BCH Crypto Profile

Welcome to the Bitcoin Cash Crypto Profile – where we delve into our research on all things Bitcoin Cash. New to cryptocurrencies? Access our Blockchain 101 material before you dive in!

If you would like to learn more about our scoring methodologies please click here.

Relevant Links

Whitepaper
Reddit
Website
Telegram
Twitter
Github
Facebook
Other Github

Profile Snapshot

History of Coin

Blockchain Use Case (1.3)

Bitcoin Cash, like Bitcoin, is striving to become a widely used currency that is completely digital. The limit on the amount of information the blocks on the Bitcoin blockchain network could store was becoming a problem. A part of the community split away from the main network because they had a different solution in mind. 

The Bitcoin Cash blocks can hold more information than the Bitcoin blocks are able to. Believers in Bitcoin Cash claim this will allow the network to process transactions more quickly. This, along with lower transaction fees, can help Bitcoin Cash become a true digital currency.

Development and Management (1.2)

Development Team

The software is updated by a variety of different groups. Projects like Ethereum and Litecoin utilize central development teams but the Bitcoin Cash project does not. This means that the people working on the project are not well known.

The following are the main groups that work on the project:

  1. Bitcoin ABC
  2. Bitcoin Unlimited
  3. Bitcoin XT

Advisors and Other Influences

Roger Ver is the projects biggest backer. He first started investing in Bitcoin in 2010. He was a founding member of the Bitcoin Foundation which funded the development of the Bitcoin project until it’s near bankruptcy in 2015. Ver went on to invest in several other successful crypto startups including Ripple, BitPay, Kraken and ShapeShift. Roger is currently the CEO of Bitcoin.com. Ver recently traded all of his Bitcoin for Bitcoin Cash.

Haipo Yang is another highly successful board member of the Bitcoin Cash Fund. Yang is the founding member of ViaBTC which is the fourth largest Bitcoin mining pool in the world. ViaBTC was the largest mining pool that advocated for larger block sizes and against the Segregated Witness software update. ViaBTC is currently the largest Bitcoin Cash mining pool.

Competition and Risks (1.1)

Competitors

The following are the coin’s main competitors:

  1. Bitcoin
  2. Litecoin
  3. Stellar
  4. Ripple
  5. Vertcoin

Competitive Advantages

The following are competitive advantages:

  1. Wide group of developers means no bias and large amount of people working on potential solutions.
  2. Can (potentially) solve all problems on the blockchain. Does not require off blockchain solutions.

Risks

The following are risks that should be considered:

  1. Comparatively weak brand in the marketplace. It will be difficult to overcome Bitcoin without vastly superior technology.
  2. Lack of clear development lead might make investors think twice before putting fiat currency into Bitcoin Cash.

Network and User Trends (1.4)

Transactions per day have increased since this cryptocurrency was created. Since August 1st transactions per day have seen an increase of 245%. Average daily transactions stand at close to 181,000 transactions.

Fees on the Bitcoin Cash network are low compared to competitors. The average transaction fee on the Bitcoin Cash network is 27 cents. Fees have increased by 88% since August 1st. An increase in fees is considered okay as the network takes on more users. It will be key to see if fees can stabilize as the network begins to mature.

Bitcoin Cash has a HHI of 2,264 and is considered to have a highly centralized distribution of approval power. This could negatively affect the network in the future.

The amount of active users increased by 224% over the last 6 months. That means that there are close to twice as many users as compared to how many there were in August. This increase can be the result of more investors exposing themselves to crypto.

Financial Considerations (1.6)

Financial considerations are important. We believe that BCH is a highly speculative investment at the moment.

Conclusion

The verdict is still out on Bitcoin Cash. The part of the community that hard forked the network believe they are being true to the original whitepaper written by Satoshi Nakamoto. The Bitcoin Cash supporters argue that an increase in the block size was always intended and that it is the only sustainable solution to the network’s problems.

Those against the increase in the block limits state that larger block sizes would further centralize the approval power in the network. Only large mining operations would be able to operate full nodes when block sizes are larger.

Time will tell if increasing the block size limit is the best answer. When the Bitcoin Cash network starts to process larger amounts of transactions the truth will be known.

Even if the larger block sizes turn out to create a network that is able to process a larger number of transaction at a lower cost that still might not ensure Bitcoin Cash’s success. Consumers and businesses could still decide to adopt Bitcoin at a higher rate. Or another cryptocurrency, like Litecoin, could develop a protocol that is able to process more transactions at a lower cost.

BCH certainly has a tough battle ahead. It’s difficult to see both Bitcoin and Bitcoin Cash surviving. Though it might not be a great idea to go all in on Bitcoin Cash it might be a good idea to keep some in your portfolio, especially if you hold large amounts of Bitcoin.

Overall Score: 6.6

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