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Why Has Bitcoin Cash (BCH) Failed?

Thu, 12/01/2022 - 00:00
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Sabrina Martins Vieira
Promise of new Bitcoin proved to be just hype and not a need for cryptocurrency market
Why Has Bitcoin Cash (BCH) Failed?
Cover image via U.Today

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Contents

Bitcoin Cash (BCH) was one of the biggest upsides in the cryptocurrency market. However, the altcoin has failed to break through during the last few years. What could have motivated the BCH failure? Read on for the details.

Bitcoin network "problem"

With the rise in popularity of Bitcoin (BTC), more people have started making use of the primary cryptocurrency. That made the BTC network slow and expensive in its transactions.

In 2015, there was already a debate about the usability of Bitcoin in everyday transactions. For this reason, scalability solutions such as the Lightning Network (LN) were created. However, the debate over its security and whether Bitcoin really needed this second layer has been prolonged.

This situation caused the launch of LN to be postponed and only arrive in 2018. Nevertheless, while there was such a discussion, another one arose: the increase in the size of Bitcoin blocks.

Arrival of Bitcoin Cash

The altcoin emerged from the rebellion of miners of the primary cryptocurrency who disagreed with the progress of the network.

At the time, some miners wanted an increase in block sizes so that more transactions could be performed per second.

The expectation was to increase the block so that BTC would become the currency to pay for common everyday things.

But there was a group of miners who disagreed with the narrative and wanted BTC to remain the same. That forked the Bitcoin network and gave rise to Bitcoin Cash. Led by Roger Ver, the altcoin was developed with the purpose of larger blocks, faster transactions and lower transfer fees.

The idea proved to be great at the time — something that made BCH reach the top 10 assets with the highest market capitalization in 2017. But unfortunately for investors who took a gamble on Bitcoin Cash, the cryptocurrency has had a low-key history in the blockchain industry.

What happened?

BCH has similar characteristics as Bitcoin, such as controlled inflation and even halving. However, three main points distinguish the two cryptocurrencies. First, the altcoin has fast transactions. Second, fees for these transfers are low. Third, almost no investor is interested in Bitcoin Cash.

Having a network that performs many transactions per second is of no use if no one is really interested in it keeping its adoption low.

Bitcoin Cash still has its fans, but many investors abandoned the cryptocurrency midway through its journey, as the “improved Bitcoin” narrative turned out to be just another type of cryptocurrency market hype.

Nobody needs a new BTC, as the primary cryptocurrency already fulfills its role of being decentralized and uncensored money very well, unlike BCH.

With influential figures on the crypto market, such as Vitalik Buterin, highlighting that Bitcoin Cash is a failure, the low profitability that crypto mining offers, and the increasing certainty that it will never dethrone Bitcoin, it is clear why the cryptocurrency's capitalization has never again reached its all-time high seen in 2017.

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About the author

Sabrina has been creating content for the cryptocurrency market since 2018. Her career includes work for important news portals in Brazil, such as Cryptonizando and Guia do Bitcoin.
In addition, she is a partner of the portal and YouTube channel É Top Saber.
Her passion for blockchain news and education led her to create the news portal Bolhacrypto.
In order to help companies and projects in the cryptocurrency market to develop, Sabrina has been leading Varandacrypto, a company that offers content for blockchain projects.