At BQT, we our curated list of asset pairs is and will perpetually remain a work in progress. That said, we’ve already listed BNB, Binance’s internal token on bqtx.com. If it were a true cryptocurrency, it would be the seventh-largest by market cap. That suggest we need to examine the top six: EOS, LTC, XRP, ETH, BTC and today’s installment, BCH.
As of this writing, the market cap for bitcoin cash, or BCH, is $7.5 billion, according to CoinMarketCap. That’s around 3% of all crypto assets’ combined. Over the course of the 24 hours preceding this writing, around 23% of its supply traded. That compares favorably with the 15% of its more famous sibling, bitcoin classic, or BTC.
BCH hit its all-time high of $4,355 on December 20, 2017, then its all-time low of $75 almost exactly a year later. Sure, every cryptocurrency has its stories to tell about the bubble and the crypto winter, but that’s extreme. Of the major digital assets, though, only BCH can claim a 98% year-over-year price drop and still be around six months later to tell the tale. As of this writing, BCH seems to have found support somewhere around $400, slowly rising against the dollar and staying more or less in lockstep with BTC.
The history of BCH is the same as that of BTC until July 2017 — and let’s not be so naïve as to suggest that the simultaneity of the bitcoin hard fork and the speculative crypto bubble was just happenstance. An ICO white paper was almost literally a license to mint money, and bitcoin was getting too big for everyone to be happy with their share.
But let’s put our cynicism aside for now and take a look at the official, i. e. Wikipedia’s, version of events, which highlights the technological reasons for the split.
“Rising fees on the bitcoin network contributed to a push by some in the community to create a hard fork to increase the blocksize,” It Is Written. “This push came to a head in July 2017 when some members of the Bitcoin community including Roger Ver felt that adopting BIP 91 without increasing the block-size limit favored people who wanted to treat Bitcoin as a digital investment rather than as a transactional currency. ... Eventually, a group of bitcoin activists, investors, entrepreneurs, developers and largely China based miners were unhappy with bitcoin’s proposed SegWit [Segregated Witness storage protocol] improvement plans meant to increase capacity and pushed forward alternative plans for a split which created Bitcoin Cash. The proposed split included a plan to increase the number of transactions its ledger can process by increasing the block size limit to eight megabytes.”
So who is this Roger Ver guy?
He’s a self-identified peace activist who once spend 10 months in prison for selling explosives on eBay. Oh well, the Nobel Peace Prize was named after the arms dealer who invented dynamite, so maybe that’s just the world we live in and dishing that kind of snark is unwarranted. It’s still fun, though.
That 2002 conviction aside, he was one of the first ecommerce guys to accept payment in bitcoin, and acquired quite a bit of the stuff starting in 2011. From that point, he was all in, cofounding the Bitcoin Foundation in 2012 and taking over Bitcoin.com in 2014. He also owns a significant chunk of Ripple and has an array of business and philanthropic interests that promote libertarianism, anarcho-capitalism, anti-war movements and, of course, promoting cryptocurrency. He oversees this empire from ... anybody’s guess. The California native moved to Japan after he got out of prison and renounced his U. S. citizenship in 2014. He now carries a passport from St. Kitts and Nevis, but that just means he had $150,000 to spend on “citizenship by investment”.
So he became an advocate for a larger block size on the bitcoin chain and, in a way, the midwife to BCH.
“On 1 August 2017,” the Wikipedicians recall, “Bitcoin Cash began trading at about $240, while Bitcoin traded at about $2,700.”
They refer to what was known at the time as Bitcoin Cash Adjustable Blocksize Cap, or BCH ABC. That was the currency championed by Ver and mining magnate Jihan Wu. The problem with revolutionaries, though, is that they’re more united in what they’re fighting against than what they’re fighting for. There was another faction, led by Craig Wright, who is on the short list of people who might actually be the individual behind the Satoshi Nakamoto pseudonym. (Wright has the distinction of being the only likely candidate who wants people to think that he is.) They called their version of what cryptocurrency ought to be Bitcoin Cash Satoshi’s Vision. BSV forked off BCH after a few months and is still a major player. Considering it’s the eighth-largest cryptocurrency in terms of market cap and this series of blog posts is only six articles long, you can be assured that we at BQT have not written off BSV as a potential trading asset.
There are, then, three different bitcoin’s claiming the mantle of being the “real” or “original” one. Considering one of the things they’re feuding over is which one is the most decentralized, it’s kind of silly.
Investors thought so, and that’s one of the main reasons why BCH got punished so badly in 2018, even in comparison with the rest of the true cryptocurrencies.
“BCH did not build value out of support or recognition for its use as a currency or the benefits of the fork. Instead to the coin was built on stilts of greed and the tiring pattern of forks leading to price pumps and subsequent falls,” according to Ethereum World News’s Michael Lavere, who puts it much better than I ever could. “The severe backlash in valuation, for the entire industry, is revealing both investor fatigue and general disgust with how price valuation in the space has been handled—a feature that no longer seems to correlate with any legitimacy and is instead entirely drive by speculative market forces.”
BCH’s main use case is pretty much what the Satoshi Nakamoto white paper called for over a decade ago: transferring money around the world without friction, charging only the most nominal fees. CryptoNewsZ notes that BCH serves as an alternative to crypto payment processor BitPay.
As a permissionless, open-source network, nobody really owns it. With a known fixed supply — 21 million BCH total at build out, almost 18 million of which are already circulating — there’s little chance of inflation from over-issuance. Of course, that’s only one of a number of ways a currency can be devalued. Ask anyone who bought BCH in late 2017.
Some of the other claims on BitcoinCash.org are a little sketchy.
“Many merchants offer discounts for paying in Bitcoin Cash, because it eliminates credit card fees and helps grow the adoption of this new payment system,” the site brags, but doesn’t cite a single one. The closest I can come to backing this claim is this link to Purse, an aggregator that allows you to shop Amazon with crypto and be rewarded with 5% to 10% savings. But it works with either BCH or BTC.
The site also suggests that, because of banking industry disruptions in Cyprus some years back, “bank deposits are only as safe as political leaders decide. Even under the best of conditions, banks can make mistakes, hold funds, freeze accounts, and otherwise prevent you from accessing your own money.”
While no true crypto enthusiast is going to argue with that, any sensible person also realizes that Cyprus was an extraordinary event. And yes, bail-ins and expropriations and other government or central-bank fiddling is bound to happen, there are more places in the world than not where it’s unlikely to happen this year or next.
Sovereignty, privacy, anonymity — these are all the benefits of BCH. But then again, they’re also the benefits of any other cryptocurrency you’re likely to trade in.
The argument between the BTC and BCH proponents comes down to:
“You’re a fraud!”
“I’m not a fraud! You’re the fraud!”
You’d have to go to the South Bronx on a Saturday night to hear a more compelling debate.
Ver is adamant about always calling his horse in the race “Bitcoin Cash” or even just “Bitcoin,” but never “Bcash,” even though that’s what a lot of people who own it or report on it use. He further insists on calling BTC — which is usually what people mean by “Bitcoin,” or “Bitcoin Core” to avoid ambiguity — as “SegWit Bitcoin”.
It doesn’t help that the BCH crowd’s web address is Bitcoin.com while BTC’s proponents call Bitcoin.org home. This has caused more than a little confusion among those potential participants who are new to the crypto space.
Some highly vocal critics on Reddit and other online forums believe that the BCH supporters are deliberately taking advantage of the confusion, trying to convince newbies that they’re buying “bitcoin” at a fraction of the market price. There are those who think the entire BCH enterprise is a scam-y vanity project and call for reputable exchanges to delist it.
Also, despite BCH’s — and to be fair BTC’s — contention that it is the more decentralized cryptocurrency, Cointelegraph reports that three mining pools comprise the majority of BCH hashing, making it more susceptible to 51% attacks. That warning had been whispered for months, and it finally happened May 15, 2019. That’s when two of those three pools were able to instigate the attack by themselves.
“The interesting part of this particular attack on bitcoin cash, though, is that it was arguably executed in an attempt to do something ostensibly good for the community, not to reward the attackers or to take the funds for themselves,” according to CoinDesk’s Alyssa Hertig.
The attack was related to a hard fork of the BCH chain. Rather than create a new cryptocurrency, though, the move was designed to solve a glitch in the consensus mechanism. Still it left a lot of money in so-called “anyone-can-spend” accounts. Rather than wait for bad actors to take advantage, the BTC. top and btc.com pools reversed $1.4 million worth of transactions without authorization. This might be the only time in history when such a radical solution was used in a capital market — and the exchanges applauded.
It’s ironic that BCH, which remains by design a currency rather than part of a new asset class, is having a rough time finding merchants who will take it and consumers who want to spend it. Even so, its very existence might be salubrious to the crypto space in general.
“The development of Bitcoin Cash has led to other efforts, including from Bitcoin itself, to increase the size of Bitcoin blocks and generate faster and less expensive transaction fees,” Brian O’Connell writes in mainstream financial news outlet The Street. That’s a good sign and also a nod to Bitcoin Cash, which has forced the major cryptocurrencies to raise their game and give cryptocurrency users what they want — a Bitcoin currency that makes it easier and faster to move Bitcoin around.”
And cheaper. There’s little doubt that the competition from BCH has kept a lid on BTC transaction prices.
So despite the contentious nature of BCH’s backers, BQT sees it as one of the leading cryptocurrencies going forward. The good thing about being a trader in digital assets across the bord rather than a creator or advocate of one or another is that it’s easy to remain neutral in these flame wars. There’s enough capital in the world to invest in BCH, BTC, BSV and anything else that might fork off the Bitcoin chain, and we hope to be among those decentralized exchanges that channel it.
Just as there’s room for more than one exchange, there’s room for more than one bitcoin.
Edward is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and recently launched his own bqtx.com Social Crypto exchange helping traders connect with each other to leverage their crypto assets.
bqtx.com has been in development since March 2017 and its ICO launched September 18. The information can be found online at bqt.io, on Telegram @BQTCommunity and on Twitter as @bqt_ico.