Bitcoin Cash continues to outpace its counterpart in daily gains. As the market shows early signs of stabilization, many are asking why Bitcoin has not seen the sharper rise some expected.
Is a new dawn breaking for Bitcoin Cash?
This morning, the vast majority of cryptocurrencies in CoinMarketCap’s Top 100 have recorded upward movements, sparking questions about a potential industry recovery as some countries begin to flatten the coronavirus curve.
Although the price of Bitcoin jumped roughly 3.5% over the past 24 hours, several analysts had anticipated a more dramatic surge.
With announcements that Italy will extend its quarantine period, and other countries introducing stricter measures to curb the spread of COVID-19, global leaders — including the U.S. president at the time — stressed that self-isolation in the coming weeks would be crucial. As a result, some investors have started to view cryptocurrencies as a hedge against the economic uncertainties created by the current crisis.
Rising demand has pushed BTC higher, with prices around $6,450 at the time this article was published.
Bitcoin’s limitations need addressing going forward
Many critics point to Bitcoin’s scalability challenges. The network can process only about seven transactions per second, making it slower and sometimes costlier than competing networks. This bottleneck leads to transactions piling up in the network’s mempool, resulting in delays and higher fees.
These inherent constraints appear to undermine Bitcoin’s original purpose as a peer-to-peer payment system, prompting interest in alternative coins like Bitcoin Cash. Bitcoin Cash improves scalability, but so far it has not surpassed the market leader. Could that change in the future?
At the heart of the debate is block size. Originally, Bitcoin used 1 MB blocks; this has effectively increased to 2 MB in some implementations. Bitcoin Cash, however, launched with 8 MB blocks. Larger blocks can store more transaction data per block and could have helped prevent the congestion seen by BTC in December 2017.
While Bitcoin Cash has yet to fully leverage the potential of its larger blocks, that technical difference may appeal to users and businesses seeking a cryptocurrency that can scale for real-world use.
Prominent Bitcoin Cash supporter Roger Ver argues that BCH aligns more closely with the original Bitcoin philosophy and predicts that, over time, Bitcoin Cash will grow in trading volume, market capitalization, and user base.