On August 1st bitcoin blockchain has forked, thus creating a separate cryptocurrency called bitcoin cash. Both bitcoin and Bitcoin Cash will share the blockchain before the hard fork but will go separate ways after the event, which means that everyone who owned bitcoin before the fork will have an identical number of bitcoin cash tokens recorded in the blockchain.
BCH comes into being
What was the point of creating just another cryptocurrency that is identical to other ones? Turns out, all cryptocurrencies do differ from each other in several aspects. And bitcoin cash is not an exception. Bitcoin first appeared in 2009, when general public had no idea about blockchain, tokens and decentralized currencies. BTC therefore never witnessed major demand or even substantial public interest prior to 2013 and was never suited to the attention it is getting now. As a result, the whole system works slowly. Due to high number of deals committed in bitcoin and low count of operations that can be calculated simultaneously (around 7 per second) it can take hours to complete a transaction during the rush hour. And it doesn’t sound like the currency of the future, right? Bitcoin Cash is aiming at solving the problem of low transaction speed by increasing the blockchain size from 1 to 8 MB.
Is it worth anything?
You bet. Right from the very beginning the new cryptocurrency was valued at around $200, soaring to more than $900 during the very first day. BCH is currently traded between $270 and $300. With a market capitalization of over $4 700 000 000 Bitcoin Cash is the world’s fourth largest cryptocurrency.
Despite relatively high price — no other currency has witnessed comparable degree of success in the very first day of its launch — Bitcoin Cash is currently hard to buy or sell through traditional online exchanges. The problem is that tons of Bitcoins Cash tokens are currently stored on cold wallets. Their owners simply do not have the possibility to sell the cryptocurrency. But selling pressure is still there and it will crush the BCH price once all these people get access to online exchange, as most of them want to get rid of the overvalued cryptocurrency and cash out quickly. Traded at around $900 at some point BCH has already lost over 70% of its value. Yet it is too early to assume the cryptocurrency is worth nothing.
One of the possible outcomes for Bitcoin Cash would be similar to that of Ethereum Classic. After the hard fork, its value dropped to only $1 but eventually rebounded to $15. Still not as impressive as Ethereum, though, that is currently traded at around $220.
According to the vocal members of the cryptocurrency community, most holders of the newly created cryptocurrency are looking for possibilities to get rid of it. Additional selling pressure can be expected to drive the price of BCH even lower. However, if the demand for new currency is not purely speculative, it’s price may very well start moving in the opposite direction. It is too early to make any long-term decisions based on the current Bitcoin Cash performance.Trade BCH here
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future
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