When Bitcoin Cash (BCH) was announced, a large part of the crypto community bashed it, saying it would never have any real value or use. Over time, however, it has proven that it is a real contender to Bitcoin. Despite being only a few months old, it has held one of the top 3 spots for a large part of that time.
Upon Bitcoin Cash’s release, its value tanked hard. It started out at 1 BTC and dropped down to as low as 0.01-0.05 on some exchanges. As of this writing, it is back up to the 0.15+ BTC range and is holding fairly steady. The dumping was undoubtedly due to fear of it not going anywhere in the beginning, and it’s entirely possible that we will see more dumping when Coinbase officially releases the BCH for their users who are eligible. That said, to be in the top 3 cryptocurrencies in market cap for an extended period shows that there’s definitely a market for it right now.
Why Does it Exist?
Bitcoin Cash was born out of the dispute regarding how to scale Bitcoin. While Bitcoin decided to go the SegWit route and potentially boost the block size to 2MB, BCH wanted to avoid SegWit altogether and just go with more space, increasing the block size to 8MB. The idea behind this is that SegWit leads to the Lightning Network and other potentially catastrophic things (which are mostly untested in a large-scale environment), and there’s fear that something may happen as a result. Litecoin has worked hard to squash those fears (both are already live on its blockchain and protocol), but it still exists with many people nonetheless.
As for when it spiked in popularity, that happened when the SegWit2x fork was essentially cancelled. A lot of Bitcoin supporters were expecting this to go through, and when it didn’t, Bitcoin Cash became the go-to alternative. With that said, should SegWit2 ever take off, it’s entirely possible that we see people move back to the main chain. Some miners have claimed they will attempt to get it going, though this is something time will tell.
Benefits of BCH
BCH brings multiple benefits, including:
- Ease of integration (it’s done the same way as Bitcoin is)
- Lower fees (think cents, rather than dollars)
- Faster transactions (blocks aren’t full, so you can usually get into the first one mined)
- A very strong community, including the /r/btc subreddit
- A strong market: staying in the top 3 isn’t easy
All of these have made the coin go from untrusted to at least curious. While there are people who have jumped from BTC to BCH entirely, being more diverse is probably a better idea – especially since Bitcoin is still proving to be the alpha dog.
Is it Still Risky?
As with all cryptocurrencies, the answer is absolutely. Whether you’re talking about BCH, BTC, or ETH, they all come with market and governmental risks. As such, it’s important not to overextend if getting into this, because while the rewards may be great, the risks are as well. Another fork could come out that effectively neutralizes BCH, BTC could find a way to completely take over it, or a multitude of other situations could occur. The big thing to keep in mind is that although it is in the #3 spot, it’s still not close to Bitcoin (market cap of $26B vs. $168B as of this writing). With that said, it’s definitely on the right path, and it’s proof that it’s possible to successfully hard fork a coin and gain a large market share.