One of the most controversial new innovations of money is Cryptocurrencies, a form of internet currency often called digital money or cyber currency. The most important feature of cryptocurrency is that it is not issued by a central bank, nor is it protected by regulations or law, making it impervious to government interference. The most widely known and controversial cryptocurrency is Bitcoin Cash, which was launched in August 2017. As Bitcoin Cash is getting popular and the most widely known cryptocurrency in the world, the subject matter of this paper will largely focus on Bitcoin Cash. (Cryptocurrency, 2017) What is Bitcoin Cash, why does it have value, what is its future outlook.
An introduction to Bitcoin Cash.
Bitcoin Cash is a fork of Bitcoin that has become an established and competitive cryptocurrency. It currently ranks fifth among cryptocurrencies by market cap. The main reason for its appearance was the scaling problem Bitcoin faced as a result of its increased popularity.
The fact is that the block size in the Bitcoin blockchain is limited to 1 MB. When there were not too many transactions, this limitation almost didn't affect anything. However, in 2017, the number of transactions became too high. As a result, their speed dropped, and transaction fees increased. Different approaches to solving this problem caused developers to split into two camps. As a result, on 1 August 2017, the Bitcoin network underwent a hard fork, after which Bitcoin Cash appeared. Bitcoin Cash's block size was 8 MB and further increased to 32 MB in May 2018, which significantly increased the number of transactions available per second.
“Bitcoin Cash is like a new version of Microsoft Word, which generates documents that can no longer be opened via the older versions.- Zheping Huang, a blockchain journalist.”
Why do cryptocurrencies such as Bitcoin Cash have value?
One of the biggest problems with digital currency is that bits are very easy to create and reproduce on computers. For a currency to work in an economy it must be extremely hard to reproduce. Also, to have valued a currency has to have some protection against multiple spending of the same coin – it has to move between owners when spent. Reproducing digital currency is much easier than with physical ones. A solution to this problem is having a trusted central authority that keeps records of transactions with the currency and also certifies each transaction. The largest cryptocurrency, Bitcoin Cash, took another route to stop this problem.
The transaction with Bitcoin Cash occurs strictly in peer-to-peer networks of people where no institution or central authority is certifying exchanges. A peer-to-peer network is a connection between two personal computers that can interact or transact with each other without connecting to a separate server computer. As said before, Bitcoin Cash also relies on open-source software. Open source means that the programming code has little or no copyright restrictions, has been distributed digitally to anyone in the world, and any person who so desires has the ability to edit the code. Open source is therefore similar to peer-to-peer networks as the development is done by the participants, such as programmers, and not a central figure. (Dwyer, 2014) Using this open-source method and peer-to-peer networks, Bitcoin Cash has been able to use authentication measures to solve the reproduction problem. As mentioned before, all transactions with Bitcoin Cash are recorded in a database called the blockchain. Many websites keep copies of the blockchain which they keep updated. Since Bitcoin Cash has successfully countered the reproduction problem it is able to create value. However, a currency must also have a certain amount of demand to have value. One reason for using digital currency is how low the cost of money transfer is. Transferring money digitally requires no physical money to be transferred and is also instantaneous. It is also hard to prevent people from bringing their Bitcoin Cash wallets into another country and trading cryptocurrency for local currency. Certain demand thus comes from the possibility of avoiding currency controls or government interference. The marginal benefit of such a transaction can be much higher than the marginal cost. Another reason for the demand for digital currency is anonymity. Another possible source of demand for cryptocurrency is thus people who wish to participate in online black markets, using the anonymity of Bitcoin Cash.
Using Bitcoin Cash as an investment.
Perhaps no cryptocurrency has caused more controversy with its creation in the crypto community than Bitcoin Cash. In less than a day after its appearance, BCH's market cap exceeded $7 billion, making it the third-largest cryptocurrency in the world by market cap. Some enthusiasts even insisted it would eventually replace Bitcoin. If you're interested in that coin, then you're probably wondering how to invest in Bitcoin Cash, is it wise to invest in Bitcoin Cash, and "should I invest in Bitcoin or Bitcoin Cash?" Well, you've come to the right place!
Is Bitcoin Cash worth investing in?
First thing's first: can you invest in Bitcoin Cash? Of course! Should you invest in Bitcoin Cash? Well, that's a more complicated question. Let's try to answer it.
It's impossible to give accurate guidance on Bitcoin Cash because there are too many unpredictable factors involved. Despite its numerous critics, Bitcoin Cash is growing, and its developers have quite ambitious plans. Currently, it's the most popular and widely adopted of all Bitcoin forks. So, if you believe in the future of cryptocurrencies, investing in Bitcoin Cash might be worth it.
To me as long as transaction fees are below $0.01 people will recognize little by little that Bitcoin BCH is Bitcoin and that's what it makes Bitcoin Cash an special fork because is the one that is trying to keep the blocks big enough for every day transaction to be cheap and to keep the node decentralized as well. You can't be a peer to peer currency if fees are $10 or more so at that I know Bitcoin Cash has a future, when will BCH takeover BTC, once people realized that BTC tx fees are too high. People in Venezuela realized they needed Bitcoin Cash after their local currency collapsed and they can't afford high transaction fees, same will happen with the rest of the world