Can Bitcoin Cash become a threat to Bitcoin?

Three years of bitter struggle in the bitcoin community were resolved on Tuesday, when a group of dissatisfied budded off to create a new coin called Bitcoin Cash. It can handle more transactions per second and duplicates the same transaction history as bitcoin up to Tuesday 8:20 am ET.

Many were eagerly awaiting this event, but the market seemed to brush it off. According to Coinmarketcap.com, the price of bitcoins, which has risen in the last few days, fell just 5% from $ 2,875 to $ 2,718.

'I think that the BCC will prove itself,' said Daniel Masters, director of Global Advisors, who heads the Global Advisors Bitcoin investment fund. 'I think that Bitcoin Cash will exist. I think it will be a cheaper coin compared to bitcoin. If in three months it will cost more than $ 50, I will be very surprised. ' The current price of BCC is 470 US dollars.

Be that as it may, for the first time in the history of bitcoin, a new coin, created on its basis, appeared, and this can lead to an erroneous perception of the original. For example, Litecoin is Bitcoin's fork. It is too early to say that this will pose a serious problem for digital gold with 21 million capitalization.

When Bitcoin Cash appeared as a result of the splitting of the block, the users of the original coin received the same number of coins in the new chain. For this reason, executive director Ryan Taylor of the Dash crypto currency expressed doubt that Bitcoin was bifurcated. Here's what he wrote by e-mail: 'Developers created a new digital currency and developed effective ways to distribute it, giving it to all the owners of bitcoins.'

However, it is unclear how many Bitcoin Cash coins are in circulation. The owners of the bitcoins who kept their coins on exchanges and the services of Coinbase, Xapo and Bitmex, who refused to support Bitcoin Cash, would not have received anything unless they removed their coins from these companies to the fork.

In most cases, users were convinced that they were able to get what was essentially free money. Blockchain analytics said that the number of bitcoins stored in the Coinbase refrigeration store has fallen by almost 50% - from 800,000 bitcoins to less than 500,000.

But this does not necessarily speak for Bitcoin Cash. Perry Woodin, CEO of Node40, wrote by e-mail: 'It will be a race who can sell faster than everyone.' A few days before the fork, users who were dissatisfied with the creation of the new coin, in the title of which was the word 'bitcoin,' said that they plan to ruin his exchange rate to reduce the price and buy more bitcoins. This can make Bitcoin Cash unclaimed.

'Everyone who supports the BTC will sell BCH to buy more BTCs,' said Vinny Lingham, CEO of Civic, who is often called the bitcoin oracle. 'There are many BCHs on the market, and people will try to get rid of it, in order to buy altokans or more bitcoins.'
A small number of users can save coins received as a result of fork. The same thing happened last summer with the etherium, which also split. Those who do not agree with this decision (Bitcoin maximalists also believe only one blockade - Bitcoin) decided to buy and push the price of the original coins up, which are now called Ethereum Classic.

If there is a result of three-year brutal fighting around bitcoin, then this is the appearance of dissatisfied players. Fork, which occurred on Tuesday, was one of three, which was threatened earlier. The first, the so-called. User-activated soft plug (UASF), in fact, was to take place on August 1. It was a way of forcing a network update called SegWit, conducted without the consent of the miners. His supporters took a principled position, making it clear that their movement was a kind of declaration of war to the bitcoin miners.

The UASF movement arose when the developers stated that they would accept SegWit if 95% of the miners support it. But when only about 30-40% of the miners did, Lingham told Core developers and their supporters: 'We do not need your hash power. We will use UASF ... and you [the miners] are just blunt channels, like telecommunications companies. Drop your bitcoins and stay out of the economy. It's as if I asked: Laura, do you have coffee or tea? In response to coffee, I say that there will be tea anyway. You can not promise anything, take it away from them and hope that everything will be all right. ' That's why, Lingham says, the miners compromised, called the New York Agreement, or SegWit2x - half coffee, half tea.

Compromise SegWit2x was rigged by the largest bitcoins players, including some of the major network managers. Now that a sufficient number of miners have supported SegWit2x, the network will host the August SegWit in August, and then increase the block from 1 MB to 2 MB in November.

So, if the supporters of Pro-SegWit and pro-2MB get their solution, who can remain non-profitable? These will be users for which blocks of 2 MB are not large enough. Other groups offered block sizes of 20 MB, 8 MB or even with varying limits. The 2 MB offer was a compromise for those who did not want large blocks. Meanwhile Bitcoin Cash has 8 MB block (but not SegWit).

And since many are interested in large blocks, Lingham is not sure that BCH will disappear at the very start. Miners are interested in making a profit from their investments and repaying electricity costs. 'People miss Bitcoin. Miners care only about money. They do not care very much about Bitcoin, 'he said, adding that a large hedge fund could spend $ 1 billion to buy up BCH and cause a price jump. Because what is called the complexity of Bitcoin Cash - the computer is difficult to find the next block in the blockroom - would be hardly comparable to the complexity of bitcoin, miners may find it more profitable to extract BCC. 'The situation requires that someone with big money said:' Do not care, I'm going to create a market, 'Lingem said.

He also suggested that this could be part of the multi-year plan of Bitcoin Cash supporters. 'Too much effort to implement what they just did, without any strategy. Do not underestimate your opponents. They could get ahead, buying up a bunch of bitcoins a year ago in the expectation of low prices, 'Vinnie says. 'Bitcoin is the Wild West, so anyone who has a lot of money can cause chaos in the market, and you can not prevent him. There are no laws on insider trading. ' Lingham continued: 'You just need someone with a lot of money, for example, the national welfare fund.'

He described the scenario of further manipulation. 'I would spend my own money on branding, buying some bitcoins from the company and transferring them to Bitcoin Cash,' he says. 'You will confuse those who will start buying Bitcoin Cash, thinking that this is a real bitcoin.'

Lingem will track the hash power or computer capacity of Bitcoin Cash. If hash capacity grows by 15-20% in relation to bitcoin, then it will mean economically justified choice in favor of the minority. If a billionaire hedge fund is interested in buying Bitcoin Cash, 'then you have a problem with moving forward when Bitcoin Cash starts to grow! Plus 100% this month - God, this is more than bitcoin! And then everyone starts to invest in this currency, and then everything changes dramatically. Herd instinct will work. The growth of Bitcoin Cash will ensure its further growth. '

The success of bitcoins is connected, in particular, with its circulation - it is accepted by thousands of merchants, including Dell, Etsy and Virgin Galactic - 'but if you look at the rest of the crypto currency, they all have ridiculously high market capitalization and prices without infrastructure all over the world' , - said Lingem.

Masters will also follow the hash capacity, although he doubts that any billionaire will try to raise prices for Bitcoin Cash. Nevertheless, due to the lower cost of Bitcoin Cash, this currency is more profitable for miners. 'The dollars that you get for the hash are much larger than during the fork,' he said.

Bitcoin offers an additional $ 1.5 billion a year as a payment to the miners, not including commission fees, so 'can [the fixed costs of the miner] compensate for the loss of $ 1.5 billion, or 90% of the revenue only to raise Effectiveness? The answer is absolutely not, can not, 'says Masters.

For this reason, he believes that some miners with obsolete equipment will be unprofitable to extract bitcoins. However, GABI will monitor what is happening with Bitcoin Cash in the next three months, before it decides what to do with BCC investors. While this does not create problems bitcoin, the firm liquidates it.

'I do not know who Bitcoin Cash customers are,' Masters says. 'Everyone who owns bitcoin now owns Bitcoin Cash. So who is buying it? I can not imagine'.
Meanwhile, in November, the next exam is still bitcoin, the Segwit2x stage, which doubles the block size in 1 MB. While many doubt whether developers and supporters of SegWit and opponents of hardcore with a 2MB block will compromise SegWit2x, Masters and Lingham believe that Bitcoin Cash increases the chances of SegWit2x, and hardcore. Bitcoin Cash did a lot for nervousness in the market, sufficient for a compromise on the part of ideological purists.

source: https://cryptocurrency.tech