Bitcoin is no doubt, one of the latest buzz word in the market nowadays. It has given rise to a lot of criticism due to the security and scalability issues.
Let’s take a look at this another cryptocurrency which has entered the crypto market and understands the basic facts about this new cryptocurrency Bitcoin Cash.
1. What is Bitcoin Cash BCH?
Bitcoin Cash is a cryptocurrency which is created from the hard fork (split) of bitcoin. In simple terms, a certain block of bitcoin is divided into two groups Bitcoin Cash and Bitcoin gold. The whole rationale behind this step is to promote faster transactions.
Low transaction fees and reduced confirmation time in Bitcoin cash technology have benefitted both the merchants and the users.
Bitcoin cash can be used for e-commerce, microtransactions, gaming and other online payments. As more and more exchanges are agreeing to take up Bitcoin cash, it will increase both the credibility and value of bitcoin cash.
Evolution of Bitcoin Cash
Bitcoin cash (BCH) is an upgraded version of the cryptocurrency Bitcoin and was released on August 1st, 2017. As bitcoin transactions were gaining popularity, network and block size issues lead to the creation of Bitcoin cash.
In Bitcoin, transactions are processed block by block and block size limit was only 1MB. However, transactions and process improved over the period of time.
In bitcoin cash, the block size is increased to 8MB. It allows miners to process more payments per second. Hence, bitcoin cash provides faster, cheaper and smoother user experience.
Bitcoin Cash vs Bitcoin:
- Bitcoin has a maximum limit of only 1 MB data per block. This limit is increased to 8 MB data per block in bitcoin cash.
- Bitcoin Cash process more transactions per second than the transactions of bitcoin. Bitcoin cash outperforms bitcoin in both speed and cost.
- However, Bitcoin is still the domination currency in the cryptocurrency market. There are allegations that bitcoin cash will not be able to take the place of bitcoin as many organizations have started accepting bitcoin.
- Bitcoin has more than 10,000 active nodes. This is one of the most important factors of decentralized currency. It means if a hacker wants to hijack bitcoin, it would be a challenging task. However, bitcoin cash has only 1200 nodes which are more prone to attack.
Benefits of using Bitcoin Cash
- Bitcoin cash promotes faster transactions. A user can make transaction in seconds and those transactions get confirmed in few minutes
- Lower transaction charges. Investors can be completed transactions by paying very fewer fees
- It provides simple and easy to use, hassles service.
- Stable framework
- It is based on blockchain which is currently considered secure technology
Bitcoin Cash Price Charts
The price movement for Bitcoin cash has been very volatile which makes it a very risky investment. Bitcoin Cash has made to the top 10 cryptocurrencies in the first few days of 2018.
On 22nd December 2017, the price of bitcoin cash declined by more than 42%. It resulted in huge loss to investors. Before this large price decline, it has almost increased by 144% and rose to $4300.
However, in the end of December 2017, most of the cryptocurrencies have dropped by 30%. Analysts have attributed this to the downward movement to the whole cryptocurrency market.It has become the 6th largest cryptocurrency in terms of market cap.
The performance graph of Bitcoin cash has shown an upward trend. But investors should be aware that the top 10 cryptocurrencies list is changing rapidly due to this cryptocurrency revolution.
The BCH price in INR is Rs. 173,108.59
|Circulating Supply||16,902,250 BCH|
|% Change (last 1 year)||458.82%|
Should I Invest in Bitcoin Cash?
Seeing the upward trend and the future technology, one can plan to invest in Bitcoin cash but it totally depends on the risk appetite of an investor.
Investors and users should be aware that there is a lot of risk in this digital currency as the prices can fluctuate at a very rapid level and they can easily lose out the complete value of their investment.
The legal status of cryptocurrencies varies from country to country and still undefined. Most of the instances have occurred when online crypto cash has been targeted by the hackers.
However, considering the volatile values of Bitcoin cash and the cryptocurrency market in its infancy, it can turn around into a very risky investment. Also, it is not a legal tender in India.
Bitcoin Cash: Risk
Most of the regulators across the world have warned investors dangers and risk associated with cryptocurrencies. They are unregulated, liquid and are more prone to price fluctuations at a rapid level.
Transactions settle or not is very probabilistic and cannot be reported to the regulators and hence, manipulation can occur in the market. Higher prices indicate it a lucrative market for the hackers who are constantly trying to attack investors.
Investors who are directly involved in exchange transactions i.e. using their own account are frequently targeted and prone to lose their capital.
Where Else Can I Invest?
If you want to channelize your hard-earned money and accumulate wealth with minimized risk, mutual funds can be considered as a safe investment.
Mutual funds are an indirect way of investing your money. If investors do not have time and expertise to invest in markets, mutual funds are ideal for your investment. They are managed by professional fund managers who have years of experience in capital markets and investments.
If you are interested in high-risk investments, you can look at small-cap funds.
Cryptocurrencies market appears to be fascinating to investors in terms of returns but it is at its peak according to economists. It can be a bubble which can burst at any moment, hence investors are advised to select right investment products for their capital such as mutual funds, etc.
Also, Finance Ministry of India has recently announced that virtual currencies are not the legal tender in India. It is a clear and precise statement from the ministry to protect the citizens from hazards of hacking.
According to Finance ministry – “Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes,”. Virtual currencies are stored in electronic form and are more vulnerable to cyber attacks and can result in loss of money. It is advisable to invest your hard-earned money in the right direction.
Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.