For anyone holding Bitcoin the chances are that you now hold (or have sold) some Bitcoin Cash (BCH) , the new Crypto that came in to existence on 1st August as the result of a hard fork on the Bitcoin network.
Initially the price was around 0.25BTC due to a lack of supply on the open market and technical difficulties in people moving the new coin on the forked blockchain, however as supply has increased on exchanges the price has steadily dropped to 0.15BTC, then 0.1BTC and now around 0.067BTC!
Is Bitcoin Cash a failed experiment? Will it make it past it's second week? Will it eventually be worth nothing?
Hopefully I'll be able to shed a bit of light on the situation and all will be made a bit clearer.
Firstly the powerhouse of the blockchain are the miners. When Bitcoin Cash forked from Bitcoin the difficulty was the same for both networks, however soon after the difficulty for the BCH network reducted to 26% of the BTC network. This means that BCH is profitable to mine if the price is greater than 0.26BTC, so at the minute anyone mining BCH is doing so at a great loss and could earn much more money if they mined on the BTC network!
Eventually the difficulty will drop and mining will become profitable but whilst ever mining is not as profitable as on the BTC network expect BCH block times to be pretty erratic this will negatively impact the price of BCH.
In the short to medium term I expect the price of BCH to FALL. Eventually it could go very, very low. Let's say sub $50 per coin. The whole project will be written off as dead. Bitcoin Cash is dead. Where have we heard this before???
Then eventually as the difficulty matches the hash rate miners will start to join the network, it will be profitable to mine and the network will begin to stabilise. The price will start to climb again.
What will be the true value of BCH?
The answer has little to do with Bitcoin Cash but everything to do with Bitcoin. If Bitcoin manages to perfectly successfully scale with no problems then Bitcoin Cash is going to have rough ride ($50-$150) with only hardcore supporters holding, if Bitcoin somewhat manages to scale but it's all bit messy then BCH is going to do somewhat better ($200-$500). However, if the roadmap to Bitcoin scaling hits major problems then I fully expect BCH to begin to take large chunks of market from Bitcoin with a BCH price in excess of $1000. Note: that Bitcoin Cash already has a scaling solution implemented on the Bitcoin Network ready to go, something that BTC currently lacks.
Hope you enjoyed reading my first real post to Steemit, your comments are appreciated. - WetWipe
