Roger Ver Won The Debate, But Bitcoin Cash Lost The Argument
Fast transactions are no substitute for a secure, decentralized network
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At the recent Malta 2019 A.I and Blockchain Summit, Bitcoin Cash advocate Roger Ver argued confidently with Bitcoin-maximalist Tone Vays, espousing the advantages of Bitcoin Cash over Bitcoin.
It wasn’t the first encounter between the two personalities, as Crypto Briefing previously reported. Ver debated with confidence, and even Vays had to admit that he was outmatched. It was well-played by Ver, but his arguments don’t hold a lot of water upon closer examination.
It’s fast and cheap
Ver started off with the age-old argument for the superiority of Bitcoin Cash: it’s fast and cheap. To solidify the point, Ver wagered that Vays couldn’t successfully send a $5 BTC transaction with a one-cent fee. Vays promptly took him up on the offer.
“If that gets included in a block today,” Ver said, “I’ll donate ten thousand to a charity of your choice.”
It turns out the transaction was completed in time, taking 10 hours. Some in the BCH camp blamed its success on an “inside job” — claiming that miners went out of their way to verify the transaction. As far as we know, Vays has not yet told Ver to which charity he should send the $10,000.
While sending BTC with a one-cent fee is generally not recommended, it was proven to be possible. More realistically, one can expect to pay from a few cents up to a dollar for most BTC transactions to clear.
The bigger question is this: Why bother with Bitcoin Cash, if your primary goal is just fast and cheap transactions? There are many cryptocurrencies that are faster and cheaper. For a single Doge, you can send value just as quickly as any cheap transaction on the Bitcoin Cash blockchain.
In fact, Doge actually has more active addresses and frequently experiences higher transaction numbers than Bitcoin Cash. “Fast and cheap” is just not enough to make a blockchain superior.
“Nobody uses Bitcoin Cash”
Vays did rightly point out the lack of transactions on the Bitcoin Cash blockchain, although he exaggerated by saying “nobody uses Bitcoin Cash.”
It’s true that not a whole lot of people really do use the currency. At one point in time, Vays noted, a single wallet performed 60-80% of all Bitcoin Cash transactions. In the past month, a solitary wallet has been responsible for 50% of Bitcoin Cash transactions.
BTC Beats BCH- Especially In Developing World
The Bitcoin side missed out on another point, when Ver argued that BTC had little utility in developing countries.
Ver asked: “How does Bitcoin’s ‘store of value’ help people in the third world?”
While it’s debatable how much either BTC or BCH get used in the third world, it’s clear that if a citizen of Venezuela, Argentina, or Zimbabwe had been using BTC as a store of value over the past couple of years, they would have done a far better job of storing value than the sovereign currencies of those regions.
BTC and BCH have both seen drops from their early 2018 peaks, but that’s nothing compared to the Venezuelan Bolivar, which lost more than 95% of its value.
But between BTC and BCH, Bitcoin Cash has seen a considerably worse devaluation since its all-time high. In fact, Bitcoin is a better store of value, whether for Venezuelans or for crypto hodlers.
The Lightning Network and SegWit
Ver followed up by hammering Vays about the Lightning network. This was probably Ver’s best set of arguments. The Lightning Network is far from perfect, as Crypto Briefing has already noted; it’s hard to use and less secure than normal Bitcoin transactions.
But Lightning has grown tremendously in capacity and ease-of-use over the past couple years. Even with SegWit alone, Bitcoin has greatly improved its on-chain capabilities while lowering fees. And with only about 50 percent adoption SegWit has plenty of room for more adoption.
When Lightning does reach adoption it will make Bitcoin Cash seem painfully slow and expensive. It’s already easy and nearly free to send transactions of less than a cent in value, virtually instantly, with apps like Tippin.me proving the utility and simplicity of the second-layer payments network.
It’s quiet… too quiet
If you really want to make a fair comparison between BTC and BCH fees relative to network traffic, go back in time eight years.The current BCH network sees about the same amount of “action” as BTC did in 2011.
One can observe the veritable ghost town that is the BCH network by heading over to txstreet:
Now that’s not a lot of traffic. Especially compared to Bitcoin.
As Vays pointed out, BCH fees are actually higher than the fees on BTC would be, given the same amount of traffic. If Bitcoin Cash ever managed to get the same kinds of numbers (maybe from that one wallet?) it would be more expensive to send than Bitcoin.
Are we decentralized yet?
The key to the whole problem is one of centralization. The Bitcoin Cash network is dominated by just a few pools that can essentially dictate the history of its ledger, if they choose to do so. This happened just a couple weeks ago, when only two miners re-organized the blockchain after a theft incident following an unintentional hard fork.
Any blockchain that can be usurped by two major miners can not be counted on for “reliable transactions.” This is a key problem for Bitcoin Cash: bigger blocks have greater memory demands, reducing the number of participating nodes in the network to those who can handle the greater bandwidth and memory requirements.
Compare the diversity of BTC mining pools…
… to those of Bitcoin Cash:
Fast and cheap? Maybe.
Reliable? Not so much.
With hashing power concentrated into fewer hands and BTC 2011-era traffic, this is a network that does not warrant the same degree of trust and support as Bitcoin’s network.
While Ver was the better debater, his arguments fell short due to the limitations of the Bitcoin Cash network. It may be “fast and cheap”, but that is not enough to trump Bitcoin’s winning characteristics: popularity, utility, security and network integrity.