In this week’s edition, we take you through a tour of the contentious fight between bitcoin and Bitcoin Cash, give you our predictions of who we think might win in the long run, and give you a few examples of why investing in cryptocurrency can be a lot like gambling – except far less predictable or even fair.

Bitcoin Price Tumbles Significantly for the First Time This Year

For the first time in the history of the Coin Clarity Weekly Roundup, the price of BTC dropped significantly over the last week, climbing to nearly $8000 before dipping below $6000 just a few days later. 2017 certainly has been a wild ride for bitcoin, with last week being no exception. Whether or not bitcoin will live up to the many extraordinary Wall Street predictions that put the price of BTC at or above $8000 by year’s end remains to be seen, but if there is one thing to be learned by their very public and loud predictions, it is that they are usually in the name of self-serving interests, and we should all know better by now, seeing as how they single-handedly brought the world economy to its knees in 2008-09, before being bailed out by the U.S. Federal Reserve.

While many are quick to attribute bitcoin’s dramatic 7-day rise and fall to the Bitcoin Core team’s decision to indefinitely postpone the implementation of SegWit2x – which would have increased the bitcoin block size from 1 MB to 2 MB – as well as a number of investors switching their investments from bitcoin (BTC) to Bitcoin Cash (BCH) as a result of the decision, the main factor of the drop is likely due to a large amount of early investors doing a large amount “profit taking.” After all, bitcoin, being a tradeable commodity, is not immune from the same adage that is frequently applied by the Wizards of Wall Street to any stock or commodity that shoots up in value suddenly and without warning: “What goes up, must come down.”

Bitcoin Cash: World’s Biggest Altcoin Pump or Legitimate Version of Bitcoin?

If you are the type to follow cryptocurrency-related message boards and such, you’ve likely noticed a large degree of contention between those supporting Bitcoin Core, aka bitcoin (BTC), and those supporting Bitcoin Cash (BCH). Early adopter, eccentric millionaire, and self-proclaimed “Bitcoin Jesus” Roger Ver, used his control over the bitcoin.com domain to proclaim that “Bitcoin Cash is Bitcoin,” in a rather lengthy article that ironically details the many differences between the two. Because Ver is not a member of the Bitcoin Core team, his article has cause quite a bit of consternation and controversy among the pro-bitcoin crowd, who largely regard the move as somewhat subversive and counter-productive to the overall idea of bitcoin.

Regardless of whichever camp you may find yourself falling into, BCH reached a new high last week and overtook Ethereum (ETH) as the second largest altcoin by market cap, if only for a day or two. Vitalik Buterin, founder of Ethereum (whose coin had been in a formidable second place position for several months), even took time out of his busy schedule to publicly congratulate the Bitcoin Cash team on a job well done. BCH managed to leap 40% in the same time period that BTC fell roughly 20%, meaning that it is attracting some big time investors and is now a force to be reckoned with. Not everybody sees the rise of Bitcoin Cash as organic in nature, however, meaning that it could possibly be the result of market manipulation by only a handful of inside traders who are working together to coordinate its price movement.

Some proclaim the signal of BCH’s “hash power” exceeding that of BTC’s as symbolic of BCH’s official overtake of BTC as the real bitcoin; however, we here at Coin Clarity tend to disagree, since the trading symbol for bitcoin remains BTC and Bitcoin Cash remains BCH (or BCC, if you trade your Bitcoin Cash on Bittrex). Also, BCH hash power actually only exceeded that of BTC for 1 day, back on August 23rd, even though this latest, full-throttle pump by Ver and company put the two back at neck-and-neck levels on November 11th. Given the fact that the price of BCH has declined by nearly 40% in the last 4 hours (as of 11:00 AM, Nov. 12th, GMT), we doubt this is still the case, even if Bitcoin Cash remains significantly more profitable to mine than bitcoin.

Also in the News

  • Even if Bitcoin Core decided to reject the previously-promised implementation of 2 MB blocks, the developers at DASH have decided to move forward and implement them, even if the cryptocurrency does not currently process enough transactions to currently fill 1 MB blocks. The move is part of a larger attempt to make the coin easier to use by all, as well as to lower transaction fees, speed confirmation times and scale the network to be able to compete with the likes of not only bitcoin but Visa as well.
  • In a story that should strike fear into the hearts of all cryptocurrency users, an article released last week detailed the ways which the advancement of quantum computer technology could make bitcoin (or any altcoin) obsolete. Though quantum computing technology has a ways to go before it becomes a reality – let alone available to the public – the idea of a computer that can search through an infinite array of parallel universes for the correct answer to a mathematical problem (in this case, the reverse engineering of a bitcoin public key to reveal a private key) means that perhaps the day will come when cryptography will no longer be a means to secure any sort of data network, including that of bitcoin. No need to worry for the moment, however; it is estimated that it could take up to 40 years before quantum computers become a household item.
  • In another rather sour note of news, it was recently determined that Mark Karpeles, infamous CEO of the befallen MtGOX exchange (who had previously been accused of stealing hundreds of millions of dollars worth of bitcoin during the exchange’s collapse), could actually end up profiting close to a billion dollars during the exchange’s bankruptcy settlement, according to Japanese bankruptcy laws. On top of that, a team operating on Karpeles’ behalf is attempting to limit potential recovery claims by those effected by the 2013 bankruptcy to the price of bitcoin lost at the time of the collapse, instead of its current price (which, needless to say, is significantly greater). They have even set up their own website attempting to raise funds to support Karpeles’ legal defense, a move which has rightfully attracted sharp criticism from some of the biggest names in cryptocurrency. As the fight to make bitcoin a legitimate commodity rages on, the expression “all’s fair in love and war” certainly seems to hold true in this case.