the BTC versus BCH debate is that censorship is rampant. One of the internet’s largest bitcoin communities, Reddit.com/r/bitcoin, has been actively removing any comments mentioning BCH as the future of the bitcoin blockchain.
The website’s competing subreddit, /r/BTC, has become an uncensored hotbed for BCC discussion. If you want to get an informed update on the latest news in the BCC versus BTC debate, make sure you check multiple sources.
It’s important to note as well that both sides are calling the other scam artists, or mentioning ties to shady organizations. The BCC supporters seem to believe SegWit2x supporters are all paid by corporations, while SegWit2x supporters seem to believe that BCC is a Ponzi scheme. As with anything on the internet, take everything you read with a grain of salt.
November 2017 Bitcoin Cash Vs Bitcoin Update:
There are many observations and assumptions being made about the spike of bitcoin cash price and what are its main driving forces. While those who are new to the play, there are many and a lot of it involves ‘kingpins' with moving funds and coins around to fluctuate the newly formed low-trade volume altcoins (which technically bitcoin cash is an altcoin).
As we see the history of Bitcoin Cash unfold from August 1 to mid-November 2017, we can see how many of the ‘whales' of bitcoin (large holders of bitcoin – usually a few hundred coins) sold off their BCH and exchanged it for more BTC. Now depending on the margins and numbers you trade at vs what amount of 1:1 ratio exchange you had prior to August 1, this can be a dramatic tool and mechanism for moving the needle on the price of bitcoin cash.
As long time bitcoin holders buy up everyone pawning off their bitcoin cash for ‘free money', it drove the price of BCH to low $300 and set there for months. Then, we see it hit another tier to hover around $600 and then decided to 2-3x itself in a matter of hours/a day. We can expect this kind of extreme manipulation to begin to become more frequent but should be a great way to continue learning about how the world's money system is being shaken.
Yes, fees on the Bitcoin main chain will rise to +$100 eventually.
Yes, fees on Bitcoin payment channels will be trivial.
Yes, this is almost certainly a spam attack, likely to pump Bitcoin Cash. https://t.co/WFBb9ya7O1
— Tuur Demeester (@TuurDemeester) November 12, 2017
66.59 Billion USD is the Gaming market expected by 2020.
We expect that 60-65% of this market will be using BCH at that time for a 41.6 billion USD injection into BCH. The CAGR is 10.81% on this market alone.
These payments will subsidise BCH as global cash.
— Dr Craig S Wright (@ProfFaustus) November 12, 2017
1. I consider BCH a legitimate contender for the bitcoin name. I consider bitcoin's *failure* to raise block sizes to keep fees reasonable to be a large (non-consensual) change to the “original plan”, morally tantamount to a hard fork.
2. Theymos's censorship.
— Vitalik Buterin (@VitalikButerin) November 14, 2017
What's your take? Will bitcoin be the settlement network like the federal reserve and bitcoin cash be like Visa/Mastercard/Paypal?
Bitcoin Cash Pump Manipulation
The November 9 – November 11 swapping of Bitcoin and Bitcoin Cash prices seems to be orchestrated vs organic. Because the SegWit2x agreement was abandoned, many think this is another attempt for BCH to take off and many BTC loyalists are calling out key players and names as the ones who are pumping only to dump. We will update this section in the near future so we can organize facts and get the storyline right.
BCH Vs BTC Conclusion
As usual, #BuyMoreBitcoin should be the first conclusion. But in reality, patience is key.
Bitcoin and Bitcoin Cash can co-exist but you will find many camps in the crypto world that say otherwise and are working to prove it too. What happens with bitcoin's blockchain cryptocurrency is yet to be seen. We could have a merge in 6 months where bitcoin cash is bitcoin and bitcoin is bitcoin cash or we can have opposing views and use cases that make them competitors under the same name.
On August 1 were were saying to stay tuned for what happens to bitcoin. And now in mid-November we are saying the same thing about bitcoin cash and how it could gain traction in the mind of investors and speculators. At this point, your guess is as good as anybody’s.
We will have much more on the Bitcoin Cash BCH vs Bitcoin BTC debate in the near future!
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