Clash of Clans: How Crypto Land Is Reacting To The Bitcoin Breakup
Only one cryptocurrency is winning, and it may not be what you think
PHOTO CREDIT: Getty Images
Things are definitely taking an exciting turn in the world of cryptocurrency. Last August 1, at roughly 2:14 p.m. ET, Bitcoin’s (BTC) newest crypto contender, called Bitcoin Cash (BCC), came to town.
While it isn’t exactly the first time another digital currency challenged Bitcoin’s dominion—there are, as of July 11, over 900 cryptocurrencies available over the Internet—what makes Bitcoin Cash quite the controversial competitor is that unlike other cryptocurrencies, it is technically Bitcoin 2.0.
A fork of the original bitcoin blockchain, Bitcoin Cash is borne out of disagreements on how to continue operating the original cryptocurrency. Backed by a minority of miners, Bitcoin Cash is one of two solutions proposed to address backlogging pain points resulting from the growing number of transactions within the nearly 10-year-old bitcoin infrastructure. BCC will still possess all the transaction history of the old platform before the split, but will follow a different technology roadmap that does away with SegWit, giving it supposedly greater transaction capabilities by increasing the size of the blocks from 1MB to 8MB. Purists, or the core developers, are in favor of smaller blocks, which they deem less vulnerable to hacking.
With bitcoin stakeholders unable to agree on a single solution that would have unified the cryptocurrency by the August 1 deadline, the bitcoin breakup became official.
Expectedly, Bitcoin Cash secured its place among the top 3 cryptocurrencies within a day of entering the marketplace. This is not entirely on its own merit—it does carry over all of bitcoin’s historical transactions, including bitcoin’s market cap until the split—but the new cryptocurrency packed a mean punch as it started trading at $490 a coin, with current market cap standing above $8 billion.
The Bitcoin fork drew mixed reactions from the crypto community.
According to Finance Magnates, such exchanges as Coinbase and BitMEX have made it clear they will not support Bitcoin Cash, while others like OKCoin and Kraken will list the new token.
“Bitcoin scaling has been a complicated issue for the past few years, so it’s nice to see forward progress, even the situation is a bit sloppy,” says ZenCash co-founder Rob Viglione in the article. The good news, Viglione surmises, “is that we’ll see experimentation along two distinct preference clusters. Rather than forcing one way or another, we can see how each idea unfolds in real life. This is the major advantage of cryptocurrency markets: Instead of bickering over theory and assumptions, we can just bring ideas to market and see how they perform.”
In a Business Insider interview, Arthur Hayes, the CEO of BitMex, a bitcoin derivative exchange, states the fork would benefit the cryptocurrency in the long run after some short-term volatility and confusion. “There are people with billions of dollars of skin in the game. And they will ultimately go with the superior bitcoin network, and the market will follow,” he predicts.
As of press time, figures from Coinmarketcap.com reveal that the numbers for Bitcoin Cash have since dwindled to $358 per coin and market cap of $5.9 billion. It now sits on the number four spot after Ripple’s $6.7 billion, Ethereum’s $21.1 billion, and Bitcoin’s $46.1 billion.
Coinsource CEO Sheffield Clark, in the same Finance Magnates report, comments that “30 days from now, this is essentially going to be a non-event.” But with less than a week since the fork, Philippines-based Bitcoin trader Jay Villarante surmises it’s still too soon to tell who will emerge the champ among the two cryptocurrencies. “It’s still very hard to form an opinion about the fork, especially since it is unprecedented in the bitcoin space,” he says.
Indeed, as the Bitcoin versus Bitcoin Cash saga continues, it’s well worth noting that another cryptocurrency is benefitting from both currencies’ volatility: Ethereum. While still down 43.22% from its high of $395.13 on July 12, the second most popular cryptocurrency by volume went up by 9.15% as the Bitcoin Fork ensued.
Ultimately, it could be that BTC vs. BCC fight is just drawing attention away from the original battle: Which cryptocurrency will come out on top?