5 Things You Need to Know: Bitcoin Cash 3rd Largest Cryptocurrency
Two days ago, on the 1st of August, Bitcoin Cash (BCC) was created from Bitcoin (BTC) - in the appropriate jargon: it forked from BTC. This means that it shares the same blockchain history as BTC, but will be independent in the future. Now it is the 3rd largest cryptocurrency after BTC and Etherium with a market cap of $8 Billion. Yesterday, it reached a peak of $727, and has now leveled out to $427.
There are some vital facts you need to know when considering the inception and future of BCC:
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"FREE MONEY": Most people who were holding BTC received an equal amount of BCC in volume. This is because for every BTC there are two different blockchains continue the old blockchain: the BCC blockchain and the BTC blockchain. The only Bitcoin owners, who do not get BCC are BTC providers, such as Coinbase, which have refused to distribute it, because they do not want to change their system to access the new blockchain and do not believe in the future of BCC.
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Why don't they believe in the future of BCC? BCC is highly ILLIQUID. As of now those exchanges, which have added BCC to their trade-able cryptocurrencies only trade BCC that was credited by the exchanges after the fork. This means many people are sitting on BCC, which they are waiting to sell. 1
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Why don't they trade BCC? Cryptocurrencies are desirable, because through blockchain technology the history of the currency is decentralized. Exchanged demand 6 or 7 blocks of history for currencies not in their system. To create these blocks you need to mine them and for that process to speed up something called the "difficulty" of the currency needs to be adjusted. This happens every 2016 blocks (roughly every 2 weeks).
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Despite prices being artificially high due to illiquidity, BCC holds some promise, since the fork coincided with a change in the underlying code of Bitcoin. This is the Bitcoin Improvement Proposal 148, which is meant to help Bitcoin technology scale and make it more usable. Through publicity BCC is the face of this change to commercialize the use of cryptocurrency.
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There is a chance that BCC is the future. There has been much infighting within the community, with the original users of BTC seeing it as a means to store value like gold, and therefore, opposing the aforementioned BIP 148. 2
Regardless, I would short BCC if I could!!
What do you think is the future of cryptocurrencies? Is it valueless like Warren Buffet says? Or, does it have a great future, considering globalization etc.?
