Story 1 – Bitcoin Network Fees
Exodus wallet displays a warning to it’s users not to use the Bitcoin network due to high fees.
Gemini shuts down BTC transfers due to transaction backlog.
What doesn’t make sense to me is that there are a load of complaints about the Bitcoin transaction backlog, yet the adoption of Segwit still lingers below 15%.
That’s not to say that the people complaining aren’t using Segwit, but I would think people who are really annoying by the network capacity limits would be more likely to just use the Bitcoin Cash network.
In fact Bitcoin Cash block number 504017 was full to the brim, a full 8 MB block.
Then if we refer to fork.lol and look at number of transactions, there’s this huge spike in transactions on the Bitcoin Cash network and a gradual decline on the Bitcoin network.
Maybe not a coincidence.
Now before you go projecting your own perceptions onto me, I am pointing out objective facts here.
This is how the free market is supposed to work. Craig Wright said in no uncertain terms what him and his team intended to do.
He said they are going to fork off Bitcoin Cash and then compete to be the superior product and then let the users decide which network they voluntarily want to use.
The free market rewards good service and punishes bad service.
What’s complicated about all this is that Bitcoin provides lots of different services.
The main service it provides right now is the best store of value in the world. From that perspective Bitcoin Cash can’t compete.
But if the service you want is to take some fiat currency and then send is across the world quickly and cheaply, i.e. use Bitcoin as a payment network, then right now Bitcoin simply can’t compete with Bitcoin Cash.
What prevents Bitcoin Cash from reaching it’s full potential as a payment network is the lack of adoption. The whole ecosystem is setup to support Bitcoin and only a small portion of it supports Bitcoin Cash.
That point about a coin reaching it’s full potential due to lack of adoption. I have to be fair and say that’s not exclusive to Bitcoin Cash, it applies to almost all altcoins that aren’t Bitcoin or Ethereum.
Bitcoin and Ethereum are the two most widely supported coins, and because of that they are very very hard to unseat from the throne.
It seems that people will put up with high fees and a big backlog because it doesn’t last very long, and we have short memories.
However, every time this happens, I think a few people leak out and try something like Bitcoin Cash, LiteCoin or Dash and then choose not to come back.
So it’s not as if there aren’t consequences to failing to keep up with demand.
And we saw yesterday how the market reacted to Dash increasing its network capacity to 2 MB and at the same time massively reducing fees.
Dash mooned from $340 to $493.
Some people say the 2 MB block thing was Dash doing a PR stunt.
The announcement may have been strategic but I’d already covered the new Dash roadmap months ago which included this block size increase.
I think what they did was OK. There’s a difference between actively spreading propaganda, censoring opinions you don’t like and then being strategic about when you announce certain news.
Even I have to select topics that are, er, topical in order to get people’s attention. It’s self evident that covering stories that don’t get people’s attention is suicide.
What I really want to do right now is even out the number of coins I have in BTC and BCH.
By that I mean I want to buy a number of Bitcoin Cash coins so I have the same number as I have Bitcoins so I have a hedge against the possibility that large numbers of users do migrate to Bitcoin Cash.
Remember that at round 7 pm tonight Bitcoin Cash is installing it’s latest network upgrades to fix the mining difficulty problem and if that goes well we may see another pump in the price.
Story 2 – Bitcoin Gold network launches main network
I mentioned this on the weekly livestream yesterday and here is the official announcement from the Bitcoin Gold blog.
They have a link here to download the Bitcoin Gold client which means technically you could download that, input your Bitcoin private key and then access your Bitcoin Gold.
I am not taking that approach, nor do I recommend it.
I plan to wait for the announcement some time today from Ledger as they promised in this post:
Where they say as long as the BTG launch goes according to plan, they will offer support for Bitcoin Gold the next day, which is today.
So stay tuned for that.