What is Bitcoin Cash (BCH) and is it a good investment?
People from all over the world have heard of or used Bitcoin. It is a beacon for digital currencies and its spectacular rise in early 2021 has made it shine brighter than ever. Of course, when there is a digital currency like Bitcoin Cash (BCH), we can’t help but wonder if it is related to Bitcoin or another digital currency. Actually, the answer to both of these questions is yes. Let’s see what is Bitcoin Cash (BCH) and is it a good investment?
What is Bitcoin Cash (BCH)?
Bitcoin Cash (BCH) was launched in August 2017 as a result of a hard fork of the Bitcoin (BTC) blockchain. In fact, a hard fork is a blockchain divided into two parts, each of which becomes its own digital currency with its own unique blockchain.
Unlike a soft fork, which is an update to the blockchain where only one of the split pieces of the blockchain remains valid. This way, when the fork occurs, anyone holding BTC will receive the same amount of BCH.
The formation of BCH occurred as a result of disagreements within the BTC community. BTC groups and developers were concerned about its scalability and were unsure of the BTC blockchain’s plans to adopt the Separate Witness (SegWit) technology.
These groups felt that although necessary (with the increase in the size of the BTC network, the blockchain could hardly keep up with the increasing volume of transactions), this proposed upgrade did not fit into Satoshi Nakamoto’s decentralized philosophy. As a result, they agreed that the only way to overcome the scalability problem was to increase the maximum block size.
Therefore, a hard fork was proposed in which the BTC blockchain would be divided into two parts. One of them will process more transactions at a faster rate than BTC. This is how BCH was born.
Roger Ver, one of the early Bitcoin investors known as “Bitcoin Jesus,” invested $25,000 in Bitcoin when it was worth $1 in 2011. Roger Ver became the co-founder of BCH and is actively involved in the development of the digital currency to this day.
In an interview with Forbes in 2019, he said he was working on “partnering with big companies to get BitcoinCash in real trade for real people and real companies.” Interestingly, he added, “the cryptocurrency will eventually surpass the market cap of BTC.”
Difference between Bitcoin (BTC) and Bitcoin Cash (BCH):
What are the main differences between BTC and BCH hard forks?
Scalability:
BCH was created due to some concerns within the BTC community regarding the scalability of Bitcoin. Even today, the BTC network can only process 7 transactions per second (TPS), while the BCH network can process significantly more. This fact was identified as one of the main points during the launch. At that time, BTC block size was limited to 1MB, only at the beginning, BCH block size was 8MB. Since then it has grown to 32MB.
Mining difficulty:
Larger BCH block sizes mean that it takes more processing power to mine, which in turn means a higher cost. On the other hand, this means more opportunities for miners to receive transaction fees. However, perhaps the most significant difference between the two blockchains is the huge price gap.
At the time of writing ( 2023), BTC is worth around $31,321.30 and BCH is around $233.05. Therefore, in order to attract miners to the network, the BCH network complexity must be lower than that of BTC. But how does the blockchain work? Everything works with emergency difficulty adjustment (EDA). This algorithm, which is built into the BCH blockchain, takes effect automatically when there is a sudden change in the number of miners.
Use and acceptance:
Another reason for the division within the BTC community is that it has been treated more as a store of value than a real currency. In fact, it is quite understandable even today. Many media outlets still insist that Bitcoin is “digital gold” with limited supply. If you hope its price will go up in the future, why use it to buy something else? Due to its lower fees and short processing times, Bitcoin Cash (BCH) is expected to overtake Bitcoin as a real currency — in theory, anyway. But is everything working as planned?
Is Bitcoin Cash (BCH) a successful project?
As we said before, BCH was promoted as Bitcoin Plus at the time of its launch. “Bitcoin…but better!” Was she able to achieve the resounding success that her creators had hoped for? Well not quite. Its developers had to deal with many issues that ultimately affected its price and the success of the digital currency throughout its short life.
Hard Fork Bitcoin Cash BCH:
Believe it or not, BCH had a hard fork too! Actually, not just once. The first of these was launched in November 2018, when the blockchain was forked and a new digital currency, Bitcoin SV, was formed. The letter “SV” stands for “Satoshi Vision”. Satoshi Nakamoto is the creator of Bitcoin.
Similar to the original BTC fork, the BCH fork arose from a dispute between developers over the direction of the blockchain, which has been described as a “civil war” between different parts of the BCH community. Basically, it all comes down to block size. On the other hand, Roger Ver and his company wanted to keep the block size at 8MB. On the other hand, there was Craig Steven Wright and his company who wanted to increase the block size to 128MB.
More chain splits occurred every six months, which led to network upgrades. However, even BCH fan Roger Ver expressed his unhappiness with it, stating that the planned “controversial cleavage” was a “major problem” and that he “wishes it would end”. Ordinary hard forks are not generally seen as a positive thing for cryptocurrencies as they destabilize the system. In fact, that’s what happened with the BCH. This was reflected in its price, and we will talk about this later in the article.
Bitcoin Cash (BCH) as a payment method:
Since BCH was founded with the goal of providing consistent and efficient payments, there has been some success in this area in recent years. As a sure sign of its growing status, especially in October 2020, BTH was listed by PayPal as a digital currency (along with BTC, Ethereum, and Litecoin). Now customers will be able to buy and sell goods using their account. In February 2020, it was estimated that more than 4,300 stores worldwide were now accepting BCH (so this number is likely higher now).
Bitcoin Cash (BCH) Price History:
Bitcoin Cash BCH was launched in August 2017, with a cost of $240. This was the time that coincided with the famous Albaran. Hence, its price increased rapidly and peaked on December 20, 2017 at $4,355. At the beginning of 2018, like many other cryptocurrencies, there was a correction. By February, it had fallen below $800. However, by May, it had risen above the $1,600 mark. As the struggle in the BCH community gained momentum (culminating in the Bitcoin SV hard fork), its price fell. This led to an all-time low of $75 in December 2018.
Since then, its price has remained relatively stable. Between January 2019 and January 2021, it did not fall below $100 nor did it rise above $500, even the halving did not affect its price much. However, it did see a price rally in January 2022, supported by an increase in Bitcoin prices. On January 10, its price briefly rose above the $600 mark, its highest price in two years. Can this bullish mood be maintained?
Is BCH a good investment?
By asking this question, you want to know if it is really possible to make a great return on the money you invest. So what do some crypto analysts think will happen to the Bitcoin Cash price in the coming years?
Bitcoin Cash BCH Price Prediction:
1. Prime XBT expects BCH to be worth approximately $1,100 by 2025.
2.Cryptocurrency prices are more optimistic, forecasting BCH to cross $2,500 by 2025.
3.Portfolio investor I’m not sure about the possibilities of cryptocurrency. They indicate that the price of Bitcoin Cash will remain relatively stable at around $540 in 2025.
4. Long forecasts are even less optimistic. They predict that the price of Bitcoin Cash will drop by 2025 and will be around the $350 mark.
As you can see, the outlook for BCH prices seems to be somewhat mixed, but what do we think?
The success of cryptocurrencies relies heavily on BTC, and BCH is no exception. In fact, it was known as an altcoin with one of the strongest price correlations with BTC. So, historically speaking, if BTC turns bearish, BCH will probably do the same. Although BCH was ostensibly an upgrade of BTC, it will likely always remain in its shadow. The thing is, it’s not BTC and every digital currency is likely to be in its shadow just because of this simple fact. In fact, BTC is very popular because it is the first and most popular cryptocurrency.