Is it the beginning of the end for Bitcoin Cash?
Is the biggest Bitcoin fork in crisis?
It surely looks that way.
I am of course referring to the fact that in the past two days, we are seeing some very telling signs of what may be the start of a falldown of Bcash – you know, the fork that for the longest time has claimed to be the true Bitcoin (at least according to those who originated it and tried to sway public opinion and fool many a newbie into believing their corrupted narrative).
The red alarm in this instance is the lack of miners on the Bcash blockchain which led to a staggering number of unconfirmed transactions and no blocks being mined for hours.
The first instance I noticed was on January 30, in the early hours, when BCH’s hashrate went from 5.3 EH/s down to the current 2.8 EH/s. With this, the drop in mining blocks hit an all-time-high and not a single block was mined for a full 5 hours. The gap between blocks 620025 and 620026 is clearly visible on the block explorers and I took this screenshot from Blockchain.com
Even if we accept this as a one-off incident, we can see a big gap in the blocks mined in the past few days. Here are some more examples (supported by my screenshots taken from Bitcoin.com this time).
Blocks 620024 and 620025 have a 30-minute gap
Blocks 620174 and 620175 have a 1.45 hour gap
Blocks 620177 and 620178 have over an hour gap (1.12 hrs to be precise)
Blocks 620324 and 620325 have almost 2 hours gap
Blocks 620327 and 620328 have over an hour and a half gap (1.40 hrs in fact)
Despite claiming to have the faster and cheaper Bitcoin version, the Bcash fork is clearly experiencing some sort of a crisis right now, this being the biggest number of unconfirmed transactions since September 2019. And September’s mega-congestion took place because of the stress test on the network.
Why am I pointing this out?
Well, ever since the Bitcoin Cash fork occurred, it has been aggressively marketed as the true Bitcoin, the real peer-to-peer electronic cash that can process transactions faster and cheaper than BTC and that it should be used for day-to-day transacting, while somehow BTC is the old, crippled and un-usable version, so people should abandon it. At least that’s what Roger Ver and his fan club were trying to convince you.
Well, right now we are seeing a different picture. While Bitcoin (BTC) does have network congestion more often than BCH, the difference in network operations is 10-fold.
In comparison, the Bitcoin network processes on average half a million operations a day, while the Bcash network processes less than fifty thousand. (source – Block’tivity)
What is worrying in this instance with the multiple mining gaps in the Bitcoin Cash network, is that with Proof-of-Work type of mining, the lack of miners and mining activity is a major problem. If Bitcoin Cash fails to attract miners to confirm transactions at the speed their network needs, that will result in loss of trust, loss of interest in the future usability of their coin and subsequently, a fall in value of their coin – something that no investor wants to hear.
This is why I am seeing some red flags in these past few days and although it is too early to call its demise, it could be early signs of it.
In the mean time, the BSV fork – the biggest competitor of Bitcoin Cash and a fork that actually originated from its own camp back in 2018, has been very successful in the past month and its network operations are growing, as well as its hashrate, which is another major threat to the BCH project. Although I am not in favor of BSV and their scammy tactics, it could come on top sooner and take the place of BCH as the most successful and powerful Bitcoin fork and it pains me to say that, but all eyes are currently on it. It’s even surpassed Bitcoin in the count of network operations (as of today – 1 Feb 2020).
Time will tell how the race between the Bitcoin forks play out, but all odds are currently in favor of BSV – that doesn’t mean it will replace BTC as the dominant coin, I am not saying that at all. But it could well beat the BCH in the altcoin race, this is what my point is. As a trader I try not to have sentiments or personal preference, although it is hard not to hold grudges with scammers like Craig Wright (the founder of BSV fork), but if we don’t count his obnoxious character, the fundamentals of BSV are positive and on the rise, so it’s good news for the BSV holders in 2020 and not-so-good news for those in support of BCH for the time being. Count your eggs and make sure you spread them in several baskets, as always: diversification is key.