The planned update of Bitcoin Bllockchain SegWit2X. The goal of this event was to reach a consensus on increasing the block size so that transactions within the Bitcoin network can be handled faster and without delays.
Yesterday, the price of Bitcoin Cash unexpectedly rose by a whopping 40%, with Bitcoin losing ground. In the following article we would like to try to explain the reasons for this.
The Eternal Debate: The Bitcoin Scaling Problem
It has been a long problem within the Bitcoin Blockchain to perform all transactions, especially with large volumes, on time and at still tolerable transaction costs. Especially in recent times you could read in forums often, that the transaction fees are again exorbitantly high.
SegWit2X should solve this problem and finally ensure that the chain runs more economically and faster. Satoshi's whitepaper only ever made the Bitcoin as public as the network can adequately handle the increasing demand.
But what does all this have to do with the Bitcoin Cash Rise?
Bitcoin Cash was created in a hardfork at the beginning of August and thus brought its own blockchain to the start. The crucial difference to Bitcoin Blockchain is the block size that can be processed.
The Bitcoin Blockchain is able to generate blocks of up to 1 MB in size and to fill and manage the data. By contrast, the Bitcoin Cash chain has a block size of 8 MB and is thus able to process 8 times as much data as the original Bitcoin.
This makes the blockchain faster and more efficient, of course, and can process more transactions at the same time as Bitcoin. From this point of view, Bitcoin Cash solves exactly the basic problem that has been hotly debated for ages in the Bitcoin community.
As the real solution to this problem of Bitcoin (SegWit2X) has been put on hold, many investors have probably switched parts of their capital into Bitcoin cash. This fact was also evident yesterday on coinmarketkap.com. Whenever the Bitcoin price has gone down, the Bitcoin cash price has risen and vice versa.
Currently, the Bitcoin price as well as Bitcoin cash has stabilized at a level that, of course, is far from the end of this rekindled fight.
Forecasts from some of the big names in the Bitcoin scene (Roger Ver), namely that Bitcoin Cash is actually the true Bitcoin and closest to Satoshi Nakamoto's vision, further fueled the capital reallocations observed yesterday.
At present it is not possible to predict exactly how the market will develop. It's definitely exciting to see how the duel between Bitcoin and Bitcoin Cash will develop. We will keep you up to date as soon as there is news.
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