Bitcoin and bitcoin cash have had a difficult and oftentimes contentious relationship due to how the two developer teams envision the original cryptocurrency’s true purpose. They had traditionally competed against one another for the community’s attention, each trying to prove it has the better solution. Though they share a name, these digital coins are nonetheless worlds apart, yet their relationship is slowly changing.
Solving the Scaling Issue
One of the main reasons behind August’s hard fork was that the bitcoin core team was opposed to the idea of scaling on the blockchain, and decided to keep the block size limit at 1MB and adopt SegWit (Segregated Witness) to cover future needs. This protocol makes it possible to connect bitcoin’s blockchain to off-chain solutions that minimizes the impact of individual transactions on the chain, by storing them somewhere else. The Lightning Network is this other place, and is currently in development with the help of Litecoin to help improve data storage and processing speeds. Bitcoin cash, on the other hand, wanted data to be readily available on the blockchain exclusively, and chose to increase the block size limit to 8MB to counter the scaling initiative proposed by diehards.
Another major emergent difference between the digital coins is bitcoin cash’s Emergency Difficulty Adjustment (EDA) algorithm. This tool evaluates the six previously verified blocks after each block is done. If the process took longer than 12 hours to complete, EDA will drop the mining difficulty to speed things up. This is not only beneficial for making transactions become faster which is attractive to the participants and potential use cases as a payment processing solution, but also helps draws more miners to the network if they have an incentive to improve their own profitability.
Accordingly, bitcoin is considered more of an asset which investors can store value in, rather than use to buy and sell in trading environments. Though bitcoin cash is now also considered an asset, members utilize it more in the payment arena. This ying-yang relationship means that bitcoin and bitcoin cash usually gain and lose price at the other’s expense. A prime example of this inverse relationship was the SegWit2x hard fork. Bitcoin was working to have everyone on the blockchain upgrade the software on their computers so to fix some of SegWit’s issues. Due to a lack of consensus needed to go through with this program, the launch was cancelled. The software update was expected to contribute further to bitcoin’s market value, but the cancellation saw funds rapidly move towards bitcoin cash: the solution that already solves these issues.
Lifting All Boats
During the past four months, whenever bitcoin cash’s price increased, its gain was generally at bitcoin’s expense. Things may be changing soon, however, as a rising tide of money has begun pouring into the crypto market with little favoritism between coins. Some market participants even believe that this new environment will witness bitcoin and bitcoin cash in peaceful coexistence, rather than constantly counting on the other’s demise.
Moreover, money does not discriminate. In recent months, there were impressive returns from both digital tokens, and the entire market besides. Bitcoin cash struggled with block production in mid-August, but managed to quickly bounce back. When the token got up to speed, it was worth 10% of bitcoin’s hash power, but more miners migrate to its side of the blockchain daily. Big brother bitcoin also managed to bounce back after the SegWit2x cancellation. In fact, despite obstacles for both currencies, each has added significant volume and market cap in the last month. Clearly, this rising tide is lifting all the boats that it believes will still be afloat when the revolution finally comes.
Bitcoin’s Brother is Here to Stay
Bitcoin cash was once viewed as the outcast of the bitcoin community, especially when considering the belief amongst loyalists that it was attempting to overthrow the beloved king. After successfully winning over some token holders and miners, the digital coin is no longer an imposter or an unwanted visitor. Bitcoin cash is now perceived as a legitimate token and payment method in the eyes of the crypto community. This kind of attention translates into recognition and a growth in the asset’s trading volume and the public’s support.
Though their differences once kept them apart, they are now each a self-sufficient ecosystem without the necessity of a traditional “rivalry dynamic”. The battle of bitcoin and bitcoin cash to the top of the cryptocurrency food chain has been long, and neither is shy to take off the gloves. While they are two different tokens sharing a name, maybe there is a place for both in the community that once pitted them against each other. Despite an inverse correlation ruling the changes in prices between the two currencies over the last several months, signs are now emerging that the correlation is shifting in favor of both mirroring performance, instead of gaining at the detriment of the other.