Bitcoin Cash’s (BCH) Eight Lane Highway is Empty, Hard Forks to 32 Lane
Bitcoin Cash (BCH) is hard forked to a 32MB block size on May 15 despite having 99 percent of block size unutilized. Liquidity issues have seen the cryptocurrency, delisted from two crypto exchanges in recent months.
Does BCH Really Need 32MB Blocks?
One of the most significant challenges that Bitcoin Cash faces have to do with the fact that it is not being used as much as its backers claim. BCH’s cash block, which is a measure of the bundles of transactions processed isn’t as big, as many would have expected.
BCH is utilizing on average about 1/160th of its 8MB block size. What this means is that only 50kb of the block size is currently being used, underscoring the reduced number of transactions being carried using the coin.
BCH block size. Source: BitInfoCharts
Block Size Increase Deficiency
Despite the low transaction volumes, Bitcoin Cash developer team implemented a fourfold increase in the altcoin’s block size. The block size is being increased to 32MB even though the current 8MB is not being used to capacity. In contrast, bitcoin, which is the most popular cryptocurrency, has a maximum block size of 1MB.
Bitcoin Cash is essentially providing a solution to a problem it does not have as it moves to increase the block size. Such a move would only have made sense if the cryptocurrency was eliciting strong demand in terms of transactions.
The insistence of block size increase, despite a lack of demand, underscores how the developer’s team is out of touch with sentiments on the ground. The proposed expansion has already elicited backlash with Chief Strategy officer at Blockstream Samson Mow summing up what the increase amounts to in a tweet.
Low Transactions, Low Liquidity, and Delistings
Bitcoin cash transactions are a shadow of daily transactions carried on Dogecoin (DOGE), a cryptocurrency that came into being as a joke. Reduced number of transactions carried on the token has essentially led to liquidity problems for some cryptocurrency exchanges.
DOGE > BCH? Source: BitInfoCharts
In March 2018, OKEx, one of the largest cryptocurrencies exchanges, ended support for Bitcoin Cash citing inadequate liquidity.
BCH sentiments have yet again suffered another blow after the Netherlands’ largest cryptocurrency exchange, BL3P, ended support for the altcoin. The exchange has been planning to stop support for quite some time but decided to move forward ahead of the May 15 hard fork.
“Since there already was a planning for the removal of Bitcash the hard fork has become a reason and strict deadline for the removal of Bitcash from BL3P. BL3P maintains a strict selection policy when it comes to support for altcoins, Bitcash, unfortunately, does not meet these requirements”, the blog post reads.