Bitcoin Cash (BCH) was created in August 2017, as a result of a hard fork of Bitcoin (BTC). A hard fork can be explained as changes to the protocol of the blockchain that allows or disallows previous invalid blocks/transactions. This creates a fork in the blockchain resulting in one path following the new, upgraded blockchain while the other continues along the old protocol. Bitcoin hard-forked into Bitcoin Cash for the primary reason of increasing the block size so that more transactions could be processed. This article discusses why BCH should be classified as a Fiat Currency.
What is a Fiat Currency?
A Fiat currency has no intrinsic value but is established thanks to government regulation. Fiat currencies depend on a central body such a government or a central bank’s monetary policy. Hence it is created from an authoritative order without much effort. New fiat currency can be introduced into the economy by purchasing financial assets or lending money to financial institutions. A central body has the powers to intervene and change the currency itself.
Authoritative in Nature
Bitcoin Cash is authoritative in nature. BCH has decision makers which operate as an elite group which decides the software used, features utilized and the use cases it will be implemented for. When comparing BCH to BTC, you will notice there are vast differences. BTC is completely decentralized up to the point of no central authority governing the decisions being made. BTC originated with Satoshi Nakamoto and has since prospered into being owned by no single entity but the BTC community.
No Special Qualities
Other than the fact that the block size is larger, BCH has no other special qualities about it. The only reason for its popularity was the airdrop that took place when the hard fork occurred due to the ledger in BCH having BTC’s history.
Most of Bitcoin’s hard forks are pretty much the same as Bitcoin cash – nothing special. Bitcoin currently has more than 44 different forks which have taken place. These include Bitcoin Gold, Bitcoin Private, Bitcoin Diamond and others. It is all quite centralized given that the founders all want to propel the airdrops thanks to the history shared with BTC.
The Need for Marketing
A decentralized cryptocurrency need not market themselves as trust is already inbuilt. Ever wondered why Bitcoin Cash showcases merchandises such as caps and shirts? Making an individual trust them is their main objective, and so is classified as a centralized organization craving for attention!
Repercussions of BCH Being Centralized Fiat Money
Bitmain holds almost 6% of Bitcoin Cash’s supply of 21,000,000. It was witnessed in April when Bitmain owned mining pool, Antpool artificially pumped up the price of Bitcoin Cash by more than 25% after an announcement that a portion of the mining rewards will be burned. No wonder Roger Ver keeps repeating ‘trust us, we won’t inflate!’. From the marketing team to the development team, they all make their own decisions regardless of the community, which all leads to multiple points of failure.