Is Bitcoin Cash (BCH) A Good Investment?

Bitcoin Cash is the most popular Bitcoin fork on the planet. While other Bitcoin clones are not doing very well in terms of attracting community interest, BCH actually has some hardcore supporters on their side. Not only that, but Bitmain (one of the most well-known ASIC manufacturers) is also one of the main forces that support Bitcoin Cash hash power.

While BCH has been relatively stable in the top cryptocurrency ladder, it remains to be seen whether BCH is still a good long-term investment or not. Let’s try to analyze BCH together and its future. Before we continue, you might want to check the basic explanation of Bitcoin Cash. Check it here.

The Basic Idea Of Bitcoin Cash

To understand Bitcoin Cash, it’s very important to learn about its history. Unlike many altcoins, Bitcoin Cash was a direct fork of Bitcoin Core (BTC). Back in 2017, Bitcoin’s popularity kept on growing. As a result, Bitcoin transaction fees became very expensive, and its transaction speed became very slow. Some transactions could take hours just to get one single confirmation. In other words, the blockchain became clogged.

And because of this reason, some well-known Bitcoin supporters like Roger Ver (Bitcoin.com) and Jihan Wu (Bitmain) decided to propose fundamental changes to Bitcoin blockchain. They believe Bitcoin should adopt a much larger transaction limit block size (from 1MB to 8 MB at the time). The ongoing debates between the anti-change group and pro-change group forced the pro-change camp to hard fork Bitcoin and create their own version which is called Bitcoin Cash (BCH).

The basics of Bitcoin Cash works exactly the same as Bitcoin Core. It utilizes Proof-of-Work (PoW) consensus algorithm, it does not have smart contract functionality, and it even shares the same legacy address. All second layer solutions that are being developed for Bitcoin Core also work for Bitcoin Cash.

The difference is just that Bitcoin Cash supporters are much more open to changes. Right now BCH upper size block limit has been expanded again to 32 MB. Compared to Bitcoin Core, Bitcoin Cash has much faster transaction speed and much lower transaction fees. The idealism here is that Bitcoin Cash must work as good as real-life cash. It is not meant to be used as “digital gold” like the main narrative of the original Bitcoin in recent years.

So, Is Bitcoin Cash A Good Investment?

Well, this is the tricky part. The name “Bitcoin Cash” still borrows the name of Bitcoin. Just like all the clones out there, unfortunately, Bitcoin Cash would never be more popular than the original Bitcoin - at least not in the foreseeable future.

While Bitcoin Cash successfully surpassed every other Bitcoin-something altcoin out there, it remains in the shadow of Bitcoin Core, Ethereum, Tether, and XRP. For it to be able to surpass all these big names, BCH needs to do something other than simple partnerships and marketing strategies that tell people Bitcoin Cash is the real Bitcoin. 

Yes, Bitcoin Cash is fast and has cheaper fees than Bitcoin, but there are also plenty of other altcoins that are faster and cheaper. Bitcoin Cash does not have any unique characteristics. Because of this reason, it’s hard to see how BCH can eventually surpass BTC and ETH.ConclusionBCH is not a bad investment. As long as BTC remains the top dog of cryptocurrencies, I believe BCH will still be relevant. Why? Because BCH’s popularity is pegged to BTC’s name.

However, for the same reason, I also think BCH would never be able to overcome its biggest obstacle. As a “Bitcoin-something” altcoin, it’s very hard to change people’s narratives about it being a Bitcoin Core’s clone.

I still believe BCH is a decent investment for the long-term, but it’s just not good enough.If you are very interested to learn more about BCH, I suggest you read this article.