BCH Awareness| Pros and Cons

What is BCH?
Bitcoin Cash was started by bitcoin miners and developers equally concerned with the future of the cryptocurrency and its ability to scale effectively. However, these individuals had their reservations about the adoption of a segregated witness technology. They felt as though SegWit2x did not address the fundamental problem of scalability in a meaningful way, nor did it follow the roadmap initially outlined by Satoshi Nakamoto, the anonymous party that first proposed the blockchain technology behind cryptocurrency. Furthermore, the process of introducing SegWit2x as the road forward was anything but transparent, and there were concerns that its introduction undermined the decentralization and democratization of the currency.

In August 2017, some miners and developers initiated what is known as a hard fork, effectively creating a new currency: BCH. BCH has its own blockchain and specifications, including one very important distinction from bitcoin. BCH has implemented an increased block size of 8 MB to accelerate the verification process, with an adjustable level of difficulty to ensure the chain’s survival and transaction verification speed, regardless of the number of miners supporting it.6

Bitcoin Cash is thus able to process transactions more quickly than the Bitcoin network, meaning that wait times are shorter and transaction processing fees tend to be lower. The Bitcoin Cash network can handle many more transactions per second than the Bitcoin network can. However, with the faster transaction verification time comes downsides as well. One potential issue with the larger block size associated with BCH is that security could be compromised relative to the Bitcoin network. Similarly, bitcoin remains the most popular cryptocurrency in the world as well as the largest by market cap, so users of BCH may find that liquidity and real-world usability is lower than for bitcoin.

What are the Pros and Cons of Bitcoin Cash(BCH)?

PROS:

✔ Bitcoin Cash is decentralised:

Just like Bitcoin and other cryptocurrencies, Bitcoin Cash’s value lies in the fact that the network is decentralised, eliminating the need for central banks and taking monetary supply out of the hands of authorities. With nodes being spread globally, Bitcoin Cash is also immune to political attacks, which is a major pro of BCH investing.

✔ Bitcoin Cash is scalable:

One of Bitcoin Cash’s main advantages compared to Bitcoin is its scalability. The team behind Bitcoin Cash is quick to implement changes and make it more scalable, which means that more people can execute transactions and payments all at the same time. As of November, 2020, Bitcoin Cash has a block size of 32 MB (as per CoinMarketCap). High scalability means that Bitcoin Cash’s future potential for adoption is also high.

✔ It is highly efficient:

One of the main pros of Bitcoin Cash is its high efficiency. With much larger blocks than Bitcoin, Bitcoin Cash can record more transactions in each block and make payments faster and at lower costs compared to Bitcoin. The team behind Bitcoin Cash has set a clear roadmap and is considering increasing block sizes once again to resolve possible scalability problems. With the current network load, the queue of unconfirmed transactions is relatively low and usually doesn’t exceed 200-250 transactions.

✔ Bitcoin Cash has low transaction costs:

With the increase of the overall scalability of Bitcoin Cash, validation times and fees of the transactions decrease. Commissions for a transaction of 236 bytes may cost senders as little as $0.001-$0.008, as reported by Bitcoin.com.

✔ Bitcoin Cash is highly popularised:

Even though Bitcoin - the origin of Bitcoin Cash - is still one of the most popular coins in terms of trading volume and market cap, we can’t ignore one of the biggest pros of Bitcoin Cash investing: its popularity. Bitcoin Cash has been popularised by many crypto gurus, including Roger Ver, known as the Bitcoin Jesus. Ver is trying to convince the world that Bitcoin Cash is the true Bitcoin, particularly if Bitcoin continues to struggle with scalability issues and loses its dominance over other coins.

✔ BCH is easy to acquire:

Bitcoin Cash’s native currency BCH is easy to acquire. It is listed on top exchanges like eToro, which drives mass adoption and enhances its investment potential in the cryptocurrency market.

CONS:

So here's what you should know about the risks of investing in Bitcoin Cash.

❌ Bitcoin Cash has low adoption:

Despite Bitcoin Cash’s popularity and potential, Bitcoin Cash has relatively low adoption. Compared to Bitcoin, Bitcoin Cash still doesn’t have much investor confidence and shows lower market penetration. Even though Roger Ver is trying actively to promote Bitcoin Cash, mass adoption is still low. And we all know that adoption rates are crucial to drive the growth of any cryptocurrency.

❌ Bitcoin Cash has branding issues:

One of the major cons of investing in Bitcoin Cash is its branding issues, which can have a negative impact on investor faith. Bitcoin Cash is struggling to distinguish itself from Bitcoin and has also had several splits, including Bitcoin SV. While colourful Roger Ver is trying hard to support Bitcoin Cash and its brand name recognition, the truth is that Bitcoin Cash has a long way to go.

❌ Bitcoin Cash mining is less profitable:

The network’s computing complexity is a big disadvantage as it impacts the speed of extraction of data. In fact, Bitcoin Cash mining is similar to Bitcoin mining. The main difference is that Bitcoin Cash miners get less profit, which may affect their motivation. And while you don’t have to be an IT specialist or a miner to invest in Bitcoin Cash, it’s not a secret that mining affects the value of any cryptocurrency.

❌ BCH has lower liquidity than BTC:

If we consider on-chain transaction volume and volatility of daily returns among other financial factors, it’s clear that Bitcoin Cash transactions are fewer than Bitcoin transactions. This means that BCH has lower liquidity compared to BTC, with BCH pairs being traded less than BTC pairs - a drawback that may affect future prices and mass adoption.

Is Bitcoin Cash a Good Investment?

Yes, Bitcoin Cash has proven to be a good investment, currently ranking seventh by market cap - a significant fact that increases its investment potential. 

Though some critics do not consider Bitcoin Cash a good investment in the long-term but a speculative tool in the short-term, figures show that Bitcoin Cash is growing. Note that at the time of writing, Bitcoin Cash has a 24-hour volume of $1,925,093,750.

Given that Bitcoin Cash is one of the most prominent forks of Bitcoin, more and more investors are taking interest in this coin. BCH is a desired asset, with one BCH trading at $247.63 as of November 19th, 2020. 

After all, Bitcoin Cash is an ambitious project that aims to replace Bitcoin. As Ver recently tweeted: ”Imagine investing in Bitcoin today, but not realizing it was always meant to be cash. Bitcoin Cash” 

As such, investing in Bitcoin Cash has a promising future, especially for those who believe in the future of cryptocurrency trading. According to some predictions, BCH could reach $320 by the end of 2020 - a year that has been turbulent not only for investors but economies worldwide. 

Roger Ver, in particular, believes that Bitcoin Cash may even double in price in 2021.

Other crypto investors also suggest that BCH may witness an upward trend and hit new highs. DigitalCoinPrice is one of the leading platforms that have announced a possible bullish upcoming year for BCH, as well as positive outlooks for 2021-2025.

Put simply, Bitcoin Cash BCH is low-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding BCH to your portfolio.

Is Bitcoin Cash BCH a Safe Investment?

Yes, it can be assumed that investing in Bitcoin Cash is a safe investment. This is based on three factors: adoption, development, and support.

To be more precise, one of the factors that may affect Bitcoin Cash’s longevity is its practical use or user ability to pay for goods and services. The good news is that Bitcoin Cash has real-world applications and is accepted by more than 945 online and 670 brick-and-mortar retailers, which increases its investment potential.

The other two factors that may affect Bitcoin Cash as a safe investment - an active development team and a large community of supporters - are also at a good level. As stated above, Bitcoin Cash has an impressive media presence among Bitcoin investors, with controversial Roger Ver being an active advocate. 

That being said, cryptocurrency investing is a high-risk financial venture.