This is a tale of two Bitcoins. After a fork in August that created Bitcoin (BTC) and Bitcoin Cash(BCH), we have reached yet another crossroad. While another hardfork was planned around middle of November to boost Bitcoin’s block size, this fork is now dead in the water. The lack of consensus among the Bitcoin community was cited as the reason for abandoning the so-called SegWit2x plan.
Abandoning the fork lifted the Bitcoin price from $7,200 to $7,800 as traders realized their worst fears (an ugly chain split) would be avoided. However, excitement hasn’t lasted. Bitcoin is now trading at around $6,000 at press time, as traders and investors fear that SegWit by itself will not create enough capacity to scale. Indeed, at the time of this writing, there are over 140,000 unconfirmed Bitcoin transactions.
Bitcoin Cash was the surprise winner in all of this, at least temporarily. The currency which had been drifting steadily downward was lifted as high as $2,600 in a dramatic pump following the news of SegWit2x’s cancellation. While the price has since experienced a 50% retrace, spectators were stunned at the sudden rise.
An existential crisis for Bitcoin
The lack of a clear path for Bitcoin’s scaling issues are having a serious impact on Bitcoin’s price. As more users discover Bitcoin and its popularity increases, there is a growing danger that it will be a victim of its own success. We talked with Charles Hoskinson, CEO of Input Output Hong Kong, who elaborated the challenge facing Bitcoin:
More users but also more confusion
Bitcoin’s high prices may have drawn users like bees to honey but many are likely not savvy. There is a high degree of confusion among these users that is making matters worse. A lot of them can’t probably tell the two Bitcoins apart from each other. We talked with Fran Strajnar, CEO of Bravenewcoin, who thinks we are going through yet another round of FUD (fear, uncertainty and doubt). He tells us:
BCH a classic pump and dump?
Altcoins are no stranger to the phenomenon of pump and dump. There are people out there who have the ability to increase the price of a particular coin and when there is enough buzz around a coin, it is simply the matter of dumping it and making a neat profit. Kumar Gaurav, Chairman of Cashaa has this to say on the recent increase in BCH (BCC) prices:
Gaurav is of the view that Bitcoin has gained relative maturity with the passage of time:
Fran also adds his voice:
Both the Bitcoins can exist peacefully
The good news is that as more people discover cryptocurrencies, there is space for both flavours of Bitcoin to exist and prosper. As for the bickering within the Bitcoin community, you can’t really rule out more forks or more Bitcoin variants in the future either. This is just the way cryptocurrencies are. As Hoskinson puts it:
Perhaps democracy is the biggest winner and a byproduct of cryptocurrencies, and that is the silver lining.