BTC Up On This News?
The bitcoin price has notably moved up today - the current value is around $2800.
It is hard to say exactly why it has increased but one contributory factor may be that 2 major exchanges, Coinbase (GDAX exchange) and Bitstamp, have come out against Bitcoin Cash (BCC).
BCC is the hard fork that ViaBTC (a mining pool and exchange) are planning on August the 1st. The release of the news about BCC a few days ago caused a mini crash in the bitcoin just as the price seemed to be recovering on the locking in of BIP 91.
According to the Bitstamp statement on their website:
"In the event of a User Activated Hard Fork (UAHF) on 1 August or thereafter, it is important to clarify that Bitstamp would not be in a position to support Bitcoin Cash (BCC), the coin associated with the Bitcoin Cash proposal. In Bitstamp’s view, BCC is an alt-coin and the decision to list BCC tokens remains at our sole discretion at all times.
If Bitstamp chooses to list BCC, we would decide at our own discretion on what course of action to take with balances deriving from the hard fork. BCC would also be subject to the same due diligence processes as for any other alt-coin, which requires time and careful planning. For this reason, Bitstamp is not in a position to support BCC, nor will Bitstamp be liable for any BCC sent to Bitstamp."
According to the email from Coinbase:
"In the event of two separate blockchains after August 1, 2017 we will only support one version. We have no plans to support the Bitcoin Cash fork. We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value.
This means if there are two separate digital currencies – bitcoin (BTC) and bitcoin cash (BCC) – customers with Bitcoin stored on Coinbase will only have access to the current version of bitcoin we support (BTC). Customers will not have access to, or be able to withdraw, bitcoin cash (BCC)."
So far most of the other exchanges have not actually talked specifically about BCC and have only put out statements saying that they will disable deposits and withdrawals of Bitcoin to protect their customers.
My Thoughts
The Kind Interpretation
If we interpret the motives of the creators in a positive light we might say that it is a bluff that is designed to create further impetus for an actual block size increase.
Although, Segwit will almost certainly activate in the next few weeks, there is doubt to how much scaling room it will create.
What is truly needed is an increase in bitcoin block size - this is the 2x part of Segwit 2x and will come in the form of a hardfork in mid November.
A kind interpretation of BCC may therefore be that it is an opening salvo in trying to put psychological pressure on those who might resist larger blocks, i.e. to see the 2MB block size of Segwit 2x as a compromise.
(BCC goes straight to an 8MB block size).
People may more readily accept 2MB blocks in November to avoid the risk of other splits.
The More Cynical Point of View
I am more cynical though. I see BCC as a ploy to make money when the market is in a vulnerable position.
This is confirmed by the way that ViaBTC is trading Bitcoin Cash futures.
I also reject the idea that BCC will be free money for holders of Bitcoin.
Any value that it has will come it's association with Bitcoin (even though I agree with the sentiment that it is little more than another altcoin which just happens to have the same transaction history as bitcoin).
Further there is a strong possibility that BCC will have a much shorter life than the average altcoin. - For one thing it will be much less secure than Bitcoin and a 51% attack on the network is a real possibility.
Secondly we already have a whole host of altcoins that can actually scale, have real world proven value and in many cases have superior technology.
Seen as an altcoin BCC is just not a serious contender. So in my opinion BCC will not last very long.
Free Money?
When BCC does collapse it will leave those naive investors who bought it thinking it had a future, holding an asset that has little or no value.
Indeed there is a strong possibility that it will be worthless as mining for it could completely collapse.
These people will ultimately pay the price for ViaBTC's money making scheme.
Those who think that the split will be giving them free money should take this into consideration. We already have a reputation for scams and this will play into that.
For this reason I have no plans to split my BTC off for free BCC.
That may be a poor financial decision but I would rather not contribute to people being scammed and that is essentially how I see it.
At some point we need to consider what is best for the community as a whole rather than just our own pockets.
I think it is, to some degree, the selfish mercenary attitude of parties like those involved with BCC that has held back greater cryptocurrency adoption and the more it continues, the longer we will hold ourselves back from going mainstream.
As always I may be completely wrong and BCC may become the next Litecoin. What do you think?
Thank you for reading
