According to a recent report by renowned blockchain analytics firm Chainalysis, Bitcoin Cash (BCH) is still crippled unable to make steady moves and break even with global demand for cryptocurrency.
As reported by Bloomberg on August 20, 2018, Chainalysis’ research showed that BCH payments had failed to appeal to a larger audience leading to massive drops. Bitcoin Cash registered $3.7 million in May, which was a significant drop compared to the $10.5 million figure recorded in March.
Attesting to the worrying condition of BCH, Kim Grauer, the senior economist at Chainalysis, said “there were fewer users of Bitcoin Cash, fewer holders.”
In the report, Bitcoin (BTC) payments had also stumbled. The popular digital coin’s volume was estimated at $60 million in May, a figure that was subsequently lower than September 2017’s high of $412 million.
While there are several opinions regarding BCH continued price decrease, Grauer affirms “concentrated ownership” as one of the contributing factors towards a slowed global BCH adoption. The 75% decrease on BCH price and the alarming 55% BTC payments dip are consequently raising concerns as bitcoin cash maintains its bearish curve.
According to Chainalysis, about 56% of digital currency is controlled by 67 wallets that are not located on exchanges.
Generally, Grauer says each two wallets are designated to hold about 10,000 and 100,000 BCH thus affirming that “the wealthiest holders are the ones sending a lot of the traffic to merchant services.”
Although bitcoin cash launch over a year ago did cause a lot of controversy in the bitcoin community, Alejandro de la Torre, BTC.com vice president of business operations, defended the move arguing that it would keep the community aligned.
De la Torre said, “The ability to make forks while keeping the community aligned was a great achievement. By providing much greater bandwidth per block by first increasing to 8 MB and then again to 32 MB. This additional room is more than what is needed right now, but BCH seems to be looking ahead and getting ready to process high volumes of traffic. The greater block size also enables BCH to store more information in each transaction, giving the blockchain space to write smart contracts on-chain at low costs.”
