There's more to Bitcoin Cash than meets the eyes.
From its very definition, Bitcoin is meant to be a secured peer-to-peer decentralized payment system which should be divisible, easily available and cheap. This is the goal of Satoshi Nakamoto, the creator of Bitcoin, as detailed in the cryptocurrency's white paper.
In 2009 when it was created it had all these characteristics but with time some of these features faded away. As more Bitcoins are mined and more people embraced it (and its price rose), transactions on the network became less cheap and got slower signaling a need to upgrade it so it could overcome these difficulties.
The Bitcoin Cash Hard Fork
There was a huge divide in the Bitcoin community over how to make it scale so the network would accommodate more people and more transactions in less time at less cost.
One side (majorly developers) wanted to upgrade the underlying software so that applications to make it scale can be built on the network while the other side (majorly miners) wanted the blockchain size to be increased from 1MB to 8MB so as to accommodate more transactions. No agreement was made, so the other side (miners) forked the network and created Bitcoin Cash in August 2017.
Bitcoin Cash Red Flags
However, there are some things about the new currency which raise red flags.
For one, the masterminds of the new coin are now touting it to be the real Bitcoin. "Bitcoin Cash is the continuation of the Bitcoin project as peer-to-peer digital cash.
The owner of bitcoin.com, the website new crypto investors most likely would visit to get a first-hand knowledge of Bitcoin, is a staunch Bitcoin Cash supporter, and he's using the website to push his agenda. The goal, it seems, is to entice newbies to embrace Bitcoin Cash and put their money in it and lose it down the line.
Bitcoin Cash proponents argue that it is the real Bitcoin because it is cheaper and it takes less time for transactions on its network to be completed. This opinion, however, this won't last long if more and more people adopt it.
Won't its 8MB blocks on the network become full and then we'll be back to square one?
Recent reportssay a technology has been birthed which will allow individual Bitcoin Cash blocks to be increased to 1TB so that there'll be "unlimited space" for transactions. But won't this make the nodes heavy such that only a handful of people will be able to afford the storage space, eventually making it a less decentralized coin?
And this is amidst accusations that Bitcoin Cash is centralized as a few group of people own a large chunk of its mining network. The few should not decide for the many.
Bitcoin Cash's code on Github it is private and talk is there is only one main developer working on it.
This little group can control the network and manipulate it to their own advantage whenever they want, invalidating one of the core features of Bitcoin, as outlined by Satoshi Nakamoto. This is a bad thing for the coin.
Furthermore, Bitcoin Cash's major selling point of larger blocks will be a fallacy when the lightning network arrives on Bitcoin. It will address its scalability problems, providing faster transactions and low to no transaction fees.
When this happens, Bitcoin Cash will crash.
The thing is, the lightning network is already being tested by developers. It's believed that it will come online in the near future.
When that happens, the value of Bitcoin Cash will go to zero. Which begs the question:
Is Bitcoin Cash a Pump and Dump scheme?
The events surrounding this coin suggest this possibility.
Firstly, it was mined continuously by some set of people at a loss. It's almost as if they were instructed by some boss man to continue mining it so as to sustain the network.
When the coin went live on the Coinbase, the major cryptocurrency market in America, the price quadrupled to about $2,400 in hours. The whole operation was immediately shut down over allegations of insider trading and that some elements are pumping Bitcoin Cash.
An investigation was carried out and then trading resumed. However, the price kept rising, hit record highs and now depreciates whenever the cryptomarket loses value.
Also, Bitcoin Cash proponents are doing all in their power to add more liquidity to its market. Bitmain, the largest manufacturer of ASIC miners on the globe, holds a large chunk of Bitcoin Cash's network’s hashing power have announced they would only accept payment for their miners via Bcash.
A lot of Chinese exchanges have Bitcoin Cash as the base currency for trading against other altcoins in a bid to make it the new standard over Bitcoin, which has been the de facto base in all exchanges.
People seeing these, and the rise in the price of the coin might not want to miss out (FOMO) and decide to buy the coin. When the price reaches a certain level, the whales cash out, making ridiculous profits after spending lots of resources on an elaborate plan which was hatched in 2017, and leave others broken hearted.
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