Bitcoin cash has limited potential, but that could change, industry insider says
The much-dreaded split of the bitcoin (BTC) blockchain finally happened on Monday, but so far it hasn’t had a significant impact on the original cryptocurrency. Despite recent speculation that the separation would result in significant volatility for bitcoin, its price has remained relatively stable in the days following the event. Meanwhile, after an initial price spike to around $727, the newly-created bitcoin cash coin retreated to much lower levels and is currently trading at around $400, according to Coinmarketcap.
Bitcoin cash is the product of a minor fork that came into focus only after the danger of a much more significant split had been averted. A few days prior to the event bitcoin mining pools overwhelmingly signalled their support for a scaling solution called SegWit2x – a compromise between the user-supported Segregated Witness protocol and the two-fold block size increase, preferred by miners. In contrast, the bitcoin cash proposal, which aims to solve bitcoin’s scaling problem by increasing the block size eight-fold, was supported by a small subset of the bitcoin community.
Some industry experts have already expressed doubt about the long-term potential of the new coin. In a recently-published article, CNBC quoted founder and CEO of cryptocurrency exchange Gatecoin, Aurelien Menant, as saying:
"Over the longer term, Bcash's prospects are limited due to the relatively small size of the community maintaining its blockchain, developing its software and using the cryptocurrency." Menant also told the news outlet that Gatecoin would support bitcoin cash trading on its platforms.
However, there is still a chance for the new cryptocurrency to find additional support. The second part of the SegWit2x proposal – the increase of the bitcoin block size from 1MB to 2MB – is expected to take place in November, providing miners stick to their word and make the necessary software updates. If this doesn’t happen, bitcoin cash could receive a boost.
“If most miners decide that for economic reasons they prefer to mine larger blocks and commit more hashing power to Bcash, then it's likely more development work and user adoption would follow, and those conducting business with bitcoin may decide to adopt Bcash instead,” Menant said, as quote by CNBC.
However, he also cautioned that “for this to happen Bcash would need to prove that its technology can match the security features and reliability of bitcoin's software”.
As of 15:31 BST, the bitcoin cash price stood at $385.61, down 40.8 percent from the same time yesterday. Bitcoin cash is currently the fourth-largest cryptocoin, with a market capitalisation of $6.71 billion.