The Breaking of Bitcoin: BCH RisesDate Written: November 12 2017 Written By: George Miller It’s been a dramatic week in the cryptocurency world. Bitcoin’s controversial SegWit2x fork was ultimately called off; the rally that had driven the price of BTC to all time highs of nearly US$8000 unraveled to roughly US$6000, a support that seems to be holding–for now.
What the Fork?
As the Bitcoin community has failed (yet again) to reach a consensus about how to resolve Bitcoin’s scalability issues, concerns about the long-term future of Bitcoin have become more serious. As the currency continues to become increasingly popular, its network is forced to process more and more transactions.
Because the Bitcoin block size has long been stuck at one megabyte’s worth of data for every ten minutes, only seven transactions can be confirmed per second. (For perspective, Visa’s payment system is capable of handling approximately 24,000 transactions per second.)
SegWit2x was only the latest in a series of proposed solutions that would have solved the scalability problem. However, the proposal was maybe the most controversial yet. It was proposed in the so-called “New York Agreement”, which was drafted by dozens of companies spread across the globe.
The Bitcoin Core developers spoke out adamantly against the fork, saying that it would only repeat mistakes of the past and that its lack of adequate replay protection could endanger the entire Bitcoin ecosystem. Others in the Bitcoin community scorned the fork as the “corporate takeover” of Bitcoin; others still expressed concern that the frequent forking that Bitcoin has experienced in recent months was only fragmenting the market.
Bitcoin’s Foundation Shakes as Bitcoin Cash Soars
Traditionally, forks have been a very positive factor for the price of Bitcoin. This is because Bitcoin holders who hang on to their coins through the fork receive an additional set of the new cryptocoins created in the equivalent amount of their Bitcoins. So, as expected, the price of Bitcoin jumped to new heights in the days preceding the fork.
Now, however, investors are growing increasingly nervous as the price has faltered significantly. What’s additionally disturbing is that Bitcoin’s scalability problem remains unsolved, and the pressure on the system’s limited capacity is only continuing to build. If the problem cannot be solved, there will be no choice but to seek an alternative network. So far, the most promising candidate is Bitcoin Cash, which was created as a result of the SegWit1x fork that took place on August 1st of 2017.
It appears that some Bitcoin users have already begun to make the switch. In tandem with the fall of Bitcoin’s price, the price of Bitcoin Cash (BCH) rose to record new heights, breaking through US$2400 on November 12th, more than three times its price just three days prior (roughly US$650).
However, BCH experienced a sharp correction just hours after reaching this new high when CoinMarketCap excluded BitThumb’s price, according to a report from The Merkle. The coin dropped about US$900 in just one hour. Even with this correction, however, the Bitcoin Cash market is still surging.
Is It Time to Switch to Bitcoin Cash?
In an interview with CoinDesk, Jiang Zhuoer (founder of BTCtop mining pool) attributed the apparent exodus from Bitcoin into Bitcoin Cash to “2x fans”. He remakred that “bitcoin is going to die”, and that “more and more bitcoin holders are starting to understand what is the real bitcoin.”
His sentiments were echoed by Jake Smith of Bitcoin.com, who also believes that the migration from BTC to BCH is more than just a passing phase. Bitcoin Cash developer Juan Garavaglia commented that
“Bitcoin Core is unable to execute, has a poor roadmap [and is] disconnected with market needs,” adding that “We [the developers of Bitcoin Cash] can execute, we have smooth coordination with key market actors and we address market needs.”