What is the Future of Cryptocurrency?
In November 2018, the virtual currency market was shaken by the division problem of Bitcoin Cash, and the whole market rapidly cooled. Bitcoin Cash, which was about S$240 at the time of its birth in August 2017, soared to about S$4,860 in December of the same year, but fell to around S$121 as of December 2018, one year later. What will happen next?
Bitcoin Cash is a currency created to solve the problem of Bitcoin
Bitcoin Cash is a virtual currency that was created by hard forking from Bitcoin blockchains on August 1st, 2017.
The reason for hard forking was to eliminate Bitcoin’s “scalability problem”. Bitcoin’s block size is limited to 1 megabyte, and its processing has been slow to keep up with the ever-increasing volume of transactions.
To solve that problem, a debate took place between developers working on Bitcoin programs and miners, especially the major mining pool in China.
The developers proposed to implement a program called Segwit that would make Bitcoin transaction data lighter and faster, but the miners rejected it, proposing to increase Bitcoin’s block size to 8 MB.
The developers lead the way and Segwit was implemented. In response, miners hard-forked Bitcoin blockchains to create Bitcoin caches.
The beginning of Bitcoin Cash hard forks
Bitcoin Cash has multiple clients involved in development and updating. After discussions, the clients planned to perform a regular hard fork twice a year to upgrade the Bitcoin cache network.
On May 15th, 2018, the first hard fork was held. The increase in block size from 8 MB to 32 MB improves transaction processing speed. With each additional hard fork, Bitcoin caches were supposed to be easier to use and more convenient for practical use.
In addition, a basic smart contract has been implemented, allowing terms and constraints to be incorporated into transactions as well as settlements. There is no strict definition of a smart contract, but it is often described as “mechanism for programming contracts over blockchains” or “protocols that allow programmed contracts to be executed automatically”.
Bitcoin ABC and Bitcoin SV conflict
The uproar was sparked by disagreements in the Bitcoin Cash community over what to expect from the second hard fork update in 2018.
Influential client BitcoinABC’s proposal included WHC (wormhole protocol), which allows tokens to be issued over a blockchain of Bitcoin caches, and DSV (op_checkdatasigverify), which allows Bitcoin caches to be used outside of payments.
Bitcoin ABC is sponsored by the large mining company Bitmain’s CEO Jehan Wu and Roger Barr, who helped the startup of virtual currencies.
This proposal was challenged by a client of Bitcoin Cache, Bitcoin SV. Bitcoin SV pointed out that no WHC or DSV was needed for the Bitcoin cache and suggested increasing the block size to 128 MB and restoring the original OP code.
Bitcoin SV’s Craig Wright, self-proclaimed Satoshi Nakamoto, and a major mining company, Coingeek’s CEO Calvin Air sponsor its company.
Normally, if the two sides disagree, the problem is solved by hard forking and developing each blockchain independently. But this time, Bitcoin SV did not recognize the hard fork. If Bitcoin ABC suggested a disruptive attack on the blockchain in the event of a hard fork, which prolonged the problem and affected the market.
As a result, hard forking did not succeed on November 16th. Bitcoin ABC has taken over the Bitcoin Cash sign. On the other hand, Bitcoin SV ended the feud with a new ticker, a virtual currency called BSV.
Does Bitcoin Cache have a future?
Although Bitcoin Cash has caused a stir, efforts are being made around the world to put it into practical use.
Virtual currency trading app now lets you trade
In July 2018, Bitcoin Cash was added to the Virtual Currency Trading app Robin Hood crypt. Launched in February 2018, the app can now trade 4 different types of coins: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. The free service is expected to attract more users.
And the Virtual Currency Exchange Gemini, run by the Winklevosses who became famous on Facebook, started offering Bitcoin Cash on December 8 after being delayed by the hard fork controversy.
Both Robin Foot and Gemini have offices in the United States, where the listing of virtual currencies is strictly restricted by law, so these stories show that the value of Bitcoin Cash is recognised.
Increase in the number of exchanges using Bitcoin Cash as a key currency
The number of exchanges using Bitcoin Cash as a key currency is increasing.
One of the largest mining pools in China, Via BTC, is based on Bitcoin Cash. Coin EX started in December 2017.
Other exchanges with offices in Hong Kong such as KuCoin and OKEx also adopted Bitcoin Cash.
In addition, Bitcoin.com CEO Roger Barr said in a Bloomberg interview that he plans to launch a virtual currency exchange around Bitcoin Cash.
An increase in the number of exchanges that use Bitcoin Cash as their core means of trading could boost the market by attracting more users.
Implementation of payment systems: BitPay, BitPoint Pay
In August 2018, a major Bitcoin payment company, BitPay became available for Bitcoin Cash payments. BitPay is a global Bitcoin payment company. This time, Bitcoin Cash is supported because the settlement speed is faster than Bitcoin and the transfer fee is cheaper.
BitPoint Pay has been accepting Bitcoin Cash payments since June 2018. With the wallet app, If you put Bitcoin Cash in BiTPoint Wallet you can easily pay at the implement store of BitPoint Pay.
Bitcoin Cash transactions are increasing worldwide.
Movement of celebrities
Celebrities in various industries are also looking to Bitcoin Cash for the future. Yoshitaka Kitao, CEO of SBI Holdings, which is keen on the virtual currency business, expressed his support for Bitcoin Cash as well as ripples.
SBI Virtual Currencies Co., Ltd. of the SBI Group started the service of Virtual Currency Exchange “VCTRADE (VC Trade)” in June 2018. VCTRADE handles Bitcoin caches before Bitcoins.
Mr Kitao, who was deeply concerned about the hard fork problem in November, is eager to increase mining share to improve the structure.
The SBI Group established SBI Crypto Inc. in August 2017 and has been mining Bitcoin Cash overseas since 2018. Mr Kitao says goal will expand the business to take 30% of Bitcoin Cash’s mining share.
Roger Barr, who has invested heavily in the Bitcoin business, has been a supporter of Bitcoin Cache since its birth, saying it is the real Bitcoin. For this hard fork, many are positive about the Bitcoin ABC updates.
Bitcoin Cash on the Way
Virtual currencies have been around for a short time and are being developed every day, as is the case with Bitcoin caches, the daily listings of payment systems and the virtual currency exchange. But as more people use them, they will run into new problems and ideas for improvements will be debated. In that case, it is quite possible that a problem like this hard fork will arise.
But that could improve the speed and convenience of money transfers and ensure the future of Bitcoin Cash. However, price volatility is high and the market is still unstable. Buyers will have to make careful decisions.