The first bitcoin chain-split fork was born precisely a year ago following a dispute over how to increase network capacity to accommodate more demand.
A debate that had raged for about three years was settled in favor of BTC as far as keeping the ticker number, and thus the market share, was concerned, but a sizable proportion of bitcoiners were unwilling to continue with limited on-chain capacity.
On August the 1st 2017 they thus forked and increased capacity to 8MB after a chain-split that created a new network with its own nodes, miners, name, and ticker.
Bitcoin Cash reached about 50% of bitcoin’s value on the day of launch or soon after. It very briefly overtook ethereum in market cap. It was quickly integrated in pretty much all of bitcoin’s infrastructure, and now has its own roadmap that aims to follow Satoshi’s vision of a peer to peer currency with no intermediaries.
In many ways, BCH has been a great success. It lived, and continues to live, and some might even say it thrives in some ways. It is re-instating some scripts, it is implementing some efficiency code, it has brought back some dapps on what some call the real bitcoin.
In many other ways, BCH has failed. Its blockchain is seeing little usage. Its community remains obsessed with Bitcoin Core, including some “leadership” figures of its community. A livestream of today’s celebrations in Tokyo features almost naked female dancers. And development, although progressing, could progress a lot more substantially.
The real failure, however, was this settling as bitcoin’s little brother if you like. Maybe the addition of Cash makes that necessary just by optics, as perhaps does the non BTC ticker.
Yet the market seems to have rejected BCH in favor of BTC as far as any relevant measure, including the number of transactions which stand at around 10% of BTC, in line with price, are concerned.
While memory is fresh we need to understand why. Were they unconvinced, or would the same have been the case if BTC was currently taking BCH’s approach and Bitcoin Core forked off with their fork then settling where BCH sort of has?
That is, does the market actually not care, or is it uninformed, or do they actually favor the Bitcoin Core approach or are they kind of just following the wind?
In other words, can public blockchains actually be co-opted, or does this one data point not suggest so at all?
Can one man, Theymos, and one social platform, r/bitcoin, really decide the direction of a currency? Can one company? Was that the case here or does this one data point say nothing of the sort?
The difficulty in answering such questions lays in the considerable complexities and perhaps in crypto’s current unique standing point where most did not know what a bitcoin is a year ago, let alone capacity and the rest of it.
Something like BCH, furthermore, has to compete not just with bitcoin, but with all other cryptocurrencies and it hasn’t been able to do so even against Ripple.
BCH’s current market cap is around $4 billion lower than XRP’s and a great part of it is because XRP has actually enjoyed some relatively decent news in numerous banking tests and pilots, while BCH has been consumed with shouting at the clouds as if it thinks its only proposition is being the anti-bitcoin.
While in fact its proposition was imagined to be a peer to peer currency when bitcoin says they’re a store of value. To which BCH would say they are a store of value too, but also a means of exchange for commerce.
BTC to that would say: well fine, go get your commerce. You have all of the infrastructure you previously had, yet your transaction numbers have fallen by 90%, if not more, from 300k or even half a million a day to 20k. Where is your commerce?
Currently no where and part of the reason for that might be because they have not even attempted to attract it. You see, a business would have to ask why build a remittance business on BCH rather than eth, or bitcoin or ripple?
That’s if they even know what bitcoin is, let alone the rest. Now imagine going to a merchant and saying: do you accept bitcoin cash? His reply: bitcoin? You say: No, bitcoin Cash. And then the inevitable: what is bitcoin cash?
How would you reply to that? He or she is probably already suspicious and maybe even thinks you’re scamming. You certainly don’t want to now go on explaining scalability. You can’t really say fast and cheap because he or she probably thinks that’s bitcoin, even though at times it isn’t.
So what is bitcoin cash? It is obviously not bitcoin because it is not the longest chain. You can use the argument of some Bitcoin Core developers and say it has to be the valid chain, not just longest, and you can argue BCH is the valid longest chain, but everyone calls BTC bitcon, and BCH bitcoin cash, so in a five minutes conversation it isn’t bitcoin.
It is like bitcoin, but how is it different? Because it has more capacity you can say, but then you’d have to explain why btc doesn’t and you’d probably have to end up with bitcoin’s and BCH’s blockchains do not scale by the number of nodes.
So then how do you scale, a business can ask, and that’s where BCH hasn’t provided a satisfactory answer so far if we go by their lack of usage by businesses in the past 12 months.
In a dream world, BCH devs would have laid out a plan for fraud proofs, sharding, lightning like networks, payment channels, and so on. Eventually they perhaps might, but the public blockchain space is very competitive and it is getting more and more competitive by the day.
That’s, in many ways, the point. Many currencies and projects competing against each other with some gaining much market share while some might want to be a niche currency and so on. Shouting at competition in that environment isn’t going to get you anywhere.
Thus the lesson perhaps here in this anniversary is that entitlement isn’t quite something a chain-split currency can enjoy. Being against something is also not a great value proposition because there is plenty BCH is for and can work towards.
They should focus a lot more on what they are in favor, and they should not expect what they are for to just be handed on a plate. They should start with, for example, how do you explain BCH to someone who has heard of bitcoin, but nothing else?
For eth it is somewhat easy: the world computer, plus smart contracts and so on. For litecoin they accept they the little bro, silver to gold. For BCH you can say it is digital cash, it’s even in the name, but then you’d have to back that with so and so accepts it for payments and so on.
In other words, BCH has to get to work. All other cryptos are hard at it, including bitcoin which is trying to get institutional investors and so on.
BCH has to go out and prove it is a currency and for that it has to get some positivity, it has to get some ambition and it has to leave history to history with it addressed only when relevant as bitcoin does say with the banking collapse, rather than constantly.