Is Bitcoin Cash (BCH) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations.

By CryptoBoomer | Investments | 3 weeks ago

$6.02 tipped


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Bitcoin Cash (BCH) is often seen as the most successful fork of the original Bitcoin (BTC). While there are other cryptocurrencies that adopt the name of “Bitcoin” as well (for example BSV or BCD) but undoubtedly, Bitcoin Cash is significantly more popular than all these other Bitcoins.

The only Bitcoin-something that is still more popular than Bitcoin Cash is obviously the original Bitcoin. This article will explore why BCH matters and if BCH is worth your money for long-term investment or not. Let’s get started right away!

Bitcoin Cash - Summary

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The most popular name in cryptocurrencies has always been Bitcoin. The original project of Bitcoin was founded by an anonymous person who called himself Satoshi Nakamoto. After the global financial crisis, Satoshi Nakamoto felt money should be controlled by the people and not by a centralized entity that had breached people’s trust over and over again.

The idea of Bitcoin successfully caught the attention of many cryptographic developers. Many of those who are now hardcore Bitcoin Cash supporters originally were part of the group who actively followed Satoshi’s vision.

Bitcoin was intended to be a decentralized peer-to-peer electronic cash. It was meant to replace the outdated banking system, especially when it comes to cross-border transactions. The original supporters of Bitcoin back in its earliest days often “bragged” about the speed and transaction costs of sending Bitcoin from different countries.

However, things changed quite rapidly in 2017, along with the rising popularity of Bitcoin itself. Two years ago was the year that changed everything. Bitcoin quickly shot up in its price against the USD and other fiat currencies. However, the blockchain got clogged up quite easily due to all the newcomers who started buying up Bitcoin.

At one point, Bitcoin’s transaction costs became quite expensive and unmanageable. Transaction speed became very slow, and it could take hours just to complete one single transaction. Due to all these problems, many of Bitcoin's original supporters became disillusioned with the Bitcoin network. They started questioning whether Bitcoin would be able to manage all the newcomers’ transactions.

And to “fulfill” Bitcoin’s original vision as decentralized peer-to-peer electronic cash, some well-known supporters proposed a block size limit increase. Roger Ver, the CEO of Bitcoin.com, was one of the main figures of the proposal. 

The pro-changes believers thought it was a good idea to increase Bitcoin’s block size upper limit from 1 MB to 8 MB. With the block size limit increase, Bitcoin would be able to process many more transactions and it would also lower the transaction costs that were complained by many users.

However, this proposal was challenged by many of Bitcoin's other supporters. The ones who took the “contra” side believed that the idea to increase the block size limit would make life harder for miners due to the cheaper transaction fees. They felt afraid that the whole Bitcoin mining business would be unprofitable in this case.

They also stated that Bitcoin had already been seen as “digital gold” and its main purpose had already shifted to “store of value”. That’s why they believed that increasing block size upper limit was not supposed to be the main priority anymore. 

Both camps could not find a solution that was considered acceptable by both parties. Due to this reason, eventually, the pro-changes community forked the original Bitcoin on August 1, 2017. Specifically at block 478557.

The “new” Bitcoin that came after the fork was then named Bitcoin Cash. They used the name Bitcoin Cash because they believed the original purpose of Bitcoin was to be used as cash. The name “Cash” behind “Bitcoin” is meant to honor the original vision and purpose of Bitcoin itself.

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After the fork incident from the original Bitcoin, Bitcoin Cash has experienced another block size limit upgrade on May 15, 2018. At the present time, Bitcoin Cash’s block size limit is up to 32 MB. 

For comparison, Bitcoin is only able to handle around 4.4 transactions per second (TPS), while Bitcoin Cash can manage up to 116 transactions per second. This is possible due to a much larger block size of Bitcoin Cash.

Apart from the differences in speed and transaction costs, there’s not much technical difference between Bitcoin and Bitcoin Cash. Considering BCH is a simple fork of BTC, they offer many similarities. The script, the blockchain explorer, and even the legacy address of BCH, they are quite similar (or even the same) with Bitcoin.

For your information, many BCH supporters often refer to BTC as “Bitcoin Core,” and they call BCH as the “real Bitcoin”. Of course, the terms have been debated countless times by other crypto enthusiasts.

Analyzing Bitcoin Cash Team

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There’s no “official co-founders” of Bitcoin Cash, as it’s a forked version of the original Bitcoin itself. Many of Bitcoin developers from many years ago started to develop for Bitcoin Cash since its existence. One of the more famous developers who shifted support from BTC to BCH is Gavin Andresen. Gavin hasn’t contributed to Bitcoin’s development since February 2016. 

Another famous supporter of BCH is Bitcoin.com’s CEO Roger Ver. Roger is probably the most prominent face of BCH supporters due to his consistent appearance in many crypto conferences promoting BCH. 

And don’t forget Bitmain’s co-founder Jihan Wu. Bitmain is mostly known for its ASIC chips that have been used to mine BTC. And Jihan Wu, who got rich from his mining business, is also a big supporter and holder of BCH.

Previously, Craig Wright (the guy who became famous for claiming he is Satoshi) also supported BCH. But due to the split between BCH and BSV (Bitcoin Satoshi Vision) in late 2018, Craig Wright is no longer a BCH supporter. Another famous ex-BCH supporter, Calvin Ayre, also decided to shift his support to BSV.

We won’t get into too many details here about what happened between BCH and BSV, but basically, there was a split between the two camps. The main arguments were about the changes to the script and the block size limit upgrade. 

The ones who decided to stick with the original script went to support BSV while the camp that supported BCH introduced two new opcodes into the script (OP_CHECKDATASIG and OP_CHECKDATASIGVERIFY).

For your information, BCH was originally known as BCHABC during the earliest days of the split, while BSV was known as BCHSV. But along with time, BCHABC came out as the more popular coin compared to BCHSV. That’s why BCHABC became BCH in most crypto exchanges while BCHSV became BSV.

Bitcoin Cash Future And Potential Roadblocks

The thing about Bitcoin Cash is that it’s mostly known for being a “faster” and “cheaper” Bitcoin. Its future is probably dependent on how big the original Bitcoin will be in the future. Many people have accused Roger Ver of misleading Bitcoin.com’s users to think that Bitcoin Cash is the “real” Bitcoin. 

That’s why the future of Bitcoin Cash most likely will be dependent on Bitcoin’s big-name itself in the eyes of crypto traders as well as in the eyes of the casual users outside crypto enthusiasts.

Bitcoin Cash mostly can be found on crypto exchanges that also accept Bitcoin. Due to its background as a fork of Bitcoin, it was quite easy for crypto exchanges and wallet services to start adopting Bitcoin Cash, as the code base was already the same.

To talk about the future of Bitcoin Cash is a bit complicated. At one point, Bitcoin Cash’s future depends on the big name of Bitcoin itself. At another point, Bitcoin Cash supporters have to convince the world that Bitcoin Cash works like Bitcoin but faster and cheaper. 

And to be honest, it’s not that easy to convince people outside the BCH community. In many general crypto communities such as the cryptocurrency subreddit, many people actually criticize BCH for always comparing itself to the original Bitcoin.

That being said, BCH’s future can be really bright if BTC itself can consistently go up in terms of price against fiat currencies, especially because it’s really easy for a platform or wallet service or exchange to adopt BCH if they have already accepted BTC.

Bitcoin Cash Adoptions

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Before you can decide whether Bitcoin Cash is a good long-term investment or not, it’s wise to learn where the coin has been adopted. In terms of cryptocurrency exchanges and wallet services, BCH is actually one of the most adopted altcoins.

Many wallet services that support Bitcoin typically also accept Bitcoin Cash. And about crypto exchanges, you can easily get BCH on Binance, Coinbase Pro, Bithumb, and many other well-known exchanges. 

Outside the crypto market, BCH has been adopted in many local restaurants and hotels all over the world. Countries like India and Venezuela have started to adopt BCH. Travala.com, a popular hotel booking website, recently also adopted BCH as one of the available crypto payments.

Correlation Between BTC And BCH Price

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Let’s talk about an external factor that might affect BCH price in the long-term. Well, without a doubt, altcoin prices almost always follow Bitcoin price. When Bitcoin reached its peak price point in December 2017, almost all altcoin prices also went up quite significantly. When Bitcoin fell in 2018, almost all altcoins also fell.

The correlation between BTC and BCH price is even stronger compared to the correlation between BTC and other altcoins. There’s no hard evidence to explain why, but most veteran crypto traders already know about the correlation between BTC and BCH price.

Whenever BTC rises up significantly, sometimes altcoins might lag a little bit behind. However, BCH often goes up significantly without a problem following BTC. The price correlation between the two (historically) is really strong though, of course, it is not always the case.

So, if you decide to invest in BCH, you need to pay close attention to BTC price action. As we have mentioned several times, the BTC price will be one of the deciding factors of BCH's future.

Conclusion

Bitcoin Cash has all the right recipes to be successful. It has a much larger block transaction limit size than the original Bitcoin, and it is able to process many more transactions per second as well. Many people say Bitcoin Cash has served the original Bitcoin purpose as a decentralized peer-to-peer electronic cash. 

That being said, its future remains complicated. Bitcoin Cash’s main selling point is to be “seen” as the real Bitcoin. And outside the Bitcoin Cash supporting camp, many people see Bitcoin Cash only as one of the Bitcoin “alternatives.” 

Whether Bitcoin Cash can eventually surpass the original Bitcoin or not in terms of popularity and market cap, it remains to be seen. Investing in BCH in the long-term is still a good option, though, because typically, BCH price follows BTC price.


CryptoBoomer
CryptoBoomer

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