Introduction
Let’s admit some facts before we get going. Without Bitcoin, we wouldn’t have come across Blockchain Technology nor the benefits of decentralization and peer-to-peer network. In that sense, Bitcoin, back in 2008, was a revolution of a solution. That historical significance will remain. Forever.
But what appeared to be a promising technology and solution failed to impress when studied for real-life application. Why? Because the transactions that the Bitcoin network could process in a second stood at seven. What is the significance of that number?
Well, Bitcoin was touted as that promising all-encompassing medium of value exchange that did not require a third party like a bank to enable the transaction. If so, it was there to replace the century-old banking systems of the world. But that was far from reality. Why? Because Visa, the real-world financial transaction enabling corporation (and system), processes 56,000 transactions per second. It is even touted to be able to process about 65,000 transactions each second. That’s what makes it a reliable financial system allowing people to complete payments in the least possible time with the least possible charges (though debatable 😊).
So, if Bitcoin were to replace Visa, then it would require a little more than five days to complete the number of transactions that Visa does in a second. In other words, in a queue of five people paying for a Latte, you may have to stand for hours before you even get to pay. Rest assured, you would have left even before your turn came.
In short, Bitcoin to be implemented as the base system for transactions would require the human world to transform into a sloth world. Maybe, then it would make sense.
Then What’s The Solution? | Bitcoin Cash
The speed and other lack of practicalities were some of the reasons for Bitcoin Cash to hard fork out of Bitcoin back in 2017. BCH had increased the size of each block to 8 MB to accelerate the verification process. In other words, the size improved the speed of transactions. That did the trick.
Though it was still some way from Visa, it surely reached a mid-way between Bitcoin and Visa. And in 2018, the block size was further increased to 4 x 32 MB to cater to future speed requirements. Bitcoin cash came up as a solution to answer the scalability dilemma of the crypto world. Even today, Bitcoin Cash (BCH) presents itself as a viable solution to the crypto-world transcending to the real world. Paypal, Banks, and other financial institutions showing their interests in hosting BCH as a payment option is a clear indicator of what can be.
On the other hand, Bitcoin has settled down as a store of value rather than a medium of transactions, at least for the time being. Therefore, since 2017, the crypto world has witnessed two cryptocurrencies – Bitcoin and Bitcoin Cash – taking the form of two known assets from the real world. Bitcoin becoming an equivalent of Gold while Bitcoin Cash becomes (or transcending) FIAT currency (USD, INR, GBP, etc.).
Could cryptocurrencies become a viable option in the twenty-first century? Well, it is already in the process of becoming. Very good chance that it will become.
Bitcoin Cash | Faster Transactions
Bitcoin Cash can handle about 100 transactions per second and is only growing faster. It is more than fourteen times faster than Bitcoin and has the potential to go even faster. Now, you may argue that it is still slower than Visa by a hefty margin. True, but there is some hope in the details. You see, while Visa can process transactions to the extent of 56,000 – 65,000 transactions per second, the real-world need is just about 1500-1700 transactions per second, barring the peak requirement.
This means BCH can do what Visa does with a 17 seconds delay. What I mean is, BCH would require 17 seconds to complete 1700 transactions. The math is simple. Now, you are upset that I did not give Bitcoin the same analysis. Well, let’s do it. Now, if I were on a network accepting Bitcoin, then I would be able to do 1700 transactions in ~243 seconds. That’s about four minutes. To understand the difference between 17 seconds and 243 seconds, let me ask you a question.
If you are on the net and are accustomed to using 4G or even 5G (not yet in most countries), then you are used to awesome internet speed. There is no delay in loading a page. You hit enter, and the page loads in milli or nanoseconds. You travel to another country and realize that they only have 3G or, in some places, only 2G. So, the problem is, wherever there is 3G, your page takes 17 seconds to load, and wherever there is 2G, your page takes 4 minutes to load. The question is, which is bearable? The 17-second delay or the 4-minute delay? I am sure most would have chosen the 17-second delay.
And if you understood the previous example, you would appreciate the difference between the use of Bitcoin Cash and Bitcoin daily. You get that the 17-second delay is still closer to real-world functioning than the four-minute delay. That’s all that you need to realize. Also, remember, Bitcoin Cash has the potential to become faster.
So, the real world is not really out of reach for Bitcoin Cash.
Bitcoin Cash | Future Currency
There are many more cases in favor of Bitcoin Cash becoming a mode of payment and exchange of value. We will see them in subsequent discussions, but we need to remember that BCH offers one of the closest opportunities for the crypto-world to transcend into the real world.
We may be looking at a crypto-future as our real future!!
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Image Courtesy: Michael Wuensch at Pixabay
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