Bitcoin Cash (BCC) is launched. Who will push it onto the "dragon throne" of Bitcoin?

After August 1, some Bitcoin holders will find that their accounts have an additional 1:1 amount of BCC (Bitcoin Cash), with a price of about 4,000 yuan per coin, which is equivalent to a 20% increase in their Bitcoin investment. Of course, many large exchanges do not recognize BCC and refuse to provide BCC transactions. Bitcoin investors who open accounts in these exchanges do not have BCC.

BCC was originally a preparatory plan to deal with the risk of BIP148 fork. In the end, the Bitcoin fork alarm was lifted, but BCC was successfully "born". As a competing currency born with a specific background and a specific mission, what is the prospect of BCC? Is Bitcoin an ordinary competitor or a disruptor that can replace it?

When it comes to investment value, everyone naturally has their own opinions. The author is just talking about his own views to stimulate discussion. Everyone is welcome to leave a message to exchange ideas.

BCC stands for Bitcoin Cash. It is a new encrypted digital asset launched by the mining pool ViaBTC based on the Bitcoin ABC plan. It can be regarded as a fork coin or competing coin of Bitcoin BTC.

On July 17, ViaBTC released a statement on responding to Bitcoin UAHF, which clearly stated:

As a professional digital currency integrated platform, in order to better serve customers and protect users' assets, after careful consideration, we will continue to support the New York Consensus SegWit2x solution while also providing users with another option. We will make advance plans for the UAHF incident and name the new currency that may be generated by the implementation of UAHF as "Bitcoin Cash" (BCC for short).

Afterwards, ViaBTC made comprehensive deployment in terms of BCC mining pool, cloud mining contracts and exchange exchange. According to the arrangement, starting from July 22, users of the ViaBTC trading platform can exchange their BTC assets for BCC and BTC_FROZEN2, that is, 1 BTC can be exchanged for 1 BCC coin and 1 BTC_FROZEN2. BCC and BTC_FROZEN2 cannot be recharged or withdrawn. At the same time, users can also exchange the same amount of BCC and BTC_FROZEN2 back to BTC.

This means that BCC has a price since July 22. ViaBTC data shows that BCC experienced huge fluctuations that day, with the highest price reaching 5,999 yuan per coin and the lowest price falling to 200 yuan. After several days of fluctuations, as of 22:00 on August 2, the price fluctuated around 4,000 yuan.

Figure 1 BCC market chart (2-hour line, RMB)

From the perspective of Bitcoin blockchain upgrade, with the deployment of BIP91, the Bitcoin ABC plan is no longer necessary to implement, which means that there is no objective necessity for the birth of BCC. From the perspective of the market, BCC is suspected of splitting the Bitcoin community.

Facing the launch of BCC, different opinions soon emerged in the community. Coinbase, P-net, BitMEX and other exchanges clearly stated that they did not support BCC transactions, and the three major Indian exchanges also voted against it; on the contrary, mainstream exchanges in Japan actively embraced BCC. In addition to ViaBTC, several major domestic exchanges also issued announcements to support BCC transactions.

From the perspective of ordinary investors, the feelings are quite complicated. On the one hand, BCC is given away for free and they have to wait for it; on the other hand, they can’t help but worry about the diversion effect and potential impact of BCC on BTC resources, and whether it will erode the value of Bitcoin.

From the perspective of miners and developer teams, in addition to considering the fork effect, there are also considerations of interests behind the route dispute. The Bitcoin ABC plan is a typical large block plan in the Bitcoin expansion route dispute. This plan does not support segregated witness and directly resorts to block size expansion, which can increase the block capacity from 1M to 8M. In fact, it is more in line with the miners' idea of ​​Bitcoin upgrade.

As I mentioned in the article “Bitcoin price stabilizes, but the test has just begun…”, in the dispute between the developer team and the miners, the miners wanted to directly expand the block capacity, while the developer team wanted to indirectly expand the block capacity by deploying segregated witness. From the final result, the developer team gave up the negotiation and forced the deployment of BIP148 at the cost of blockchain fork, forcing the miners team to deploy BIP91 first to avoid the blockchain split on August 1.

For miners, the launch of BCC is nothing more than an extra gain after passive compromise. It can verify the practice of large-block blockchain through BCC blockchain, and also be a precaution for the Bitcoin 2M hard fork dispute three months later. If BCC and BTC can coexist peacefully, it means that blockchain forks are not that scary. At that time, miners may be more confident when facing the 2M hard fork dispute; at the same time, developers will also pay more attention to the interests of miners. After all, if miners no longer care about the fork issue, developers will be unable to "restrain" miners.

In summary, based on different interest mechanisms, different parties have different attitudes towards BCC. In fact, before arguing, we should first look at the prospects of BCC. After all, only valuable things are worth arguing about.

If BCC is ultimately just one of hundreds of altcoins, it will not be worth mentioning, and no matter what the attitudes of all parties are, it will have no real significance.

If BCC can really develop, the focus of all parties will be on its evolution direction. Will it become similar to ETC (Ethereum Classic) to ETH (Ethereum), or will it become the de facto new version of Bitcoin one day, constantly diluting the various resources focused on Bitcoin BTC, and eventually replacing BTC as one grows and the other shrinks?

The development prospects of encrypted digital assets depend on the consensus of value, which is generated by the breadth, depth and resilience of the ecosystem. It must be said that compared with other emerging digital assets, BCC stands on the shoulders of the giant BTC and has some natural advantages in building the ecosystem, as shown below:

First, relying on BTC's 1:1 issuance mechanism, BCC can easily attract a large number of investors.

Theoretically, after August 1, all BTC holders can get BCC at a 1:1 ratio. As BTC is the encrypted digital asset with the largest number of users, BCC will also easily become the encrypted digital asset with a large number of users. Of course, in practice, many exchanges do not support BCC, and Bitcoin investors who open accounts in these exchanges cannot get BCC. The initial number of BCC users will be much lower, but for a new product, it is also considerable.

Second, BCC has already received support from large mining pools and is likely to gain support from more miners.

As mentioned above, the Bitcoin ABC client that BCC relies on is a large block solution, which is more in line with the interests of miners. ViaBTC itself is a large mining pool, and its shareholder Bitmain is also a large mining pool. At the same time, Bitcoin is facing the risk of forking again within three months, which will objectively encourage more miners to support BCC, at least verbally. In extreme cases, if BTC implements de-POW under the promotion of the developer team, it is possible to push all miners to BCC.

The above two advantages have ensured that the development prospects of BCC are far better than those of ordinary altcoins. Those who predict that BCC will be worthless are expected to be slapped in the face. However, if BCC can replace BTC, it does not depend on BCC itself.

As the leading cryptocurrency, BTC has long been popular among the people. The crisis of BTC will not come from external competing coins but from within. To some extent, BCC is a product of the internal conflict of BTC.

In the future, if BTC continues to make mistakes and continues to divide and oppose, it will weaken itself, and the result will be that new currencies like BCC will be pushed to the throne.