I haven't posted in a while because I've been nervously watching what has been happening to Bitcoin, and gathering up as much information as possible trying to make sense of it all. Finally, I think I am ready to make a post and share my thoughts with all of you. Let me summarize the main points of my opinion:
- Bitcoin Segwit (The Main Bitcoin) will remain the top market cap cryptocurrency and will exceed 100 billion in market cap by end of 2017 or early 2018.
- Bitcoin Cash will remain as an altcoin but will decline in market cap by 1/2 to 2/3. It will fall underneath Litecoin, Monero, and Dash.
- Bitcoin Segwit 2x hardfork is unclear at this point, but for investment purposes whether or not it happens is currently irrelevant.
- With Lightning Network and Atomic Swaps, Litecoin will be the low fee high frequency protocol payment solution and Bitcoin Segwit will be the store of value and main settlement layer.
Bitcoin Segwit (the main bitcoin) will retain its spot as the top cryptocurrency by market cap. This is due to its network effects, which include merchant acceptance, international user brand awareness, decentralized hashing power, government adoption via regulatory approvals, and major exchange USD pairings. No other crypto can overcome these barriers without significant time and investment, and it will be a constant uphill climb to Bitcoins already established infrastructure.
Bitcoin Cash will become relegated to altcoin status and will decline in market value by 1/2 to 2/3. This is because although it is technically built for low fees and intermittently more profitable mining, it does not have the other network effects of Bitcoin Segwit (the main Bitcoin). The current value as of this writing of $620 USD/BCH is artificially high because most coinholders are unaware of its existence and/or are unable to access them as of yet in order to sell them. When large exchanges like Coinbase and Gemini make BCH available for sale, there will be a mass exodus. Bitcoin holders will consider BCH to be a free "cash dividend" and will either convert to BTC or another of their favored altcoins (most likely Litcoin.) BCH is supposed to be for lower fees and faster transactions, but this role is already played by Litecoin. Litecoin already has vast network effects and is technologically more advanced than BCH for these purposes. Other beneficiaries could be Dash and Monero, for their unique attributes as well.
The Bitcoin Segwit 2x hardfork of the Bitcoin Segwit chain is unclear at this point as to whether or not it will happen. For investment purposes, however, it doesn't matter at this time. This is because it will happen on the main Bitcoin chain so holders of BTC will benefit from whatever initiative happens. The main idea here is to remain on the main chain that has the greatest network effects and infrastructure.
With the activation of segwit, both the lightning network and atomic swaps with Litecoin become possible. This appears to be the future infrastructure that all users will enjoy. They will use BTC in order to store and grow their wealth, and they will swap to Litecoin for ultrafast transactions and low fees. Major transactions, wealth storage, logistics management, value clearinghouses and settlements will occur with BTC due to its more robust security, while Litecoin will be the more nimble cryptocurrency for everyday forms of economic activity.
These are my current thoughts on the near to mid term future. Please let me know if you agree, disagree, or have a question!
