Following a heated scaling debate, Bitcoin Cash came into being about a year ago, equipped with an 8-megabyte block size. Since then, there have been several controversies surrounding Bitcoin Cash (BCH) and the people closely associated with it, giving it an uncertain reputation. Proponents of Bitcoin Cash assert that BCH is the real Bitcoin, which is far from true.
With the rapid growth of the Bitcoin network, the issue of scalability was clearly visible. This led to several key players in the community, exchanges, miners, core developers and other thought leaders in the space to engage in a discussion to solve scalability. One such scalability solution was Bitcoin Cash, which proposed increasing the block size to 8-megabyte which was met with mixed reactions from the community.
Bitcoin versus Bitcoin Cash
The everlasting debate of BTC vs. BCH continues with proponents of each coin putting forward their own arguments. When looking at several aspects, Bitcoin outruns Bitcoin Cash such as in terms of network statistics as well as exchange data.
One of the key players when it comes to Bitcoin Cash has been Bitmain, a mining company which is in majority control in the mining hardware sector.
Most recently, Bitmain raised a pre-IPO round amounting to $400 million USD which subsequently saw the company’s value rise to an impressive $12 billion USD. There have also been rumors that the company netted $1.1 billion USD in profits this quarter and is currently preparing for its IPO in Hong Kong.
Brendan Bernstein, a former Goldman Sach analyst, notes that only 1400 out of the 62-kilobyte blocks have been over 1-megabyte, which comes down to roughly 2.2%. This statistic contradicts the basic premise behind the Bitcoin hard fork.
The use of Segwit in scaling issues
Furthermore, Bitcoin has seen the use of Segwit which equips the block sizes of the currency at around 4-megabyte – a size barrier which only 193 Bitcoin Cash blocks have ever crossed. This, once again, contradicts the premise behind Bitcoin Cash. Moreover, Segwit is a clever tactic employed by developers in order to solve the scalability issue, apart from mitigating the need for a hard fork.
Taking a look at volume, Bitcoin exceeds Bitcoin Cash by a huge margin: BTC/USD trading volume exceeds that of BCH by a multiple of twenty. This points towards the value proposition of Bitcoin, as well as showing a reflection of the token’s consumer demand.
An interesting assumption that could be made might be that institutional investors who are looking to gain crypto exposure primarily lean towards Bitcoin, as opposed to Bitcoin Cash. With Coinbase Custody recently launching, along with rumors that they’ve bagged a $20 Billion hedge fund, the entry of institutional investors into crypto asset markets might as well have a considerable effect.
Clearly, smaller blocks coupled with a two-layer scaling seem to be an optimal solution to the heated scaling debate. Bitcoin’s Lightning network has received critical acclaim from several thought leaders in the industry such as with Twitter CEO Jack Dorsey who has invested funds into Lightning Labs.
At the time of writing, there are 2,101 nodes on the Lightning network which have active payment channels, over 10,990 channels, and a cumulative figure of 3,005 nodes. Although Lightning is in its early stages, it has shown a lot of promise along with critical developer traction.