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With so many new people to the Bitcoin and Cryptocurrency space I'm sure some are wondering what's Bitcoin Cash? What's Bitcoin Gold? Are they Bitcoin?
In this post I wanted to kind of explain what a fork is as well as more specifically the history behind Bitcoin Cash, and what it is. The reason I focus on Bitcoin Cash is because Bitcoin Cash is really the only Bitcoin fork thus far that has had any real level of support.
Sure we can look to Litecoin, which actually was Bitcoin at one point before Charlie Lee forked it and came out with his own coin along with other developers. What's different about Litecoin however is that rather than trying to co-opt the Bitcoin brand and continue using the same name, he realized he had a new coin, and altcoin, and didn't try to "beat" Bitcoin out for the name so there was really no confusion there.
What is a Fork?
I'm going to try to keep this definition as simple as possible. A fork is essentially people disagree about the future direction of a coin, so one set of developers will change software or change something about the cryptocurrency which can cause a "hard fork" which causes the coin to split into two seperate coins. There are also "soft forks" which are just software upgrades and which a new coin isn't created like Vertcoin and Navcoin recently had, however a hard fork is when one side changes the software and creates a new coin. When this happens for a few hours to a few days it's not safe to send coins after a fork.
In simplest terms let's use an analogy. So Twitter developers disagree on the future direction of Twitter so one side forks off. The origoinal Twitter we'll call Twitter A, the developers who fork off and create a new Twitter we'll call Twitter B.
Now your logins for Twitter will work on both Twitter A and Twitter B. The posting history from your account will remain the smae on Twitter A and Twitter B, however everything moving forward is segregated ie if you make a tweet on Twitter A it won't show up on Twitter B and if you make a tweet on Twitter B it won't show up on Twitter A.
The Bitcoin Cash Fork
The Bitcoin Cash fork happenned back on August 1, 2017. We were expecting a fork leading up to it however the fork was going to be Bitcoin Unlimited or Bitcoin ABC kind of headed up by Jihan Woo. Kind of at the last minute Bitcoin Cash came out of the woodwork and forked.
For a couple days exchanges shut down. Initially exchanges said they wouldn't list it or support it, most notably Coinbase. In order to get a forked coin you typically need to be controlling your own keys ie have a hardware wallet like a Ledger or Trezor or use Electrum or antoher wallet. In some cases an exchange like HitBTC or Bittrex may come out and say they'll split your coins for you. HitBTC and Bittrex are historically pretty good about doing this and crediting users.
Anyhow, Coinbase told users weeks in advance we won't be supporting a fork so if you want your coins move them off our exchange. Many people were either not tech saavy enough or couldn't be bothered to move their coins and then later started crying about how Coinbase stole from them even though Coinbase gave them plenty of heads up so Coinbase finally caved and said they'll hand those coins out January 1 or 2nd I don't recall the exact date.
Now whether this means Coinbase will actually list and trade Bitcoin Cash, or whether they are just letting users access it and send it elsewhere is still unclear.
Just to give a little price history. I don't feel like going back and analyzing every period of the charts but essentially futures markets opened up at about $1600, right before the fork they were trading at about $1100. Immediately after the fork people began dumping it and the price fell, don't recall how low exactly it got but definiately under $200.
A while back the Bitcoin Cash team was kind of manipulating markets trying to make a "flippening" happen. A flippening is the idea Bitcoin Cash becomes the true Bitcoin and Bitcoin is relegated to an altcoin. It didn't wind up happening but for a short period of time Bitcoin Cash was gaining value and Bitcoin was trading sideways possibly losing some. Up until a few weeks/months ago Bitcoin Cash was really hurting trading under $500 and more recently with the bullish altcoin market it's surged up close to $2,000. What does the future hold? Only time will tell.
So is Bitcoin Cash Really Bitcoin?
Now this topic gets kind of into Bitcoin politics. Some will argue Bitcoin Cash follows the true vision of Satoshi Nakomodo the creator, however general consensus is that because it didn't have enough hash power to quote unquote overthrow Bitcoin so to speak it's not Bitcoin, it's simply an altcoin trying to include the word Bitcoin to cause confusion and bring users over to it's side.
The argument with Bitcoin vs Bitcoin Cash is basically large blocks versus small blocks. Bitcoin wants smaller blocks and wants payment channels like Lightening network, essentially opening a credit account with a vendor to take smaller transactions like cofee off the chain, they want to proceed that way where as Bitcoin Cash wants bigger blocks which some people say is less stable and less secure.
Me personally, quite honestly I'm not techie enough to really have an educated opinion on which way is better and why. Part of me doesn't like the "lightening network" and off chain transactions. I also think this is probably more comlicated for your average user. That said personally I'm not a big fan of big blocks or Bitcoin Cash in general either so not really sure what a good solution would be.
All that said, Bitcoin Cash is not Bitcoin. After the fork Bitcoin Cash had an opportunity to essentially get more miners behind them and beat Bitcoin in terms of hash power and they failed to do it so at this point Bitcoin Cash isn't Bitcoin, it's an altcoin no different from Litecoin, Ethereum, Dash, Lisk, and others, however they decided to keep the name Bitcoin in their name "Bitcoin Cash" which essentially just confuses new users and tries to co-opt some of the brand identity from Bitcoin.
To me personally if your unhappy with the way things are going and want to leave to start your own thing that's great, but start your own thing don't try to piggyback off what you left, however their argument is that they are the true Bitcoin, however if that's the case why not call yourself Bitcoin, why take on the "cash" part.
Make up your own decision but personally I'm not a big fan of Roger Ver who's kind of the main guy behind and sort of the quasi spokesperson for Bitcoin Cash. In his earlier days he got in trouble for selling explosives on eBay, in reality sounds worse than it is he was selling little M80 type fire crackers used to scare away birds but in this post 911 world that's pretty serious.
I'm not here to tell you to invest in it or not to. Really I just wanted to give a little bit of the history. I will say this. Bitcoin Cash isn't Bitcoin, the whole situation has become divisive and Bitcoin aka Bitcoin Core definitely has more support than Bitcoin Cash and is the true Bitcoin.
That said Bitcoin Cash is gaining some traction. There is one exchange that has listed Bitcoin Cash as a trading pair ie Bitcoin Cash/Litecoin where as traditionally pairs are either Bitcoin/LiteCoin/Ethereum. Bitcoin Cash is slowly getting more merchants on, they developed a tipping platform on Reddit and are starting to slowly build some more infrastructure like Bitcoin has.
Now after the first of the year will be really interesting, one of two things will happen.
Scenario 1
Bitcoin Cash is passed out to all the Coinbase users who didn't move their Bitcoins off Coinbase. These people all immediately dump their Bitcoin Cash because it was essentially free money to them. They either take the profits or dump the money into Bitcoin, Litecoin, Ethereum or other altcoins. This is very likely in my mind and should in theory cause the price to crash.
Scenario 2
Here is the other scenario and we have to competing things going on. While some people will dump their Bitcoin Cash as in scenario one, another thing which could happen is Coinbase adds Bitcoin Cash as a currency users can hold and trade on their platform. Likelihood is decent as they do want to add more coins in 2018 and if they are already passing it out why not list it.
Should this happen the new Bitcoin users and people who really aren't saavy enough to otherwise go to another exchange and buy Bitcoin Cash now have a new coin they can trade on Coinbase. Just the availability of Bitcoin Cash to the masses could cause the price to grow.
Personally I'm not really sure how things will play out and what will happen but personally I'm not holding Bitcoin Cash and probably won't in the future.
What do you make of the Segwit2x fork planned for December 28th? This was supposed to happen earlier in November but was cancelled. This caused Bitcoin price to drop sharply but then it rebounded as we all know a few days later. Do you expect Bitcoin to rally at the next fork?
What do you make of the Segwit2x fork planned for December 28th? This was supposed to happen earlier in November but was cancelled. This caused Bitcoin price to drop sharply but then it rebounded as we all know a few days later. Do you expect Bitcoin to rally at the next fork?
its a gray area that nobody is certain for sure but looks like one of the proposal is to increase the block size to 2 MB which might be a good thing. Still there are other technical details that I am not sure about so I cant comment.
What do you make of the Segwit2x fork planned for December 28th? This was supposed to happen earlier in November but was cancelled. This caused Bitcoin price to drop sharply but then it rebounded as we all know a few days later. Do you expect Bitcoin to rally at the next fork?
I was intially very confused by this whole thing. I wasn't sure if the Core developers were finally comming around doing something to improve Bitcoin or if this was a different team. It's not the core developers, Bitcoin does need to speed up but the guy behind this Segwit2X thing also is pumping an ICO so a lot of people question his motives.
If you don't believe Segwit2X will be successful and wanna gamble you can right now sell your futures prior to December 28 on either HitBTC or Yobit, HitBTC being the better more legit of the two
Now historically speaking the people who have sold futures have come out ahead in the case of Bitcoin Cash up until recently and in the case of Bitcoin Gold futures to date were higher than the price of Bitcoin Gold live has ever been.
People who sold Segwit2x futures last time wound up essentially getting a free $1600 per coin for a fork that never happenned.
The risk in doing this is either you sell for about $600 and it either winds up overtaking Bitcoin or at the very least the value after it's released surges past $600 and you sold it for less than you could have to. The last time Segwit2X came around futures were $1600 so kind of low right now but if you have a feeling it won't get support you can roll the dice and sell them now and if for some reason it comes out live at like $50 you came out $550 ahead.
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