Yesterday, the feared Bitcoin Hard Fork happened. Bitcoin Cash saw the light, several blocks were mined and it started officially as a new currency (we could call it “alt-coin” until new updates).
Now, what can we expect?
Let’s start saying that Bitcoin Cash (aka BCC) has several differences with “original” Bitcoin (aka BTC), first of all, the block size (now 2 MB, planned to be increased to 8 MB). Like many of you know, mining Bitcoin is so hard, it requires a giant amount of HP (hashing power), in other words, you need a giant investment in mining equipment, power, and maintenance work. Actually, the biggest mining farms are from China (low energy cost, low maintenance costs), and a part of these miners started their own version of Bitcoin. When the main chain split into two different chains, both had the same difficulty. This means that it needs MORE hp to run the network efficiently. The network difficulty has an auto-adjust function that runs if in a determined time no blocks are mined. If no blocks were mined in the first times of Bitcoin Cash, the HP power needed would be decreased. That was not the case. During the first hours of Bitcoin Cash’ life, several blocks were mined, so, no HP decrease for it.
The actual situation can go on for a long: the HP that actually mine Bitcoin Cash, until yesterday was used to mine the original Bitcoin. This means that at the moment we risk a very poor service offered by BTC (due the amount of HP passed to BCC), on the other side we see a coin (BCC) that actually is completely unuseful: is quite impossible to move BCC (due the lack of services and the poor HP). If you have some BTC deposited on an exchange that supports BCC (es: Kraken), you probably have some BCC accredited to your account, but you can ONLY sell them into the exchange.
Like you can see in the chart below, the Bitcoin, daily unique transactions start falling since this civil war started (yesterday less than 150k transactions).
This is a bad think for Bitcoin. since other main cryptocurrencies (like Ethereum or Litecoin) keep their bullish trend (not talking about price, but DAILY TRANSACTIONS, aka how much a coin is used daily).
Here you can see the Ethereum daily transactions compared to Bitcoin:
What are the possible future scenarios?
- BCC and BTC start to live together: both have a decent amount of miners and users and everybody is happy. THIS IS PURE UTOPIA. What we are seeing in these days is more than a battle to defend own ideas. Is pure politics. Two version of Bitcoin can live together, but only for a short time – the economics interests are too big to let someone stole your gain.
- BCC surpass BTC: the blockchain of original BTC get stuck again, the increased block size of BCC is its most powerful point. The code of the new BCC client (easier to learn and modify) start to be the most used from companies and services, every BTC based service start accepting BCC. Every day more miners switch their mining equipment from BTC to BCC. The BTC’ chain starts generating new blocks every day slower. This is the end of BTC (cough-ETC-cough) and the rise of BCC.
- BTC remain the main blockchain, BCC remains what it actually is: a politics position again Core. BCC slowly died.
Nobody, except miners, can say what will be, the few points we can say about is:
- The actual price is 100% nonsense: there will be a terrible volatility on BTC and BCC during next weeks. We personally sold every BTC in our wallet and will stay away until the situation comes back to “normality”.
- The option 1 explained before is PURE UTOPIA. We are quite sure that, in the long run, only one Bitcoin will survive.
Hope the best, may the blockchain be with you.