Since the suspension of the Segwit2x hard fork, we have seen Bitcoin Cash price skyrocketing and Bitcoin losing its market. Bitcoin Cash spiked surpassing $2000 dollars on November the 12th, while Bitcoin lost 40% arriving at $5000 dollars. Why do we have such a situation?
What is Going on with Bitcoin and Bitcoin Cash?
Most of the investors have seen that Bitcoin Legacy is struggling due to the lack of scalability. It is difficult for Bitcoin to handle the increasing transaction demand. More and more users are starting to know and invest in this cryptocurrency, but the network is saturated. CoinStaker has written about big investors arriving at the Bitcoin network and the cryptocurrency market.
The Segwit2x hard fork was intended to help the network to process more transactions than what the network can now. Segwit2x was an idea to fully implement the Segregated Witness and increase the block size from 1 to 2 MB. Bitcoin and Bitcoin Cash have been affected from this.
Investors holding Bitcoin have seen a good possibility to put their funds in Bitcoin Cash, which has 8 MB blocks. Transactions in the Bitcoin Cash network are faster and cheaper than in the Bitcoin one.
The intention of Satoshi Nakamoto was to create a peer-to-peer currency with low fees and fast transactions. In addition to it, the currency should work as a store of value. Bitcoin and Bitcoin Cash could be used as a store of value, but the fast and cheap transactions is only for Bitcoin Cash.
Something important to mention is that the problem of scalability is not solved with bigger blocks or implementing Segregated Witness. The network should find other kind of solutions. Instead of scaling up, scaling to the outside could be a good alternative. Bitcoin Cash will not be able to process all the transaction if the market penetration keeps growing. There is not solution to the scalability problem unless we think about another way of scaling the network.
Bitcoin and Bitcoin Cash Price Evolution
Bitcoin price has lost 40% in the next days after the Segwit2x hard fork was cancelled. Its price reached almost $7900 and arrived at $5500 on November the 12th. Bitcoin market capitalization arrived at $96 billion dollars, crossing the $100 billion barrier that broke some weeks ago.
At the same time, Bitcoin Cash received an incredible bump on its price. On November the 8th Bitcoin Cash was traded around $630 dollars, on November the 12th it arrived at $2000 dollars. That represents a price increase greater than 300 percent in just some few days. Clearly, investors saw a brighter future in the Cash version of Bitcoin. Faster and cheaper transactions could handle better the incoming investors to the network and the market penetration of cryptocurrencies.
Bitcoin Cash, following this price increase, surpassed Ripple as the third cryptocurrency with the biggest market capitalization after Bitcoin and Ethereum. At the moment of writing the article, Bitcoin is traded around $6400 dollars and Bitcoin Cash around $1350 dollars.
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