Earlier this month, a vocal minority of cryptocurrency enthusiasts, investors, and developers split bitcoin’s blockchain, the digital record of the currency’s transaction history, into two, thereby establishing a separate currency. Called “bitcoin cash,” the new cryptocurrency initial met with market hesitation, as many digital currency trading sites outright refused to support trading until the new currency’s role and standing in the market became clear. Now just a few weeks out from its inception, bitcoin cash is already setting records, reminding investors of the original bitcoin’s meteoric rise.
After a sudden spike in interest from South Korean investors, bitcoin cash rose from sub-$400 value to nearly $1000, roughly a quarter of the value of its parent cryptocurrency. While its peak of $944.45 is significantly less than the original bitcoin, which approached the weekend at the $4000 mark, bitcoin cash’s rise is no less astounding, especially given its lackluster performance during the first two weeks following its premiere.
Bitcoin cash’s rapid success is mostly due to the currency actually delivering on its promises. The splitting of bitcoin into two currencies was largely in response to bitcoin’s severely limited transaction speed. While the original cryptocurrency could only manage transactions up to a single megabyte worth of data, bitcoin cash promised to raise this ceiling to eight megabytes.
Bitcoin cash’s climb began midweek after so-called “miners,” users who facilitate validation of cryptocurrency transactions in exchange for a small service fee, successfully mined a bitcoin cash block at the promised eight megabyte size. Despite being worth less when directly compared to bitcoin, bitcoin cash’s greater transaction speed allows investors to carry out more validations of the blockchain, thereby netting them a greater return on their time invested. Community-driven bitcoin valuation services are currently estimating bitcoin cash at 69 percent more lucrative to mine than its parent currency.
Bitcoin cash isn’t alone in its success. The original bitcoin set its own record recently by breaking the $4000 mark. It peaked at $4,479 and, despite a sharp decline, is still holding strong at roughly $4000. Cryptocurrency as a whole is experiencing a new period of global acceptance, with some digital asset traders speculating it could hit $10,000 before the year’s end. That said, some on Wall Street still derisively consider this surge of interest in cryptocurrencies to be nothing more than another ephemeral tech bubble. Future projections aside, bitcoin cash has clearly proven itself a faster and altogether viable alternative to the original bitcoin.