Bitcoin Cash Pulls Back as Developers Plan to Increase Block Size Again
Bitcoin cash (BCH) declined sharply on Wednesday, as the market pulled back from large gains earlier in the week. The decline occurred in lockstep with a broad correction for the original bitcoin, which briefly fell $2,000 after hitting new record highs.
BCH/USD Price Levels
Bitcoin cash was down more than 10% early Thursday before paring losses. At press time, the digital currency was trading around $1,380, or less than half of its all-time high.
BCH/USD trade volumes have exceeded $2.5 billion over the past 24 hours, with South Korea’s Bithumb accounting for more than a quarter of the daily turnover. Europe-based HitBTC saw roughly 10% of the daily traffic.
The broad decline in bitcoin cash came as prices failed to push across $1,700 earlier in the week, resulting in a downward correction. Prices have since moved sharply below a bullish trendline and are barely clinging on to a major support level around $1,450.
Bitcoin Cash to Increase Block Size
Developers at bitcoin cash have made plans to increase the digital currency’s block size in the new year. The initiative was announced in a year-long roadmap that appeared Tuesday on bitcoinabc.org.
“Our top priority for Bitcoin Cash is to keep improving it as a great form of money. We want to make it more reliable, more scalable, with low fees and ready for rapid growth,” the developer said. “It should “just work”, without complications or hassles. It should be ready for global adoption by mainstream users, and provide a solid foundation that businesses can rely on.”
BCH cash split from the original bitcoin back in August after a minority of the mining community backed a large block size increase. By increasing the block size, backers hope to make cryptocurrency more user-friendly for transaction purposes. Opponents of bitcoin cash argue that the new protocol could undermine the blockchain’s security.
Bitcoin ABC said a secondary goal of boosting block size is to improve features to allow for timestamping, representative tokens and more complex transactions.
BCH largely struggled out of the gate, with investors disavowing the cryptocurrency in favor of bitcoin and a small handful of altcoins. Sentiment quickly shifted earlier this month after the backers of the Segwit2x hard fork abandoned their mission. This triggered a huge spike for BCH at the expanse of the original bitcoin.
There is no evidence to suggest that the mining community will support Segwit2x in the near future. Though not technically dead, the new Segwit protocol’s implementation window has narrowed significantly. Like bitcoin cash, the 2X upgrade was intended to make bitcoin more relevant from a transactions perspective. Although bitcoin is widely expected by many merchants, it’s primary use is to store value.
To that point, the BTC/USD exchange rate spiked above $11,000 on Wednesday for the first time ever. Prices declined sharply later in the day, but were back above the $10,000 threshold by early morning Thursday.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.