Sirwin
Sirwin
bch

Bitcoin Cash (BCH) - Have I Been Wrong?

By BussTechno | BussTechno | 8 Aug 2021


I have recently come to the realization that I have a negative bias towards Bitcoin Cash (BCH), but have no arguable justification for being anti-BCH.  Perhaps my mining history with BTC in 2009 gave me a MAXI attitude towards the first cryptocurrency and the 2017 fork wars left a bad taste in my mouth.  Maybe I haven't given thoughtful consideration because I felt Bitcoin Cash was trying to capitalize on the BTC name & proponents often claim it is the 'real' Bitcoin despite it being a fork of the original.  For total transparency, I believe BTC is the undisputed King of Crypto and everyone should hold it in their portfolio.  However, Bitcoin is not even my largest allocation- Ethereum is (until I find those dang keys).  I also hodl over 30 other cryptos and 100+ NFTs, so I am not a complete Bitcoin maximalist; you won't find me Max Keiser-ing alts as trash, or telling Elon to F himself. 

One thing is certain, I lack knowledge on the BCH blockchain because I never cared to learn.  Thus I decided maybe its time I rethink my position on it or at least perform some due diligence by taking the time to explore the project more adequately.  There is always the possibility... just maybe... I have wrongly dismissed it.

Note: This article is an extremely high level overview of BCH- it is not meant to describe all of the intricacies of the blockchain.

Bitcoin Cash

BCH is a Bitcoin fork that began in August 2017.  It was born out of disagreements with proposed changes to BTC and how the future of the OG blockchain should look.  These arguments mostly revolved around proposals regarding scaling and transaction speed remediation.  A minority group of miners, investors, and developers did not feel these proposed BTC adjustments were adequate and decided to fork the blockchain creating BCH.  This novel chain would increase the block size, lower fees, and provide faster transaction times versus the BTC network.

Use-Case

The main use-case of BCH is as a digital currency or to facilitate micropayments.  In this respect, it holds an advantage over Bitcoin in that it offers faster transaction speeds and much lower fees.  One example is its use in tipping at noise.cash and read.cash which are great ways to promote active usage of the blockchain and earn some sats. Currently, it is definitely more beneficial to use the BCH network for payments.  The average transaction fee is $0.014 vs Bitcoin's current fee of around $10/byte.  

bch_trans

photo courtesy of bitinfocharts.com

Unfortunately that is the only legitimate use-case I am able to discern in Bitcoin Cash.  There are simply better options for any other use the BCH community has proposed or implemented such as the SmartBCH Ethereum Bridge.  Recently proponents of BCH have made a store of value claim, but IMHO that doesn't mesh well with the idea of a digital cash solution.  This is something the BTC community has realized as they moved away from the digital cash narrative and now solely promote it as digital gold or a store of value, because the aging blockchain does not have the speed or capacity to compete with newer, more robust chains in transaction time, functionality, or costs.  There is distinct value in focusing development and marketing to a core proficiency; in this manner BCH provides a stable, faster-and-cheaper-than-bitcoin option as digital cash.

Differences Between BTC & BCH

Since BCH is a fork of BTC much of the fundamental coding is the same.  These are key differences between the two blockchains:  

Speed: Micropayments on the BCH network are performed within seconds to minutes as larger transactions can take upwards towards 10 minutes.  BTC transactions generally take 10 minutes to one hour, but during network congestion have taken days to process.  However within the Layer 2 Lightning network, BTC micropayments are comparable to BCH.  Notably, the passage of Taproot will likely see improvements to the BTC Layer 1 increasing its speed.

Block Size: BCH has a 32MB block size allowing more transaction throughput versus BTC's 1MB.

Transaction costs: Discussed above and shown in the graphic, the average transaction cost is considerably less on the BCH network.

Network Adoption

BCH has a large community of users and developers.  Transactions on the Cash network have an average of 84K per day since inception. It is available on just about every major exchange and DEX with billions of dollars in daily trading volume.  As of today there are 1021 full nodes in operation, so the network could definitely use some additional decentralization as this a relatively small number compared to BTC's over 12000 active nodes.

Closing Thoughts

I tried to put my bias aside and come into this article with an open mind, however I am prepared to hear your comments on this piece below as I didn't go into extreme depth and there is still contention between the two communities.   BCH definitely has a large network affect and has some technical advantages over its parent blockchain.  It has a strong community that keeps buidling and is also a top 20 coin, so it cannot be dismissed.  That stated, I won't be adding Bitcoin Cash to my portfolio.  As a technology, being faster and cheaper than Bitcoin is not a sufficient reason for me to buy into the network.  There are better smart contract platforms, faster blockchains, and in my opinion more secure and decentralized chains.   BTC has first mover advantage, more adoption, and a better use-case as a store of value.  My attitude has changed on BCH somewhat and now I would describe it as Neutral- I don't see anything majorly wrong with it but it still doesn't interest me.  If you invest or believe in the project I hope it goes to the moon for you... I just won't be on that ride.

Thanks for reading and as always have a great week!

Feel free to follow me on Twitter @BussTechno

How do you rate this article?

23


BussTechno
BussTechno

Technologist, libertarian, and jpegs


BussTechno
BussTechno

I write about Technology, Crypto, and JPEGs. If I write about it and own a position- I will disclose it. *For entertainment only*

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.