The future belongs to Cryptocurrency. Even the fork couldn’t change that.

On August first, a supposed wonder happened. Suddenly many bitcoin users had not simply bitcoin on their account but additionally bitcoin cash without any influence in that matter. Somebody who had two bitcoins was now the owner of two bitcoins and two bitcoin cash. Although bitcoin cash was and still is less worthy than the classic bitcoin it’s nevertheless a wondrous increase of the currency. But with bitcoin cash many questions appeared.

What does bitcoin cash mean for bitcoin? Could bitcoin cash get dangerous for bitcoin? How is going to be the future or cryptocurrency? Could such a fork – a separation of the Bitcoin Blockchain – happen again and again?

But first things first.

Bitcoin cash will disappear

With Bitcoin – and its basic technology the Blockchain – not just information but also values can be transported through the internet. Bitcoin has become the most important cryptocurrency. Today it is internet currency, investment object and in Japan even legal tender.

The success brought problems. Bitcoins have been used so intensively that bitcoin transactions slowed down rapidly. The developers have been arguing about the question how to accelerate transaction speed until the fork – when Bitcoin cash split off from bitcoin.

At first bitcoin representatives want to improve the technical codes, then increase the blocks of the blockchain from one to two megabytes and use compression within the blocks. The bitcoin cash representatives want to skip the technical improvement post and enlarge the blocks directly from one to eight megabytes. In my opinion it is a question of faith, which is better. It is not answered by institutions – such as banks or central banks – but by those who trade and produce („mine“) Bitcoin or Bitcoin Cash.

Obviously, the majority of them prefer Bitcoin. Its value has climbed to an all-time high after the introduction of Bitcoin Cash. I guess it’s going to keep going. On the other hand, the value of bitcoin cash has so far been volatile. It may increase in the medium-term. However, Bitcoin Cash does not have an ecosystem, does not have a stock exchange, no acceptance points and only a few supporters in the community. Therefore, Bitcoin Cash is a pure speculative object and from my personal perspective will extinct in the long term – like many other cryptocurrencies before and after.

Does Bitcoin kill the euro?

Cryptocurrencies that survive will gain in importance. I believe it is possible that the most successful one day will function as the world’s reserve currency. With that said, this currency would be more important in the future than the euro. Bitcoin could become this currency, but has strong competitors: In June, Ethereum was close to overtaking Bitcoin. Much can still happen, and even if I am optimistic about the prospects of cryptoanalysis, I would not recommend it as an investment for the masses. They are highly speculative.

And before one of them becomes a reserve currency, some aspects have to be taken into account: e.g. security (protection against hacker attacks) and energy consumption (bitcoin mining consumes an enormous amount of electricity). Forks, however, do not endanger the future of cryptocurrencies. Even if, of course, they can occur again and again, they are neither a cause for concern nor a miracle.

The Euro on the other hand will experience a wonder all for itself in the not so distant future.

English translation of the article published on KPMG Klardenker.

Link: https://klardenker.kpmg.de/verstehen/aktuell/das-bitcoin-wunder/

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