The Future Of Bitcoin Cash: Is It Worth Investing?

Bitcoin Cash (BCH) is a cryptocurrency that was created in 2017 as a hard fork of Bitcoin. It is a decentralised payment system that allows users to make transactions without the need for a third-party intermediary.

Bitcoin Cash has a number of advantages over Bitcoin, including cheaper transaction fees and faster transfer times. However, it has not achieved the same level of popularity as Bitcoin and has faced criticism for its lack of distinctiveness.

Investing in Bitcoin Cash can be a good way to diversify your portfolio, but it is important to do your research and understand the risks involved before investing in any cryptocurrency.

How to invest in Bitcoin Cash

Investing in Bitcoin Cash is a pretty simple task. Here's a step-by-step guide:

Step 1: Sign up with an exchange

First, you need to sign up online with an exchange that will allow you to buy and invest in Bitcoin Cash. An exchange broker is an online platform that enables you to buy and sell Bitcoin Cash, as well as other cryptocurrencies. Examples of popular exchange platforms include Binance, Coinbase, and StormGain.

Step 2: Create an account

After choosing an exchange platform, create an account, and make a deposit. You may be required to provide personal identification information, such as a driver's license or Social Security card. The process is similar to setting up a typical brokerage account.

Step 3: Connect a payment option

At most exchanges, you can connect your bank account directly or link it to a debit or credit card. Although credit cards can be used to purchase cryptocurrency, it's important to consider the associated processing fees and interest charges.

Step 4: Place an order

Once your payment method is connected, you can place an order for Bitcoin Cash on the exchange platform. Cryptocurrency exchanges offer various order types, including market and limit orders, and some also support stop-loss orders.

Step 5: Store your Bitcoin Cash

After purchasing Bitcoin Cash, it's important to store it securely. You can either use an exchange wallet provided by the platform or set up your own digital wallet. Exchange wallets are convenient but are not recommended for long-term or large cryptocurrency holdings due to security concerns.

Digital wallets can be hot wallets or cold wallets. Hot wallets are online wallets, such as apps on your phone or computer, that are convenient for small amounts of cryptocurrency or active trading. However, they are more susceptible to theft and require strong security measures. Cold wallets, on the other hand, are offline wallets, such as hardware wallets, that provide greater security by keeping your private keys offline.

Important considerations:

Before investing in Bitcoin Cash or any cryptocurrency, it's crucial to understand the risks involved. Cryptocurrencies are highly volatile and speculative, and their values can fluctuate significantly. Additionally, it's important to do your research, understand the technology and the market, and invest only what you can afford to lose.

Is it safe to invest in Bitcoin Cash?

Like any investment, Bitcoin Cash is not risk-free. It is a particularly risky investment with more volatility than traditional investments of stocks, bonds and funds.

Volatility

Bitcoin Cash (BCH) is one of many Bitcoin offshoots that emerged in recent years, and it is by far the most successful. However, it is still susceptible to market changes like most other altcoins. In 2022, the price of BTC dropped from almost $48,000 to lows of around $16,000.

Criminal Fraud

A Federal Trade Commission report from June 2022 found that more than 46,000 Americans reported losing over $1 billion to cryptocurrency fraud in the period from January 2021 to March 2022.

Scams

When Bitcoin gains in value, so does the number of scams targeting investors. The Federal Trade Commission reported in May 2021 that over a recent six-month stretch, nearly 7,000 people lost $80 million to Bitcoin schemes touting quick returns.

Exchange Crashes

If you're keeping your crypto with the same exchange where you bought it, it's worth considering that crypto exchanges have failed before. For example, in 2014, Mt. Gox crashed and filed for bankruptcy. It's been over eight years, and affected users have yet to receive a payout.

Wallet Access

If you want to avoid losing your assets on an exchange, transfer them to a separate crypto wallet. Specifically, consider a cold wallet, which is an offline storage device, rather than keeping the crypto stored on a hot wallet, which is online. However, cold wallets are not without risk. You'll have to keep your password and seed phrase safe so you can access your funds. And you'll also need to keep the physical device holding your Bitcoin Cash safe.

Regulatory Risk

There is also regulatory risk. In 2021, China effectively made it illegal for citizens to mine or hold any cryptocurrency. If other countries follow suit, Bitcoin Cash holders could be in hot water.

While no investment is risk-free, investing in Bitcoin Cash might generate good returns in the coming years if you can withstand the ups and downs.

What are the benefits of investing in Bitcoin Cash?

Bitcoin Cash (BCH) was created in 2017 as a "hard fork" of the Bitcoin blockchain. This means that Bitcoin Cash launched as a separate cryptocurrency, with its own blockchain, but shared a common history with Bitcoin up until the point of the fork.

Decentralisation

Bitcoin Cash, like Bitcoin, is decentralised. This means that it eliminates the need for central banks and takes monetary supply out of the hands of authorities. With nodes spread globally, Bitcoin Cash is also immune to political attacks.

Scalability

Bitcoin Cash has larger blocks than Bitcoin, which means it can process more transactions per second. This makes it more scalable, allowing more people to execute transactions and payments simultaneously. As of November 2020, Bitcoin Cash has a block size of 32 MB, compared to Bitcoin's 1 MB.

Efficiency

Bitcoin Cash's larger blocks also make it highly efficient. It can record more transactions in each block, and make payments faster and at lower costs compared to Bitcoin.

Low Transaction Costs

The increased scalability of Bitcoin Cash means that validation times and transaction fees are lower. According to BitInfoCharts, the average transaction fee for Bitcoin Cash is $0.008306, while the average transaction fee for Bitcoin is $1.79.

Accessibility

Bitcoin Cash is one of the more popular cryptocurrencies and can be purchased through most major exchanges. Its native currency, BCH, is also easy to acquire and is listed on top exchanges like eToro, which drives mass adoption and enhances its investment potential.

While there are benefits to investing in Bitcoin Cash, it's important to also consider the risks and drawbacks, such as low adoption rates, branding issues, and weaker security compared to Bitcoin.

How does it compare to investing in Bitcoin?

Bitcoin Cash (BCH) was created in 2017 as a result of a "hard fork" in the Bitcoin blockchain. This fork was due to a philosophical difference within the Bitcoin community, with some developers seeing Bitcoin as more of a store of value, while others wanted to encourage its use as a medium of exchange.

Bitcoin Cash has cheaper transfer fees (around $0.20 per transaction) compared to Bitcoin (around $1 per transaction). It also has faster transfer times and can handle more transactions per second, making it more scalable than Bitcoin. However, it has a lower rate of adoption than Bitcoin, and its security has been questioned due to the lower number of miners.

In terms of market capitalization, Bitcoin Cash is much smaller than Bitcoin. As of 2023, Bitcoin Cash had a market cap of around $7.1 billion, while Bitcoin's market cap was $881 billion.

When deciding whether to invest in Bitcoin or Bitcoin Cash, it is important to consider your investment goals. If you are looking for a long-term investment, Bitcoin may be a safer option, as it has a longer track record and is the most popular cryptocurrency. On the other hand, if you are looking for a cryptocurrency to use for transactions, Bitcoin Cash could be a better choice due to its lower fees and faster transaction times.

It is also worth noting that Bitcoin Cash has received some negative attention as a "copycat" currency, and its similar name to Bitcoin may cause confusion for new investors. Additionally, the lower adoption rate and market penetration of Bitcoin Cash have resulted in lower investor confidence compared to Bitcoin.

Ultimately, both Bitcoin and Bitcoin Cash have their advantages and disadvantages, and it is important to do your own research and consult a financial advisor before making any investment decisions.

Where can I invest in Bitcoin Cash?

There are several ways to invest in Bitcoin Cash. You can buy it from a bitcoin exchange or online broker, directly from another individual, or from a Bitcoin ATM.

Coin ATM Radar lists about 50 bitcoin ATMs in London, many of them in convenience stores. These usually take cash from your bank card, although some only accept banknotes. The ATM will then send your digital currency to your wallet, which could be a smartphone app, or to your email address. Some ATMs can also print "paper wallets" that you can scan later.

If you buy a digital currency from an exchange, it may offer you an online wallet, but your money is at risk unless you have the keys.

There are dozens of different wallets for different purposes, with "hot" wallets on smartphones and "cold storage" wallets held offline on paper, on hardware devices (cards, thumb drives, etc.) or on separate PCs.

If you are investing in Bitcoin Cash, it is important to do your research thoroughly.

Bitcoin Cash Wallets

• Bitcoin Core (aka Bitcoin QT) – warning: installing Cash on the same machine as Core is dangerous. Using default installation options, Cash will overwrite and corrupt Bitcoin Core data.
• Electrum – while the latest version of Electrum, 2.9, is capable of distinguishing between competing chains, Electrum does not officially support Bitcoin Cash.
• Exodus – the combined wallet and exchange service will not support Bitcoin Cash, either through splitting or providing a market.
• Trezor – the popular hardware wallet will support Bitcoin Cash. Trezor’s web interface will feature a tool for safely splitting your coins.
• Ledger – the popular hardware wallet will also support Bitcoin Cash. Their Chrome wallet interface will also feature a split utility and a selector for both chains.
• Jaxx – since Jaxx users are always in control of their private keys, corresponding Bitcoin Cash (BCH) will be safe in your Jaxx wallet.
• Blockchain – if you have a Blockchain wallet, it is essential that you retain your wallet and corresponding recovery phrase and not delete them, even if you empty the BTC balance.
• KeepKey – plans to support all forks of bitcoin as unique currencies and will allow you to swap between them with ShapeShift.

Bitcoin Cash Exchanges

• HitBTC – a European exchange that has been operational since 2013.
• ViaBTC – currently the only available market for daily chart of Bitcoin Cash futures price.
• Bittrex

Other Ways to Invest in Bitcoin

Aside from investing directly in Bitcoin Cash, there are other ways to invest in Bitcoin.

You could mine your own bitcoins. Bitcoin mining becomes more difficult the more miners there are. Today, you need specialised hardware, and you need to join a "mining pool" where large numbers of miners work together and share the results.

You could also buy shares in a fund that has invested in bitcoins. However, please note that this article is not a recommendation, and you should always do your own research and consult a financial professional before investing.

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