‘Genesis Bitcoins’ are the first pacemakers. Regardless of which fork you are looking at, whether Bitcoin Cash, Segwit2x or Bitcoin Core – they all have one thing in common. They share a common seed starting January 3, 2009.
This means that the majority of the coins on both chains have already been mined and both can be mined very little compared to most altcoins. Scarcity creates value. And this value can explode towards realization at any time.
Right now we have two viable options with two very different visions of what Bitcoin is and what Bitcoin should be. Bitcoin Cash (BCC, BCH) is sticking to Satoshi’s goal of a global peer-to-peer currency, while Segwit (both variants) intends to move the Bitcoin blockchain into a settlement layer for the Lightning Network hubs and other solutions of the provide second tier subscription services for fast transactions.
When Bitcoin Cash was first forked, it relied heavily on an emergency difficulty adjustment algorithm to reduce the mining difficulty in order to make it profitable and fast. The EDA was an important step in ensuring the survival of Satoshi’s proposed coin.
The fluctuating difficulty has caused miners to switch back and forth to the more profitable coin. This has led to inconsistent fluctuations in block times, hashrates and, especially with BitcoinSegwit, extreme fees. In fact, the fees recently hit an all-time high averaging over $ 10! The observed vibration is actually not unusual. Similar fluctuations can be seen with old coins, especially GFX processor mining. Bitcoin Cash happens to be the first legitimate competitor to Bitcoin Core with a significant market presence and can cause wild swings in hash power.
While the vibration is frustrating for both coins, it has brought to the fore the inevitable problems associated with limited block size. The extreme overloading of the Segwit chain has far-reaching implications for users and businesses. Price hasn’t reacted yet – but the chart is starting to look heavy and some analysts are calling it “time too short”.
There is no need to find a solution to mitigate EDA-related issues, however, and Bitcoin Cash developers have a number of options (and spoiled for choice) on how best to approach hash dance can be. For many of the options available, we can look at the alts and choose the best options. Surely, a difficulty fitting algorithm that has a smooth curve would almost certainly be a better choice to reduce the sudden shifts in hash performance.
In the meantime, it remains to be seen how Core deals with these fluctuations. A do-nothing approach may be the easiest way to go, but may not be very popular with disgruntled users and businesses.
As for Bitcoin Cash, the lack of a permanent block size limit means that even if these issues are obvious, they can be effectively mitigated in the next block, even after hours. Any backlog is cleared and transaction fees don’t need to go up. It’s really refreshing to see how efficiently the mempool is being used. With Bitcoin Cash, no backlog is built up and built up.
The market will recognize this in good time.
Now that transactions are cheap again, online businesses and merchant accounts can rebuild an entire ecosystem (which was actually up and running but has been cut because of the fees). These companies are re-engaged and trust is rebuilt. Once again, companies have the ability to conduct transactions at an average price of $ 0.05 per transaction, which significantly saves merchant fees and third party implementations. Bitcoin Cash is an enabler.
Bitcoin ATMs are now aiming for a revival. Although they were practically killed because of the fees, they can now work with Bitcoin Cash without being hampered by mining fees. And these ATMs are coming.
Granted, it is indeed frustrating that an entire ecosystem has to be reintroduced now. But this time it happens on the expressway. The code for all Bitcoin applications is already in place – only minor adjustments are required to achieve the Bitcoin Cash equivalent. Many exchanges and wallets that said they didn’t honor a Bitcoin fork have rejected their words and are now openly supporting Bitcoin Cash. The Bitcoin Cash economy is catching up quickly.
But I would like to dwell on one point that BCC / BCH has over the other Genesis Bitcoins. Bitcoin’s ability to execute smart contracts and other applications has been clearly demonstrated in nChain’s recent releases. Bitcoin as a 2PDA is able to do everything that is already thought of in the world of “smart contracts” and much more. As a 2PDA, Bitcoin is not limited to cascading calls in which each individual node has to perform every single function. This is a limitation of the distributed server processing system Ethereum and other equivalents. Bitcoin doesn’t have the gas problem here either.
I’m working on a large article that will introduce some of the potential and possibilities. I look forward to posting this soon. But once a programming language is developed, things can really start to fly. We are currently limited to one simple language that a 2PDA can handle.
But here’s the kicker. You can’t have a limited block size for this to work. Bitcoin Cash can realize Satoshi’s purpose for the ALT-STACK and use it to its advantage. Segwit and Segwit2x cannot. Not with their limited blocks. Suffocation transactions were never part of the intended design.
We are reliving the beginnings of Bitcoin, and there is actually a lot of room to grow.
Eli Aram |
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