The Bitcoin Cash hard fork has just become reality. Unlike other forks, such as Bitcoin Gold and SegWit2x, it did not create a new cryptocurrency. However, BCH gained the attention of analysts and investors thanks not to significant improvements, but due to its shot at becoming the “real” Bitcoin. Over the course of a few hours, BCH’s value varied by several dozen percent. Does it really have the potential to replace the original chain?
— Bitcoin Cash (@BITCOlNCASH) November 13, 2017
The key reason for Bitcoin Cash’s fork was implementing a new system for adjusting mining difficulty. BCH struggled with large fluctuations in the hash power of the network, caused by miners jumping around to the most profitable chain. The changes were supposed to stabilise the network and process transactions without shorter intermissions. Although this improvement is much needed, the SegWit2x hard fork attracted much more attention. When SegWit2x was cancelled, some people expected that miners might transfer their hash power to Bitcoin Cash.
The power of hash
As can be seen from the hash power chart, there have been significant fluctuations that have caused BCH transactions to be processed at an express speed for several hours, like the example where 11 Bitcoin Cash blocks were mined in just 10 minutes. This has unleashed enormous speculative potential, which propelled BCH’s value as high as $2400. For some time, it even took 2nd place in the cryptocurrency market, dethroning Ethereum.
Of course, there followed a rapid correction, but it is still worth more than in October, at around 300 dollars.
Bitcoin Cash hard fork – what’s next?
Not even the world’s leading experts in cryptocurrencies are sure which direction the competition between BTC and BCH will take. A pressing problem are the dramatically high transaction fees. Users are sharing screenshots showing up to $180 per transaction, which doesn’t bode well.
Some say that the confusion is the result of a FUD strategy used by Jihan Wu, Roger Ver, and others who wanted to increase the block size. If so, BCH’s current behaviour brings to mind a pump and dump scheme, where less aware players will lose out.
What is your opinion? The poll on our fanpage clearly shows the community’s point of view. The influence of miners, whales, and other large entities may be more important than many users assume.