There's a problem with Bitcoin. Its transaction fees are getting too expensive and it is taking too long for transactions to be confirmed because the size of the blocks are too small for the amount of usage the network is getting. In the original Bitcoin whitepaper published by the inventor Satoshi Nakamoto, it was written that the block size can and should be, enlarged to as big a size as it needs to be, to process transactions. For the first 8 years of its life, Bitcoin's block size grew to cope with the increasing demand for its use. The results are clear: people began to increasingly adopt Bitcoin. Its market share dominated that of all other cryptocurrencies.
In the last couple of years however, a group, identified as Bitcoin Core, kept refusing to increase the block size. In fact, it is their intention and vision that Bitcoin is to incur high transaction fees. The results are clear: people began using other cryptocurrencies. Bitcoin's market share drastically plummeted.
People began to say that Bitcoin's use case is and should not be to be used as cash to transact. Rather, it should be just a store of value, like gold. By this, they mean that if you want to store say, $10000, then buy the equivalent in Bitcoin and if you ever need it, you can convert it back. This concept of Bitcoin being developed to be like Gold, assumes that Bitcoin will hold it's value.
The problem is, Bitcoin is not gold. On its own, gold is useful in jewelry-making, medical and dental industries, manufacturing, construction and so forth. This is the reason why it was used as a store of value in the first place, because it has its own value. Bitcoin is not the same. It does not have value on it's own. The only value proposition Bitcoin has, is the promise that one day, it will be a widely-used currency. In countries like Japan, it is already explicitly declared, legally, as a form of payment. This is the reason why many people buy Bitcoin: so that they can use it as currency today or sometime in the future. This is the underlying motive behind why people invest or hoard it. With this utility and its limited supply of 21 million, Bitcoin's price indeed has more than held its value for almost a decade. Without its utility as currency, why would people believe it will hold its value in the future? They won't. Having no utility means Bitcoin will have no value. No one will have any reason to buy it. Its price will be zero. For Bitcoin to be anything, it must fulfill the reason for why it was created: to be currency. To be cash - electronic cash - as it was first defined in its original white paper.
This is the reason why Bitcoin Cash was created. Bitcoin Cash is a version of Bitcoin that is more inline with the intentions of its inventor/s. The group of people who split Bitcoin Cash from Bitcoin did so because the Bitcoin Core group was never going to increase the block size enough to ease network congestion. Bitcoin Core, the group, were and are, still dead-set on using a solution called Segregated Witness and Lighting Network instead of increasing block size.
Having a difference of opinion between solutions to a problem is normal especially for an open source project like Bitcoin. However, when I try to find out more of what is going on, I find the toxicity in the discussions so bizarre that comments are directed towards personally attacking people who advocate for Bitcoin Cash. Examples of such people are Jihan Wu, CEO of a major Chinese mining operation and Roger Ver, a man who heavily promoted Bitcoin in its early days and funded and got involved with many Bitcoin-related businesses. Later, I find out that similar tricks were used against previous projects. Worse, they seem to have worked. You can have a look yourself. Find a video or an article mentioning Bitcoin Cash and read the comments there.
The zeal and vitriol from people who are against Bitcoin Cash seemed too extreme for the type of technical discussion they're supposed to be having. When you dig deeper, here is what you will find out.
- Many of the Bitcoin Core developers are being financially funded by a company called Blockstream.
- Blockstream was co-founded by a Bitcoin developer named Dr. Pieter Wuille. (There is a potential conflict of interest. A developer champions for changes to Bitcoin, directly or not, to make Bitcoin reliant on the exact service that only his company can provide.)
- Blockstream provides blockchain services like Lightning Network. That is how they make their money.
- Blockstream is being funded by AXA, a big financial institution. (Source: https://www.axa.com/en/newsroom/news/axa-strategic-ventures-blockchain)
One way to make money is to install road tolls. Demand toll fees for every car that passes through a road. It seems that the road toll business model is being used here. The Bitcoin Core group is being made to develop Bitcoin so that transactions or portions of our transactions are funneled or processed outside of the Bitcoin Network, into what's called a Lighting Network, which is somewhat operated, controlled or serviced by Blockstream. Whatever the relationship is, the point is, that Blockstream will have managed to insert itself into the transaction process where they can either charge fees or impose certain conditions.
That's good for them: Bitcoin Core developers get their wages/salaries, Blockstream gets to profit from its services and AXA gets good returns for its investment. But for the rest of us, we get to pay the higher fees that goes into their pockets to use the Bitcoin network.
Knowing this tells us a lot about the incentives and motives of people. It becomes easier to believe that the examples and anecdotes of people are being paid to troll and be shills against Bitcoin Cash (BCH) are real. There is enough incentive and motive to censor individuals arguing for alternative solutions and to block them from participating in discussions.
If you like the idea that Bitcoin allows us to freely transact with each other, without the control of banks, central banks and governments, this should worry you. Let me explain.
With Bitcoin at the moment, people transact with each other directly. Person A gives Bitcoins to Person B. All miners do is to update the blockchain ledger to record that Person A gives Person B some Bitcoins. It is difficult for governments to regulate miners under the justifications that exist for current financial regulation because all they are doing is to actually just record our transactions on the blockchain.
However, when a corporation like Blockstream starts getting in between this whole process, it would be easier for government to justify exerting control over our transactions by regulating companies like Blockstream due to the importance of their function in such a scenario. I am not against regulation when it is important and necessary. What I am against is unnecessary regulation purely imposed so that only certain, selected groups of people stand to greatly benefit and profit at the expense of everyone else. This is what this situation looks like to me.
This Segwit/LightningNetwork solutions creates a form of centralization that we should be wary of. It forces us all to be reliant on a corporation or corporations and creates an opportunity for governments to regulate our transactions by regulating these companies. Isn't this the type of centralization that Bitcoin was supposed to overcome to protect its security and integrity? The Bitcoin Network, as it is, can process our transactions without the help or hindrance of corporations or governments.
If you want a centralized, regulated, payment system, use Visa, Mastercard and your current bank card. If Blockstream with their Bitcoin Core team get their way, Bitcoin will become a big disappointment. Thank goodness we have Bitcoin Cash. With Bitcoin Cash, we still have the hope of realizing the dream of having a decentralized, peer to peer, electronic cash that gives us fast, cheap, transactions, across geographical borders, unhindered by corrupting political forces.
Here is a video made by a YouTuber, Ed, who thinks and feels similarly about the issue. I urge you to watch it too because his style is more direct.