Bitcoin Cash Increasing On-Chain Adoption
The latest inflow of crypto traders and custodial holders on platforms like Robinhood and CashApp raise the question of whether any of them actually plan to withdraw crypto to a non-custodial wallet and hold the private keys.
This is the core of the idea behind cryptocurrencies. Owning our funds without a third party intervening in between.
Investors are attracted to Bitcoin (BTC) for its speculative features and price action.
We do not expect survey results to know the vast majority of new investors in crypto are just “holders” trusting their funds on a centralized exchange or trading platform.
But is it the same for Bitcoin Cash investors? It seems the low fees and instant transactions the Bitcoin Cash blockchain presents are favorable towards actual on-chain adoption.
This is the real adoption, holding our destiny in our hands, and from the looks of it, Bitcoin Cash is the only decentralized network that attracts new users on-chain.
The BTC Network is NOT Growing
Real data refutes the myth that Bitcoin (BTC) network is growing:
Bitcoin (BTC) transactions were always on an uptrend between 2009-2017, peaked in December 2017, and since then, BTC transactions are in a downtrend.
The reason is this:
This is the maximum number of transactions the BTC network can serve. Blockstream devs decided the blockchain shouldn't scale to meet mass adoption, thus, Bitcoin (the BTC version) was left crippled like that.
Any time new users appear and test the network, fees rise significantly up to $50 or even higher.
Adoption within trading rooms and centralized exchanges can't change this chart, simply because most exchanges and platforms just display digits on the side of the user, with no actual on-chain transaction taking place.
BTC transactions are not growing as the public realizes it is just a speculative asset running on top of a network, crippled by stagnating development of Bitcoin Core.
Bitcoin Cash Transactions
The spikes in 2018 result from various stress tests performed by the developers.
During 2018 and 2019, interest in cryptocurrency thinned because of the failures of Bitcoin (BTC). The fees reaching $50 and transactions stuck in the mempool for weeks made every newcomer abandon Bitcoin and this had also an effect on the whole cryptocurrency market.
The message of Bitcoin Cash was clear, though. Bitcoin scaled with its upgraded version of 8MB blocks (currently 32MB).
Bitcoin Cash transactions were on the rise for the first part of 2021, and on average are more than double than 2020.
The transaction numbers dropped significantly recently, but on average comparing 2020 and 2021 have more than doubled. Still, the last drop since December is a cause for concern.
The increase in transactions between January 2021 and April 2022 is attributed mostly to noise.cash which attracted and performed hundreds of thousands of micro-transactions daily as tips, within a revolutionary social media website.
These are transactions permanently recorded on the blockchain, and not “fake” as Bitcoin Core dev (and Blockstream co-founder) Gregory Maxwell suggested, during a time he was at a loss at this achievement by the side of BCH.
SmartBCH Sidechain
There is also one mention here we shouldn’t overlook, the smartBCH transactions and the growth of this sidechain.
SmartBCH is a sidechain to Bitcoin Cash that utilizes BCH as the native currency. SmartBCH transactions are record-breaking lately. The smartBCH transactions are not recorded on the BCH blockchain but the smartBCH network instead. It is a different network running on top of Bitcoin Cash, utilizing its high throughput and bringing an efficient alternative to Ethereum's failures with high fees and network congestion.
Grafana (Average tps on smartBCH in the last 30 days)
Bitcoin Cash is P2P electronic cash for everyone, doesn't exclude 99% of the population with fees lower than a penny.
SmartBCH is a smart-contracts network for everyone. The future of digital finance, offering DeFi, NFTs, Dapps, for all, and not just a small elite.
Transactions on smartBCH bring an additional boost to Bitcoin Cash since smartBCH is running on top of BCH and utilizing BCH as a native cryptocurrency. The BCH locked in smartBCH protocols are increasing and so is the network effect of smartBCH. It should be considered the value of smartBCH alone will reach the valuation of similar smart-contract EVM compatible networks as Polygon, as investments in smartBCH projects are increasing.
In Conclusion
It seems the only community educating its users on the dangers of the legacy financial system is Bitcoin Cash today. All the rest are just trying to attract investors and be part of this system. Meanwhile, every smart-contracts network today except Ethereum is centralized.
The vast majority of cryptocurrencies are just price-oriented and many operate with a centralized approach, being under the control of a private company or even a single developer. Solana, Cardano, Avalance, Terra Luna, Polygon, all have an on/off switch and required manual intervention to clean the networks of DDoS attacks and spam transactions.
IOTA sets the example and is a case study about how the confidence of investors is lost when centralization applies to such networks.
Satoshi stated in the whitepaper the main reason digital currencies failed before Bitcoin. This was centralization by having an admin controlling the databases and being able to adjust the monetary policy.
Bitcoin is today represented as a digital currency with its upgraded version, Bitcoin Cash. This is the decentralized P2P cryptocurrency that works to achieve global-scale adoption as a method of payment.
Networks not offering significant decentralization levels will be forgotten with time.
However, beyond decentralization, there are basic features the base layer of the blockchain should not sacrifice.
Bitcoin achieved a network that scales and offers fast transactions at insignificant fees, without sacrificing the decentralization or security of the network.
Cover Photo by, NASA's Marshall Space Flight Center on Flickr (modified)
Licence: Creative Commons : CC BY-NC 2.0
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