Preliminary ramblings

In the last two months I have read many articles about the world of cryptocurrencies, especially here at read.cash, as well as on other portals specialized in these topics.

As you might expect, both on noise.cash, and here, you can see the great enthusiasm that community members have for Bitcoin Cash. I must be honest, at first, I had my doubts, and even prejudged the minimalism of the applications and the fact that they are not decentralized running on the BCH blockchain. However, I recognize that administrators and developers, who maintain their anonymity, do a great job spreading awareness of this genuine variant of Bitcoin to drive the long-awaited mass adoption of this technology.

The ease and intuitiveness of the flourishing ecosystem of applications for Bitcoin Cash greatly help the common people, who do not have great knowledge of this type of technology. Although it is also necessary to admit how intricate it begins to become when digitizing activities until now reserved outside the virtual sphere. For example, the digitization of the arts, such as music and painting that you can now see, hear and touch only through interfaces that fuse analog with digital in augmented reality.

In this sense, the range of projects is taking a fascinating course and we will not cease to be amazed shortly. Let's not be hypocrites though, most of us, being tech enthusiasts, came here looking for so-called free money. I think at this point in the game, you will take for granted that there are few free things manipulated by man. I dare to affirm that nothing is free, only the gift of God and that escapes our full knowledge. You do not believe me! So, explain what life is and why the universe itself. Tremendous challenge.

I propose you tackle easier questions. Let scientists and philosophers rake their brains in solving arcane mysteries, even if they are free. I propose you elucidate the mystery of Bitcoin Cash for newbies like me.

With certainty, creators and well versed in technology and finance will be clear about the behavior of the markets for crypto assets and currencies. In price volatility, there are great opportunities and risks. A carousel of emotions for those who are immersed in the depths of the dynamic emerging world with each idea transformed by technology.

The common man only wants to taste a piece of the cake, so he dabbles where he can, how he can, and with what little he has. Most likely, you who read me are on the same side as me. However, this does not mean not trying the cake. You remember the sentence, "knowledge is power." So learning is the way.

Today I posted another question on noise.cash. Why is BCH undervalued? Despite the more than 600 followers, I did not expect many answers about it, it was only a rhetorical device to write this article. However, @BlueMoney, @drubid, and @funnel were so nice leaving their impressions. In short, popularity and capital.

A brief investigation

The word's popularity and capital reverberate in my brain as I write this article. Sentence of popular knowledge such as the paraphrasing of money is cowardly and flees at the slightest danger, now it is mixed with the popular. Yes! I have a tangle on my mind, and I imagine large investors being popular by betting on Bitcoin Core (BTC) instead of Bitcoin Cash (BCH). Shouldn't they be afraid of putting their capital in the less efficient of the two? Something smells bad.

What determines the value of a coin? Why would someone invest their capital in a cryptocurrency?

If I did my homework right, the answer to the first question is the result of dividing the investment amount by the number of coins supplied to the market and expressed in terms of the reference currency (the US dollar). Of course, the problem here is whether the issuance of the coins to the market is finite or infinite (not determined). In the case of BTC and BCH it is finite. So the connoisseurs see strength in this.

Now, who or what determines where the balance tips when investing in a project? In the case of BTC and BCH, based on what has been investigated so far, the technical characteristics expressed in the utility, speed, and low transaction costs tip the balance to BCH, but the investment is directed the other way. For sure, I have overlooked other factors that are outside the information summaries provided by the exchange houses.

Here I see an interesting hint that should not be lost sight of. Exchange houses are the interfaces between cryptocurrencies and fiat money. There is a marked analogy in the methodology applied to the stock market and the crypto market. So I intuit that the reason is mere speculation and other reasons of which I could only speculate when thinking about the owners of the large capitals involved. Neither you nor I can influence the trend and preference at this time. Maybe in the future?

The economic rationality so claimed by the theorists of the past these days is violated by the non-rational motives of modern actors. For example, Doge, popularity, or manipulation?

By the way, less than a week ago I came across a website that applies a methodology to determine fair values ​​in some cryptocurrencies. Of course, among which are our esteemed BCH. I invite you to take a look at https://www.coinfairvalue.com/

The report is updated every ten minutes and shows the main cryptocurrencies including the dollar and the Euro, I suppose as the benchmarks. I noticed the exclusion of some tokens. I am still studying the methodology associated with the calculation. I suppose that the excluded ones are not strictly cryptocurrencies, for example, the Tether.

How undervalued is BCH? The methodology indicates that it is the most undervalued of the one studied. The fair value of BCH is around three thousand dollars and at the time of the capture of the report, it barely reaches 16%. Now I understand why @MarcDeMesel invests in BCH, without prejudice to his philanthropic work in our community and a laudable way to stimulate the generation of valuable information about the real bitcoin.

Table prepared by the writer

Source: https://www.coinfairvalue.com/

Perhaps, this table should have preceded the previous one, by showing the rating of the coins for reasonable capital. As you see, BCH is among the top five, and if the dollar and the Euro are excluded, it would only be surpassed by BTC. Interestingly, ETHER also supports it. I still need to dig into relevant information to explain why. He intuited that the highest reasonable capitalization is a function of the time of presence in the market (2009), which implies a greater number of Holders. In addition, the effects of the 2017 hard fork that gave birth to BCH and the struggle fought since then should not be underestimated.

Table prepared by the writer

Source: https://www.coinfairvalue.com/

Final thoughts

Bitcoin Cash is a formidable currency with the potential to power the monetary and financial revolution that today's society requires. It is strongly undervalued for reasons that go beyond what is presented in this article, and that merit an in-depth study in the search for clues and evidence that support hypotheses and sensible theories that go beyond pure speculation.

BCH is a legitimate option worth supporting in the mass adoption race. An alternative to getting out of poverty in which a large part of the population is plunged. An argument that could support some new crypto ramblings.

I am not a financial advisor or expert, so ignore me if you want, but as far as I know, it is not a bad idea to invest in the success of BCH, despite whether it is popular or not, and the intentions of some big investors manipulators. I think rationality will prevail in the end.

An original article by @Jnavedan

Cover image by Gerd Altmann on Pixabay