Bitcoin Cash, a candidate for perfect cryptocurrency?

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Avatar for Jnavedan
1 year ago

Will there be perfection in the crypto market?


As you know, many blockchain-based crypto projects compete for mass adoption by the population.

Yes, there are a lot of them. 

Of course, we also know that many of these projects will fail and disappear sooner rather than later by their speculative nature.

Let's not forget those launched projects that turned out to be scams. The crypto-verse is not exempt from such clever rascals capable of deceiving the most cautious. 

So, as you see, nothing in the world is perfect, but it is perfectible.

When one speaks of perfection, someone or something comes to mind that brings together the maximum of excellence about the rest. 

Perhaps, there is no perfect crypto in the widely accepted sense of the term as it is subjective. 

But at least, in the rigor of mathematics, if we could come as close as possible.

In this sense, it is worth asking why to start with Bitcoin Cash and not others such as Monero, Cardano Ergo, or IOTA, only to name a few attractive cryptos.

I hope my argument satisfies the approach I bring to you.

If you know about the origin of cryptocurrencies, you will agree that: 

Crypto-currencies aim to replace the existing money and substitute the means of payment in everyday life and on any scale, however small or large those may be.

Do not forget a fundamental condition: to allow electronic payments between peers without trusted intermediaries on the Internet.

Today the world of business and economy runs on the Internet thanks to the convergence of technology that enables perennially interconnected mobile computing.

So, money and currency, as instruments of the economy, will also inevitably be renewed.

You may object that money and currency are only synonyms for the same thing.

And I understand your objection! 

I weighed that way too.

In this sense, it would be convenient for you to review the concepts. 

And how the current system where we make transactions to buy and sell goods and services evolved.

In any case, the difference is that money alludes to a store of value, and currency serves as an instrument for regular transactions.

Hence gold is a reserve of value par excellence, used for millennia, and coins and banknotes as payment methods. 

Now! 

What happens when money has no backing (In something of value agreed upon by the people)?

And a few have the privilege of issuing currencies based on a model of infinite debt.

Monetary phenomena such as inflation, deflation, and stagflation appear, pointing to the abysmal inequality between people.

Yes, a kind of slavery for the majority!

So, it is worth asking ourselves, can crypto perform both uses simultaneously and without the need to be backed by another?

It is where Satoshi Nakamoto, or whoever they are, would have merit for a Nobel Prize in economics.

Of course, we are still a long way from this being possible. 

Technical reasons and power chicanery stand in the way.

Bitcoin (BTC) does not satisfy the conditions for the perfect crypto. 

Why? 

BTC is redesigned as a store of value as of 2017. 

So, it is not suitable for use as a diary peer-to-peer payment method.

In such a way, buying a coffee ready to sip or bread to take home is uneconomical.

On the other hand, the stablecoins proposal sounds attractive but keep in mind; that these are not pure cryptocurrencies, and furthermore, these are backed by the government or corporate debt. 

However, there are Stablecoins collateralized with cryptocurrencies. Whose point of failure remains the referent unit of measurement, the US dollar.

Well! So with all this in mind, I wonder, like you, will Bitcoin Cash be a candidate for the crypto perfect?

Rather than enlighten you on the matter. I would like you to join me in asking the developers if Bitcoin Cash (BCH) has the potential to satisfy the attributes of perfect crypto.

Perfect cryptocurrencies should:

Have a fair initial distribution. Here, you don't have to be a developer to know that Bitcoin Cash is the logical continuation of Satoshi Nakamoto's project.

Of course, today, it is difficult to start a cryptocurrency project without financing. In this sense, there are ICOs on the one hand. As well as Airdrops that grant tokens to active wallets at the time of launch. 


Perfect cryptocurrency should be a robust and efficient consensus mechanism available to everyone

The objective of the consensus mechanism is to process accurate and secure transactions.

There are several types of these mechanisms, the proof-of-work (PoW) being the safest but at the same time criticized for its energy consumption.

Currently, there is a bid to impose the proof-of-stake mechanism, as Ethereum will soon do.

Here it is worth asking whether the Bitcoin Cash development teams will be able to optimize the proof-of-work mechanism. In such a way to avoid the monopoly of highly specialized mining farms with expensive equipment.

I understand that sometimes it is easier and more efficient to start from scratch than to redesign. But I consider it vital if you want to achieve decentralization that prevents censorship.

Concerning the mechanism based on the Proof of Stake, even to prevent institutions with high capital capacity from obtaining sufficient supply to dominate the consensus rules.


The perfect cryptocurrency must have payment-oriented Tokemonics.

What are Tokemonics, you may ask?

Simple, my friend! It is the economics of the project token. It serves investors to see how this will change the world economic system Worldwide.

In the case of Bitcoin Cash, the supply is limited to 21 million. So, it is approximately 100 years to mine the last 3 million based on the Halving.

However, based on the law of supply and demand of economic theory. If the demand increase and the offer stay the same or decreases, the price of the good or service will increase.

In this sense, experts see unintended consequences.

They argue that this will result in an unwillingness to spend, leading to the deflationary death spiral: expensive debt, avoidance of risk-taking, and decreased innovation.

It also stands to reason that an inelastic currency is just as inconvenient as an elastic one.

So, the perfect cryptocurrency should have an adjustable supply (automatic and instantaneous) to demand (preserving value without being anchored to another).

Undoubtedly, there is (a lot) of work to be done yet and criteria to be discussed. Perhaps, thinking outside the box is convenient.

It is clear to me that Bitcoin Cash is perfectible in this line.

Source: Image by Gerd Altmann on Pixabay 

Perfect cryptocurrency must solve the Blockchain Trilemma (Security-Decentralization-Speed).

Well! Perhaps the resolution of the approach Buterin made is unnecessary, considering the alternatives that innovation originates.

Besides, remember perfection is a subjective notion. 

Nevertheless, let us avoid being accused of getting off the hook.  

Consider what Buterin says: a blockchain cannot be decentralized, scalable, and secure (at the same time). Only two of these characteristics can be effectively implemented.

Some projects test (direct) solutions like Bitcoin Cash by increasing the number of blocks and enabling a second layer to handle Smart Contracts (indirect solution). But there is still much to be done and improved.

Bitcoin Cash is not perfect. But it is remarkable how volunteer developers contribute solutions for achieving the best version.


The perfect cryptocurrency should provide privacy. 

Wow! It's a controversial feature in a world where lost transparency is valued. What does one have to hide?

In an ideal world: nothing. Unfortunately, the world is the way it is: full of dangers and rogues looking to take advantage of you, including governments and corporations.

So, a little privacy helps mitigate the risks. It doesn't eliminate the vulnerabilities intrinsic to being human, though.

While Bitcoin Cash's forte is not privacy, it does have ingenious solutions to provide it, such as Cash Fusion. 


The perfect cryptocurrency must be interoperable.

I don't know if it is fair to consider interoperability as a legitimate and intrinsic attribute for the ideal crypto. At least, it should be able to participate without too many problems in state-of-the-art decentralized exchanges that allow the native exchange.

Does Bitcoin Cash have this capability today? I don't think so. 

The perfect cryptocurrency operates on one governance structure: just.

In the crypto-verse, one token equals one vote. The problem is that in the end, few players get to own the tokens.

So, sooner rather than later comes the centralization of power and the vulnerability to react effectively to threats.

To be honest! I can't tell you how it is in the case of Bitcoin Cash. I intuit, it works based on the incentives presented by the development to the miners. So, in terms of governance, it tends to be a technical oligopoly. 

I need to learn more about it. 

So, I declare myself incompetent to evaluate this attribute in BCH. And moreover, it goes beyond the intrinsic characteristics of any cryptocurrency. 

In the end, no matter how much BCH I have in my wallet, I doubt I could attend a democratic event to decide the fate of BCH.

Perhaps, the crux to avoiding the perversion of governance of cryptocurrency-based systems: is to have none. Just situational leadership for projects and threat mitigation.

Source: Imagen de Benjamin Nelan on Pixabay 

Final thoughts

You will agree: that perfection in man does not exist beyond a mind-boggling intention to reach the unattainable.

That cryptocurrencies are more than speculative assets.

That the perfect cryptocurrency probably does not exist, nor will it ever exist.

Even so, the experiment initiated by Satoshi Nakamoto is in the world.

So, it is worth continuing the journey, which is just beginning for a better world if things are done right. 

Whether Bitcoin Cash is the closest cryptocurrency to perfection. It will depend on those who believe in the project and the will to see it through. 

An original article by @Jnavedan

The thumbnail by SnapLaunch on Pixabay 

Cover image by Antoni Ośmiałowski on Pixabay 

I end by thanking all my colleagues in the community, who add value every day here. As well as all my sponsors for believing in the content I share with you.


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Avatar for Jnavedan
1 year ago

Comments

Sometimes I feel like I get more and more entangled every day with what I know about cryptocurrencies.

$ 0.00
1 year ago

Hello, fellow countryman

Relax! It's the same for all of us when we dive into the crypto-verse.

Like everything else in life. If one is constant, sooner rather than later, it becomes part of one without realizing it.

Remember, my friend. We are living in advance of the imminent future.

Greetings.

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1 year ago

Hope BITCOIN CASH will be believed and accepted everywhere for daily peer-to-peer transactions.

$ 0.00
1 year ago

I share your wishes. In the meantime let's enjoy the cryptographic journey with its extreme ups and downs.

Greetings.

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1 year ago