For years I have been a Bitcoin maximalist. Out of the 1000+ alt coins that are not BTC, very few interest me. Since I started studying Bitcoin in 2011, very few alt coins ever tickled my fancy. Namecoin, the decentralized DNS system, aka “The original alt,” was the first to intrigue me. When Byteball came along with its “non-blockchain” consensus method, that caught my attention. Ethereum is a game changer, finally using network power for more than just security. Monero seems useful, as the darknet markets demand an anonymous crypto to conduct their grey and black market business. I could have included a few others in this list, but the vast majority are cheap copies with no useful purpose.
Bitcoin Cash (BCH) doesn’t seem to fit in any alt coin category. It’s basically BTC if BTC had adopted a blocksize increase instead of SegWit. It doesn’t bring anything groundbreaking to the table, but rather rights what some groups consider to be a wrong in the Bitcoin protocol. The price of BCH doesn’t seem to follow the general alt coin price trends. It has become its own monster.
The greater cryptocurrency community is quite polarized on the subject of BCH. There is a loud base of Bitcoin maximalists that despise BCH, calling it an attack. This group doesn’t miss an opportunity to throw shade on the recently forked crypto, often referring to its biggest supporters Roger Ver & Jihan Wu as traitors, scammers, and worse.
When BCH first launched, I didn’t think much of it. While I watched the BTC price run up significantly before the fork, I thought “Well, irrational markets are irrational,” and paid it very little attention. In the months since that time, there have been developments that caused me to take another look at BCH. The failed SegWit2X fork seemed to have started a war, with the first salvos recently fired.
Because BCH and BTC can both be mined by the same hardware, large mining pools can now disrupt the BTC blockchain using one neat trick. The BTC blockchain recalculates difficulty every 2016 blocks. 2016 blocks represents 2 weeks when blocks are found once every 10 minutes, but in reality it can take less time if blocks are found faster and more time if blocks are found slower. If a large mining pool so desires, they (and anyone else in on the plan) can point all hashing power to the BTC blockchain for about 2 weeks and make the network difficulty as high as possible, then once the difficulty is recalculated the BCH-friendly mining pools quickly point their hashing power at the BCH chain. This makes for slower blocks on the BTC chain, exacerbating the issue of the large mempool (backlog of transactions waiting to be confirmed) and causes fees to increase even higher. In recent weeks, we have seen the mempool regularly balloon to over 100Mb and the average BTC fee skyrocket to over $15 USD. One important competitive advantage BCH has over BTC is the EDA, or “emergency difficulty adjustment.” When the mining pools switch hashing power from BCH to BTC, the BCH chain doesn’t “starve” for weeks like the BTC chain, as the network difficulty is quickly recalculated, and blocks start getting found about every 10 minutes as usual.
Some may call it “Dirty pool,” and some may say “All is fair in love and crypto war,” but right now the huge fee needed to send a BTC transaction is destroying the usability and functionality of the long dominant BTC. Because BCH is well represented on the major exchanges and the fee to send a transaction is just a few pennies, there is finally a real use case for BCH. If you want to send a small value, BTC is no longer suitable. Many other alt coins will fit this use case as well, but because BCH works almost exactly like BTC, long time users of BTC will find that they already know the ins and outs of BCH.
Since the failed SegWit2X fork, in addition to the mining shenanigans we have also seen a boost in BCH marketing. We have seen the price run up and briefly overtake Ethereum as the #2 valued cryptocurrency before getting cut in half and falling back to the #3 position. The fee market is just one of many factors to consider when choosing a cryptocurrency to conduct business with. With the cryptocurrency space in constant flux, the future is hard to predict, but it looks like BCH will be in the conversation for the foreseeable future.