Bitcoin is regaining its currency status as transaction fees on the network are now on par with Bitcoin Cash's, dealing a powerful blow to the later's most touted advantage over Bitcoin.
In 2017, Bitcoin's transaction fees spiked, hitting a peak of $34 as more people embraced and started using the technology. Sending small amounts of money on the network was impossible as the fees charged for the transactions were insane. Some members of the community then forked the chain to create Bitcoin Cash, arguing that Bitcoin is no more useful as a currency due to its high transaction fees.
Fast-forward to 7 months later and that claim is getting obsolete.
This is because Bitcoin transactions fees have fallen to an 18-month low.
On Wednesday, bitcoin transactions on the average were charged 51 cents, which in that moment was lower than Bitcoin Cash's, despite the Bitcoin network processing more transactions.
In terms of Satoshis, the coin's smallest possible unit, BCH's higher value means a transaction fee of 10,000 Sat provides worse value than an equivalent 10,000 Sat fee sent in BTC.
This development deals a major blow to Bitcoin Cash because it threatens its reason for existence. It also trumps a major argument by Bitcoin Cash proponents that Bitcoin Cash has a larger network capacity, is faster and charges less, hence is the better coin.
With BItcoin fees dropping low, there'll be less need to use Bitcoin Cash.
Why did Bitcoin fees drop?
The reason for the 97% drop in Bitcoin fees can be attributed to a number of reasons but chief among them is a recent reduction in Bitcoin transactions and the adoption of SegWit by Coinbase and Bitfinex. SegWit makes Bitcoin transactions cheaper. According to reports, these two major Bitcoin platforms have implemented SegWit in preparation for the Lightning Network which will further make transactions faster.
It's anyone's guess if things will remain this way but this development points to a glaring fact- Bitcoin can scale without having to increase the block size.