In the wake of SegWit2x’s indefinite delay, Bitcoin Cash has rallied violently enough to distort the Bitcoin continuum. Repercussions have been swift and inebriating. For the first time since its inception Bitcoin’s dominance is threatened, causing a precipitous, continued correction in its price.
It Could be Worse…
If it was not for Bitcoin’s limitations, the correction may already have become a blowout collapse. Its network has become so clogged that an estimated 107,000 transactions have been frozen (not verified or accessible after 12 hours). That’s over $100 million given the median BTC transaction value tracked by bitinfocharts.com of $938 (at press time).
Where is that capital going? Bitcoin Cash? Other altcoins? Out of the crypto market entirely? Glance quickly at the BCH price, and you’ll see that much of it has gravitated there. Its price has rocketed over 100% since yesterday from $621 to $1300. BCH also topped the trade volume of BTC — the first time in history an altcoin has done this. Presently BCH rules every global exchange, with Bitcoin falling to #3 in cases.
Bitcoin’s network is running steadily at over 14 tx/s setting new records, but it is not enough to meet the demand. Fees have spiked to over $7 and will likely head higher as hash power dwindles in favor of BCH’s blockchain. Miners will shift to mining BCH as it becomes more profitable, and this cycle will become self-perpetuating. It almost seems that these recent events were designed specifically to prove that Bitcoin Cash can deliver what Legacy Bitcoin refuses to.
The Hash Power Shift Has Begun
The timing of Bitcoin’s severe bottlenecking is not coincidental to the rise of Bitcoin Cash. Already miners are moving over. A week ago, Bitcoin had 5 times the hashing power as BCH. Now they are nearly equal, approaching 5 exahash each.
Except only one of the networks is running sluggishly. BCH is also more profitable to mine now. Its difficulty stands at 130 billion, and Bitcoin’s is just shy of 1.4 trillion. That clocks its difficulty at roughly 9.5%. Mining can generate nearly 10x the coins over equal time frame which are worth roughly 1/5 as much — a distinct advantage for BCH.
The Future with Bitcoin Cash
Merchants, miners, and investors have all been quick to shift to Bitcoin Cash. Take a look at what has happened since Segwit2x collapsed:
- Roger Ver and Calvin Ayre release joint statement endorsing BCH as the true Bitcoin
- Bitcoin Classic shuts down, endorses BCH, gives it 6 months to fully replace Bitcoin
- Community signals need for scalability in terms of capital flight to BCH
- Bitmain begins accepting only Bitcoin Cash for its mining equipment
- Bovada announces acceptance of BCH for funding
- BCH tops BTC in transaction volume
- Bitcoin Cash looks to hard fork on November 13th
- The hash power of the two networks has nearly met in the middle
Many still doubt that Bitcoin Cash could ever challenge Bitcoin’s hegemony as it carries such a powerful household name. Comparatively, most people know of Bitcoin whereas most are unaware of Bitcoin Cash. If it goes mainstream and drops the ‘cash’ suffix as Tom Zander has postulated, however, then Bitcoin Cash would effectively possess the household name.
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