Power of Bitcoin Cash
Bitcoin Cash (BCH), the third largest cryptocurrency by the market cap, was presented as a fork of Bitcoin (BTC) on August 1st of this year. Its main advantage over BTC is the larger block sizes where BCH blocks on average are 8 MB in size while BTC blocks are limited to 1 MB. This difference in block sizes enable BCH to transact with much lower fees than BTC.
Although this has been the case for the last several months, overall crypto community largely looked down on BCH. As a result, BCH price gradually lost its value, going as low as $270 on several exchanges. However, lately BTC network was unable to handle the pending transactions as it used to do due to significant percentage of BTC miners switching off mining BTC to BCH. This caused transactions in BTC network to get delayed, which in turn resulted in an increase of average BTC transfer fee over $10. All of a sudden, BTC ended up being useless and BCH became the focus of attention due to its low transfer fees (less than $0.50).
People argued that BCH would be the original Bitcoin as it offers low fee and fast transfers. Following, massive BCH price appreciation took place bringing the price of BCH above $3000, mainly because of people rushing to buy BCH thinking that it may become the Bitcoin. While BCH price was soaring, as expected, BTC tanked losing roughly % 30 in value from its all time high. The sudden increase of BCH price made it to be more profitable to mine than BTC, which caused more miners to switch to BCH. While all these were happening, many thought that BCH may go parity with BTC in terms of price, meaning that 1 BCH = 1 BTC. However, it was Bitcoin Cash difficulty adjustment which ended this epic fight. The difficulty of BCH was adjusted higher, as a result, miners switched back to BTC which also cleared the BTC network from pending transactions. BCH started fading away slowly whereas BTC gained its power and trust again. BTC fans blamed Bitcoin Cash team for a pump and dump activity and called it a useless coin.
Well, is that the case? Is BCH a useless coin? Definitely not. Why? Let me explain.
Almost half of BTC hash rate comes from Chinese mining pools which mostly support Bitcoin Cash. BCH will always be a threat to BTC unless hash rate distribution changes favoring BTC supporters which seems very unlikely in the near future. Currently, miners have the power to jam the BTC network at any time. This is a big risk for BTC as it would lose its respect and trust over time if miners keep switching back and forth. Another risk for BTC is that as it reaches masses and goes mainstream, more users would join the network and 1 MB block size of BTC will not be able to offer low cost transfers. On the other hand, BCH due to its large block size will continue to offer better performance than BTC. The fact that BCH price soared and plummeted in a short amount of time does not make it a useless coin or scam.
Besides all of these, lately, there has been a negative correlation between BTC and BCH price. Whenever BTC price increases, BCH decreases, and vice versa. Utilizing this correlation using technical analysis would be quite profitable. Moreover, whales known as big players with power to move the market in one direction, could possible take advantage of this situation. This is why I personally believe BCH will not die, stay around for a long time and will surprise crypto community at different times.