According to the Bitcoin whitepaper, a blockchain is a chain of hard-coded genesis blocks. These blocks generate every 10 minutes and can only be 1 MB in size. BTC blocks start at 36 MB.
Since the Genesis block created on January 3, 2009, the average block size increased, causing network congestion, slow transaction rates, and high transaction costs. In fact, the maximum average confirmation time for Bitcoin was around 11,453 minutes about 8 days. This is just an average and some users have had to wait weeks.
High Transaction Fee
The highest average BTC transaction fee was around $37. Bitcoin Cash (BCH) was a useless monetary system. Madagascar and Mozambique have an average monthly income of $37.
About half of the world’s population earns less than $2.50 a day. This means that it will take several weeks to earn as much per transaction fee. For many people in the developing world, the fees for BTC Core are insurmountable.
As a result of Bitcoin’s failure in these areas, new attempts made Bitcoin’s idea realize of a peer-to-peer electronic currency called Bitcoin Cash.
Bitcoin Cash turned into created due to the tough fork of BTC on August 1, 2018, which added a far better block length restriction and problem adjustment algorithm, and also rejected the SegWit fork created by the Bitcoin Core developers.
Naturally, free market block sizes with higher limits make them an excellent alternative to Bitcoin Core. Bitcoin Core has reached its internal limit of value when the block size reaches 1 MB.
The idea that BTC is the best or only true currency is Bitcoin Maximalism. However, BTC’s Maximalism is a flawed doctrine from a purely economic point of view. As discussed in this article, only the best-selling items can make money.
Bitcoin Core is less likely to be sold because it is smaller. The disadvantage of Bitcoin Core is numerous.
Bitcoin Core is at number 1, while BCH is at number 5. As every cryptocurrency investor should know, cryptocurrency prices are not based on fundamental principles. Because if it were, the rating would be completely different. This means that investing in technologically superior cryptocurrencies, at least for short-term gains, may not be the best option.
If you firmly believe that BTC is the future and only invest in Bitcoin, you are putting your capital at risk against that belief. Instead, you should mitigate these risks by owning more cryptocurrencies and dynamically adjusting your portfolio.
A simple solution to this is a tokenized fund like Invictus Capital‘s CRYPTO20 or CRYPTO10 Hedged. The former allows you to invest in one C20 token to monetize an index fund that tracks the top 20 crypto assets, while the latter has similar prerequisites for the top 10 crypto assets.
You could argue all day long about what is subjectively the best cryptocurrency, as some people do, or invest in a portfolio of crypto assets that adapt to market realities to make a profit regardless of whether your beliefs are true or not.
“The opinions voiced in this Cryptocurrency news article are solely those of the individuals quoted or interpretations of the author. These opinions & interpretations are not necessarily endorsed by Your Crypto Banker or its subsidiaries.”