On Thursday 15, November, the fork for Bitcoin Cash cryptocurrency (ВСН) is to be held, which is in itself the fork of ВТС. This fork provides for a separation into two versions of altcoin, and, in this case, the owners of Bitcoin Cash will get a similar amount of new tokens. In theory, a cryptocurrency grows before each fork, and this is an opportunity for investors to earn money on the subsequent sales of new altcoins.
Speaking about Bitcoin Cash – the situation is reversed. Instead of increasing, this cryptocurrency has lost around 17% during the week, and only partially won its losses of 13th of November.
Bitcoin Cash: why investors do not trust a fork
Bitcoin Cash is a simplified alternative to classic Bitcoin, which faced a number of problems in 2017. One of them was a scaling problem. The network was just unable to cover such a big number of users. POW protocol (proof-of-work) turned out to be too “slow”, resulting in longer processing time and higher commissions in the network.
The same problems affected miners, who had to switch to ASIC – a special type of microchips, customized to perform blockchain calculations. The fork for Bitcoin Cash was supposed to solve a part of these problems, using POW consensus algorithm. This fork is already a second one for ВСН within the last year.
The first one was quite calm and without any coin division, but it is not so smooth this time. As a result of the fork, it is expected that on November 15 two new coins will be available: Satoshi Vision (SV) and Bitcoin ABC. The developer of SV is a popular cryptocurrency personality Mr. Craig Wright, who predicts the increase of the block size up to 128 Mb. The core environment of ВСН is incompatible with new SV protocol, upholding the idea of the division in the direction of Bitcoin ABC protocol.
The differences in the environment of ВСН have already led to unpleasant consequences:
- Followers of ВСН believe that the separation of SV is false and do not support it.
- A number of processing centers (BitPay in particular), made a statement saying that, so far, they were not planning to support “traditional ВСН”, thereby giving a support to the new division.
- Coinbase, OKEx and Binance are planning to support Bitcoin ABC, and Poloniex expressed itself in favor of both forks.
- Against the background of pessimistic and low interest of investors in cryptocurrencies, news noise around ВСН triggered positions closing instead of growth.
- Only on the eve of this fork, the price has increased a bit, but had never won its week’s losses.
What should investors do?
A cryptocurrency society likes impulsive news, creating some intrigue and burning a fire in their bellies. Analysts believe that, in general, the fork is an advantageous condition that improves a blockchain technology. At the beginning, stock houses will support both altcoins, providing investors with the objective data and identifying the division implications. The impact can be assessed only after both protocol variants demonstrate their stability. However, experience has proven that coins become less valuable immediately after the fork. Investors are recommended to stick to the basic branch of Bitcoin ABC, which will hardly yield its current 4th position. Whether Satoshi Vision can sooner or later be listed among TOP 10? Only time will tell! But, there is no sense to rely on a token in the short run.