Today the Bitcoin Cash network is scheduled to upgrade the consensus rules in order to improve the network’s functionality. Among the most notable changes are the increase of the maximum blocksize from 8 to 32 MB, adding or reactivating several Bitcoin script operation codes.
The Bitcoin Cash community is anticipating a historic day for the world’s fourth-largest cryptocurrency when it hard forks around 4:00pm UTC on May 15. The Bitcoin Cash network will add opcodes and increase the block size four fold, from 8 MB to 32 MB.https://t.co/5iwMxfq7yg
— Bitcoin (@Bitcoin) May 15, 2018
Bitcoin Cash (BCH) is peer-to-peer digital money for the Internet. It forked from Bitcoin on August 1, 2017. The main reason for the fork to take place was scalability problem – the original Bitcoin code had a maximum limit of 1MB of data per block, or about 3 transactions per second. Although it was technically simple to raise this limit, crypto enthusiasts failed to reach any consensus, even after years of robust debates.
Since Bitcoin Cash came into existence, there has been a long-time argument as to which is the real Bitcoin. For example, billionaire investor Mike Novogratz stated that Bitcoin is the real and the “digital gold”, not Bitcoin Cash. But Dow Jones’ subsidiary Marketwatch saw potential in this currency and added it on its thacking list, according to the report by CoinSpeaker.
In the week from April 17th to April 24th, the price of Bitcoin Cash doubled from about $750 USD to about $1500 USD. In that same period, Bitcoin’s price increased only 15%, from ~$8100 USD to ~$9400 USD. Traders were actively purchasing this altcoin, as BCH price was growing. As was previously reported by CoinSpeaker, cryptocurrency payment service provider BitPay added Bitcoin Cash support at that time, opening an opportunity for brick-and-mortar businesses to use Bitcoin Cash for payments.
According to CoinMarketCap, BCH has suffered a 6,96% loss in value today. Its current price is $1 366,43, while Bitcoin makes up $8 523,77 per coin.
BCH developer community promised to realize a vision for digital cash that they felt Bitcoin itself had failed to deliver: a decentralized, high-volume payment system with low enough fees for anyone to use. However, Bitcoin Cash hasn’t lived up developers’ expectations yet.
The most significant change in the fork is the quadrupling of block sizes from 8 MB to 32 MB, and BCH supporters believe tha bigger block sizes will ultimately lead to a network that anyone can transact on. The average transaction size for Bitcoin Cash is about 200 bytes, which means that each of the network’s 10-minute, 8 MB block could support 40,000 transactions on average, for a total of 5,760,000 per day. In contrast, BTC’s 1 MB (non-SegWit) blocks can each only support 5,000 transactions of the same size, for a total of 600,000 per day.
But not everything is so rosy. Even though BCH is built to handle huge numbers of transactions, it’s only had 19,799 transactions in the past day—just 0.34% of the daily transaction volume it can support. Furthermore, iven if BCH’s bigger blocks can support more transactions, there’s not enough volume yet for that to be necessary.
The fork will also reactivate some pieces of the original bitcoin code that have not been in use for many years. Among these pieces of code is an opcode known as ‘OP_GROUP.’ This code could be used to create tokens on the BCH network.
Another important opcode ‘OP_RETURN’ will be added. This code allows users to store additional data on the blockchain. This code could lay the groundwork for Bitcoin Cash smart contracts.
These two codes could expand the scope of Bitcoin Cash significantly, and grant it functions similar to Ethereum smart contracts and ERC20 tokens, but it is not guaranteed.
What is more, BCH holders will not have their coins doubled or receive any new cryptocurrency as a result of the upgrade. Instead, the value of the old BCH blockchain will be canceled and token holders should be able to use their coins on the new blockchain without a hitch.
Bitcoin and Bitcoin Cash have distinct long-term aims, and the subtle differences in how they’re already handling transaction volume and block size reflect those aims. The difference in block-size approach between BTC and BCH is also setting the stage for two kinds of blockchain: one will supports huge numbers of instant, low-fee transactions on its own (Bitcoin Cash), and another one will invest in an ecosystem of off-chain scaling solutions (Bitcoin). Bitcoin Cash seems to be rapidly growing into its own kind of cryptocurrency, but it still has a long road ahead if it intends to reach the scale of Bitcoin.