Following the cancellation of SegWit2X, the expectation was that money directed towards Bitcoin to collect the new forked coin would be redistributed towards altcoins. Ethereum, in particular, was expected to muster greater momentum, in light of news regarding the platform's implementation of ZK-STARK which was conceptualized to improve anonymity of transactions.
In the event, it was Bitcoin Cash that turned out to be the biggest gainer, in excess of 100%, rising to unprecedented heights and sitting pretty at $1295. In hindsight, this should not come as a surprise. SegWit2x proposal for increased block size initially garnered a lot of support before most parties had cold feet.
The unvarnished truth is that the Bitcoin network has gradually slowed down in the last few years, causing inordinate transaction delays and unreasonable fees. With the price surge, Bitcoin Cash is currently upto 70% more profitable to mine. A lot of miners have therefore devoted their hashrate towards BCH.
The volume of transactions in the Bitcoin Cash blockchain over the past 24-hour period exceeds that of Bitcoin. As things stand, in the short-term, Bitcoin Cash has been the major beneficiary of SegWit2X cancellation.
Whether the cancellation was orchestrated by Bitcoin Cash backers or it was simply that the miners and investors who were in favor of SegWit2X decided to throw their weight behind Bitcoin Cash remains to be seen. Can Bitcoin Cash sustain its momentum? Or is it just a transient classic pump and dump case?
Charlie Lee, founder of Litecoin, is not impressed. “Bitcoin cash is trying to scale everything on-chain but this doesn’t work for a decentralized system,” he said in an interview. “Bitcoin cash is also miner-controlled and miner-centralized. It’s pretty much all sorts of wrong.”
He may well be right. Bigger block size alone does not solve all the problems. Indeed, it may even cause some new problems.