Bitcoin Cash made a resurgence last week, with many people thinking it might overtake Bitcoin (BTC) in market value. Roger Ver, Jihan Wu, Craig Wright (the fake Satoshi) and others were busy promoting and pumping Bitcoin Cash (BCH) last week. Their main argument is that Bitcoin transactions are too expensive and it takes too long to confirm transactions. This assessment is accurate, but I believe it is a temporary condition and that we don’t need a new hard fork of Bitcoin in order to address the issue.
Why? Because several cryptocurrencies already exist that offer very fast transaction speeds at near zero costs. Not only have they been around for years, but they are technologically superior to Bitcoin Cash in many ways. Take a look at the graphic below for a comparison of Bitcoin, Bitcoin Cash, Litecoin and Dash.
Note that transaction speeds are approximate and subject to change. Over the past 24 hours the average block time for Bitcoin Cash was 9 minutes and 21 seconds.
Bitcoin Cash is being promoted by people that stand to benefit financially from the increase in its price. It is not being promoted because it offers superior technology than other cryptocurrencies or anything substantially different than what is alread in existence.
Those that have accumulated large amounts at low prices or held their free forked BCH want to see it overtake Bitcoin. That is not surprising. But they are attempting to hijack the Bitcoin brand and take control from the Bitcoin Core developers. While many are understandably frustrated with the pace at which Bitcoin Core developers are addressing the rising costs and slow transaction speeds, these are also the same folks that have built and maintained the network into the trusted rock that it is today.
Under the guidance of the Bitcoin Core developers, Bitcoin has proven to be secure and the value of Bitcoin has skyrocketed from around $900 at the start of the year to nearly $8,000 today. They have implemented Segwit, which paves the way for the Lightning Netowrk and other Layer 2 solutions that will address both the speed and cost issues that Bitcoin is currently facing. I hope they pick up the pace, but I can’t support a shift to a new forked coin with no other significant benefits than a larger block size. That is not enough to risk a major civil war, disruption of trust, confusion amoung new Bitcoin adopters and the potential of a significant amount of lost/stolen funds absent replay attack protections.
If I want an investment vehicle to store and grow my wealth, I choose Bitcoin (BTC). I can make occasional transactions that don’t require instant verification usually for a few dollars at most. In fact, I have used Bitcoin to buy many things over the past several months. Making payments online via Bitpay returns a confirmation usually within seconds and many stores offer discounts for purchasing with Bitcoin.
On the other hand, if I want instant transaction verification and very low costs, I use Litecoin or Dash. They both excel as a transaction layer cryptocurrency and have both been around for years. Bitcoin itself will likely have these abilities within the next 12 months. In the meantime, I see no urgent need to fork Bitcoin again into B2X or dump my Bitcoin for Bitcoin Cash. I am sure those manufacturing and running ASIC mining farms would be happy if everyone did this, but I don’t think it would benefit the larger community of cryptocurrency users or advance the cause.
Everyone will have to make their own decision. Those concerned with Bitcon’s scaling issues can opt to reduce their exposure and hedge their positions by increasing exposure to other altcoins. There are several cryptocurrencies, with quality teams behind them, offering major points of differentiation in the market, addressing real-world needs and building new features sets that will benefit end users. I do not believe Bitcoin Cash is one of them.
On November 12th, I published the article titled “Why I am Not Buying into the Bitcoin Cash Hype.” Since that time, the price of Bitcoin has advanced by 39%, while the price of Bitcoin Cash has plummeted by 53%. Bitcoin Cash may yet have another rally with relentless promotion, but my money says that it will fail to keep pace with Bitcoin, let alone overtake the price in a “cashening” type of event.
DASH Is the Elephant in the Room
With all of the attention on using cryptocurrencies for transactions, coins like Litecoin and Dash have benefited. While Bitcoin Cash dropped over 50%, the price of Dash has rocketed 35% higher and Litecoin is up 16% in the past week. I have increased my exposure to both of these cryptocurrencies and believe they remain undervalued at current levels.
Dash is digital cash that you can spend anywhere. Using their InstantSend feature, transaction confirmations take less than a second. They also allow you to protect your financial information and remain anonymous. PrivateSend ensures your activity history and balances are private. Lastly, Dash transactions are confirmed by 200 TerraHash of X11 ASIC computing power and over 4,500 servers hosted around the world, ensuring high levels of security.
Dash features a next-genearation P2P network. Miners are rewarded for securing the blockchain and masternodes are rewarded for validating, storing and serving the blockchain to users. Masternodes represent a new layer of network servers that work in highly secure clusters called quorums to provide a variety of decentralized services, like instant transactions, privacy and governance, while eliminating the threat of low-cost network attacks.
Dash was also first to implement a self-governing and self-funding business model. In Dash, everyone has a voice and the ability to propose projects directly to the network. Anything you can do – from marketing to development – that helps Dash grow and improve can be funded. This means Dash funds its own growth and adoption, consensus is guaranteed, and everyone is accountable to the network.
Dash wants digital currencies to be so easy to use your Grandma would use them. Their upcoming release, Dash Evolution, will enable users to signup and access Dash from any device and transact as easily as you can with PayPal, but in a fully decentralized way.
I don’t think Bitcoin Cash will go to zero. It may very well increase in value and carve out a niche among the various altcoins in existence. But changing the block size does not make it “the real Bitcoin” and anyone expecting it to become this will likely be disappointed.
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