Today I’m going to be talking to you about something called Bitcoin Cash, what is it? Where did it come from? Who started it? Do you already have some and not know it? What’s it worth and what to do with it?
You already have the Bitcoin Cash and don’t know if I want to show you how to sell it and or buy more depending on what you believe the most prudent move to be, so let’s get into it.
Bitcoin Cash is a crypto or digital currency just like any other and it came into existence on August 1st, 2017. Now what’s interesting about Bitcoin Cash is the way that it came into existence. Bitcoin Cash was started by something called a hard fork of the Bitcoin network. Now the way this works is if Bitcoin itself is governed by a set of rules, and everybody using the Bitcoin protocol agrees to those rules, this is called consensus.
Now if you did not agree with the rules governing Bitcoin you could break with consensus and cause a hard fork, this means that you’d be creating your own coin, you’d be following the previous chain of transactions, but at some point you would split away into your own currency, and this is exactly what has happened. On August first Bitcoin Cash implemented these new rules and the moment they started following these new rules, the very next block that they mined they split from Bitcoin and became something different.
This is where people are getting a little angry because the people that created Bitcoin Cash wanted this to be Bitcoin, they wanted Bitcoin Cash to become the main Bitcoin. But the problem with that is Bitcoin is a consensus system, so that means whatever the majority of people want and think that is what remains Bitcoin, and unfortunately for those that created Bitcoin Cash that has by and large not in the case at least in the first week of Bitcoin Cash existing.
So do you already have Bitcoin Cash? Well, that’s pretty easy to figure out did you have Bitcoin on August first during the split? If you did then you also have the same amount of Bitcoin Cash if you had one Bitcoin you now have one Bitcoin and one Bitcoin Cash, but wait there are some details to consider. If you had Bitcoin in a private wallet prior to August 1st, yes indeed you do have Bitcoin Cash, but accessing it and being able to move it and play around with it may be a bit more of a technical issue.
While it’s like the ledger and the Trezor have implemented ways to allow you to do this while others are still working on the problem I will be doing more write-ups on as many platforms as I can to show you how to do this but I have to learn how to do it first. So ledger and Trezor will be coming up and then as I learn more I will share it with you.
If you didn’t have Bitcoin in a private wallet at the time and rather had it in an exchange, then you are now at the mercy of that particular exchanges policy. Now many exchanges have already credited users with their Bitcoin Cash that they’re entitled to, while others are waiting a bit. Coinbase itself said they will not even going to deal with it and they’re just going to keep it, so you’re going to have to take a look at what exchange you had Bitcoin on and what their policy is.
Bitcoin is a protocol that is based on consensus, that means people agree to the rules and whatever the most people agree with remains Bitcoin, and as we’ve seen with this fork, by and large, the original chain has the most support, Bitcoin Cash has not even come close.
So Bitcoin Cash has never achieved parity in price with the original Bitcoin. Out of the gate, it did have a nice little bump where it went up to about 700 U.S. dollars but since then it’s fallen off quite a bit. Currently, it’s in the low 1500s and it seems to be following a trend line where it will likely continue to drop, now can it go back up? Yeah absolutely, anything’s possible especially from what we’ve seen from the old markets, altcoins, they can get pumped and dumped all the time so I wouldn’t be surprised if we saw some more of that in the future from Bitcoin Cash. But it doesn’t look good.
You also have to take into consideration how businesses and wallets have been approaching it. By and large pretty much the entire industry has said that this is an alt coin, this is not Bitcoin, and they are treating it as such they’re labeling it under a different ticker symbol, they are referring to it as either Bitcoin Cash, or to the dismay of the developers BCash, and the kind of like I said the symbol tickers there’s been confusion around that too, XBT, BCC, BCH, people don’t know how to treat it, but they are not treating it like regular Bitcoin.
Not only that but during the price dump of Bitcoin Cash we also saw a huge rally in the original chain of Bitcoin and this could be indicative of people taking their Bitcoin Cash and dumping it on exchanges. A lot of people still don’t even know how to access their Bitcoin Cash and we still seem the price draw of this much. So my belief is as more people are able to access manipulate and sell their Bitcoin Cash, the price will just continue to drop. I could be wrong but this is just my opinion. Beyond this, not a lot of miners have jumped on board with Bitcoin Cash, and because of that, the mining behind it is incredibly centralized. It looks like maybe two entities, perhaps three are mining it, which isn’t necessarily a good thing when you want to have a decentralized payment network.
Currently, right now because of the difficulty level of mining, which it borrowed from Bitcoin and needs to be adjusted over time, it is 163% more profitable to be mining on the main Bitcoin chain versus Bitcoin Cash. On top of this, the lack of mining has contributed to slow block times and inconsistencies in when your transaction actually gets put through the network.
Finally, the removal of something called segregated witness which fixes something called transaction malleability, I believe was a big mistake. If people wanted to add big blocks and they really believed in it, I think it would have been prudent to stick with the New York agreement and have more sway there, but because this split who knows if that’s even going to happen anymore. On top of that removing SegWit has opened the Bitcoin Cash up to transaction malleability attacks.
So via BTC.com, one of the exchanges actually the exchange that was responsible for launching Bitcoin Cash underwent a transaction malleability attack just recently and had to shut everything down for a little while and weren’t allowing transactions and deposits. So, by and large, I’m looking at a lot of things here and it does not look good. Me personally, full disclosure I have liquidated as much of my Bitcoin Cash as I could it took some time I was able to do it through my Trezor and my ledger I still have some on a keep key and I’m waiting for that company to release a method through which I can easily access the Bitcoin Cash, but as I’m sitting here waiting for the value of Bitcoin Cash is going down. I was talking about the dollar value well what about the value in Bitcoin which I want to obtain through this, at one point one Bitcoin Cash is worth 0.3 Bitcoin which is pretty good, that’s when it was up around $700 well now one Bitcoin Cash will get you 0.06 Bitcoin, that’s a huge fall and I don’t see that correcting at least in the long term I think it will continue to stay around that level or fall more as more people are able to liquidate.
Now there are going to be a small and passionate group of people that are really mad at me for voicing my opinion here but here’s the deal: Bitcoin is consensus and consensus have shown us what the true chain is.
If things had turned out the other way around and I didn’t like it I would still have to admit to myself that Bitcoin Cash would have been the one true Bitcoin chain and that’s not what panned out. Even still if things turnaround and all the sudden Bitcoin Cash is able to get the majority of hashing power the majority of businesses and everybody jumps on board, I’m going to have to admit to myself that Bitcoin Cash is the real Bitcoin at that person because that’s the one that has consensus.
So I mean I don’t hate you if you’re using Bitcoin Cash, if you truly believe in that system then the price shouldn’t matter to you and you should follow that chain. It’s fine we have a choice and I think that’s one of the miracles of cryptocurrency.
If we’re being realistic here all this arguing and bickering has never been about the rules because anyone is allowed to follow any rules they like, that’s how cryptocurrency works. If you don’t like it you vote with your feet and you go where you want to be. The real argument here is who gets to be called Bitcoin and in my head, it’s the one with the most consensus, and when you look at it, the original chain is taking that crown right now, and people are just going to have to deal with that, that’s just how it is.
So while I don’t mind if people use Bitcoin Cash, in fact, I encourage them to if they really, really believe in what Bitcoin Cash stands for. I also don’t understand the anger of people not wanting the other Bitcoin to be the one true Bitcoin, so we’re just going to wait and see how things continue to pan out.