Fifth Most Popular Scam
Main page Opinion

A small size UK exchange Crypto Facilities is launching the Bitcoin Cash futures and everything is taking place under the watchful eye of the local Financial Conduct Authority (FCA), so it looks rather legal. It’s interesting how the modern-day financial instruments operate. Bitcoin Cash (Bitcoin.Cash) , despite being one of the top-5 cryptocurrencies - is, well, a scam - which isn’t preventing its creators from living a dream and it’s investors form earning.

The year 2017 was distinguished by the rampaging variability of the cryptocurrency market. This Variability was expressed in the constant emergence of new payment instruments based on the blockchain technology, and the rampage - due to the splitting of the communities of existing currencies. Bitcoin began to disperse into sub-versions: Bitcoin Gold, Bitcoin Unlimited, Bitcoin Private and others. But, the most notable was Bitcoin Cash, a cryptocurrency, born in the midst of a battle regarding the sizes of the network’s block.

There are constant disputes among the community of developers over how bitcoin should developed. What technology should be implemented, what sort of reward should miners receive and so on. One of the stumbling blocks was just the size of the block on the network. A block is part of the blockchain where the transactions are being recorded and network bandwidth depends on the size of the block. Given that the speed in the network bitcoin is not great - those against the increases of the block sizes, figuring it would help the network, declared independence from the main team, declared themselves to be following the “real” bitcoin and called it bitcoin cash.

Blockchain is a set of rules, compliance with these rules allows you to synchronize the network and confirm the correct transactions. If one of the nodes does not comply with these rules, it does not participate in the network. If the nodes that decide to live by the new norms becomes significant - the network is duplicated. The old one continues to exist in accordance with the old rules, and the younger one adopts a new doctrine. There are two branches - they are called forks. In this case, the new fork, also stores the history of transactions conducted by its predecessor. So that’s what happened with bitcoin cash. As a result of the war and division of the ‘territory’, the owners of the "ordinary" bitcoin suddenly received a "gift" - a copy of their savings, but under a different name and off course of a different value.

One of the instigators of this whole story was the extravagant entrepreneur Roger Ver. He was in jail for selling explosives on ebay, bought a popular passport of St. Kitts and Nevis, went to Japan, invested in a variety of crypto projects and was generally an early adopter of cryptocurrencies. Being an active person, it was easy for him to pull a hefty chunk of the miners over, persuading them to change the size of the block. Among this company, was a no less extravagant co-owner of the largest Chinese cryptocurrency holding company Bitmain - Jihan Wu. So bitcoin cash almost completely ended up in the in the ‘hands’ of Bitmain.

Returning to the autumn of 2017, to the market with a wild number of cryptocurrencies, a rather bizarre situation was observe: the assets of bitcoin owners, thanks to all the forks, began to increase: if you had one bitcoin, then after division, you have not only one bitcoin, but 1 bitcoin gold, 1 bitcoin cash and so on. This amazing scheme forced many services to start accepting new cryptocurrencies based the usual bitcoin. It’s because of the pressure from users that suddenly became owners a tiny - BCH rate was three times less than BTC - but nevertheless a fortune, bitcoin cash managed to obtain listing on such giants like Coinbase. For some time the exchange did everything it could to avoid listing the cryptocurrency, but a prospect of losing out on profit made the difference: BCH, took its place next to other popular cryptocurrencies: ether, litecoin and it’s big brother - bitcoin. As a result, bitcoin cash entered the top-5 of the crypto world, both in terms of value and its trading volume.

Unlike bitcoin, which is still a distributed currency, main bitcoin cash nodes are over on Bitmain’s servers. A couple of months ago, Antpool - a mining pool controlled by this company, decided to ‘burn’ coins, by sending them to an address a key for which was allegedly destroyed. Naturally Bitmain was accused of PR, market manipulation and artificial overclocking. Neither did this help nor has it hurt anyone - it was traded and so it shall be. Another idea is to make bitcoin cash available for conducting an ICO. But who needs to conduct ICO on this currency, when the alternatives are in abundance and they also have their faults.

Bitcoin Cash is backed by coins that were formed as a result of the fork. The volume of trading, isn’t large and mostly speculative, pitting it against the U.S. dollar. Prospects that this currency becoming anything in the future is low - except only turning out to being an official Bitmain coin.

But given that the latter got bruised and burned, for indicating their assets in BCH in the prospectus of it’s upcoming IPO - even this isn’t a certainty. The is no such thing as too big to fall - the bigger, the louder the fall will be. Want to speculate? - be my guest, but do keep this in mind bitcoin cash is a fraud.

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