Unique risks
Bitcoin Cash has numerous issues, most notably a lack of user adoption, relatively high levels of centralization of both mining pools and governance, and no competitive advantages. Here are more details on the biggest problems with Bitcoin Cash:
- Despite forking away from Bitcoin to be a better electronic currency, Bitcoin Cash is still far behind in terms of use. In the first quarter of 2022, Bitcoin regularly recorded 250,000 or more transactions per day, compared to only about 50,000 for Bitcoin Cash.
- Its network is dominated by a small number of mining pools. As of April 2022, seven mining pools were responsible for mining more than 50% of Bitcoin Cash blocks.
- It may be faster than Bitcoin, but there are plenty of other cryptocurrencies that beat Bitcoin Cash in this area. Algorand (ALGO +3.47%) processes 1,000 transactions per second, and Solana (SOL +6.98%) can reportedly process 65,000.
Even though Bitcoin Cash was supposed to be true to the original vision for Bitcoin, its new community couldn't quite agree on that. Somewhat ironically, Bitcoin Cash went through a hard fork of its own a little over a year later, leading to the creation of Bitcoin SV (BSV +3.00%).
The "SV" stands for "Satoshi Vision." Satoshi was the pseudonym used by the original creator of Bitcoin. For those keeping score, that's three versions of Bitcoin, all claiming to be the one that fulfills the creator's original vision.
Is Bitcoin Cash a good investment?
There are too many weak points of Bitcoin Cash to recommend it as an investment. It's also not intended as an investment to begin with; one of the ways it distinguishes itself from Bitcoin is that it's designed to be used as a currency.
In a crowded field of cryptocurrency projects, Bitcoin Cash doesn't set itself apart. Offering faster and cheaper transactions than Bitcoin isn't a big deal anymore. If you're looking to invest in an ultra-fast, scalable blockchain, there are better options than Bitcoin Cash.
While Bitcoin Cash has had brief periods of success, it has been unimpressive overall. To put its performance in perspective, from Bitcoin Cash's launch on Aug. 1, 2017, through the end of 2021, its returns were 46%. Bitcoin's returns during the same period were 1,513%.
If you want to transfer money quickly and at a low cost, you could do it with Bitcoin Cash, or Nano (NANO +0.85%), or Stellar (XLM +6.61%), or many other coins. If you want to invest in cryptocurrency, Bitcoin Cash doesn't have much to offer.
How to buy Bitcoin Cash
Most places that sell cryptocurrency have Bitcoin Cash, so it's one of the easiest cryptocurrencies to buy. You can find it on cryptocurrency exchanges, stock brokerages, and even payment apps such as PayPal (PYPL +3.37%). Here are a few more options if you want to buy Bitcoin Cash:
With low fees and fast transactions, Bitcoin Cash has utility for money transfers. Just don't fall into the trap of investing in it because it costs less per coin than Bitcoin. The lower price doesn't make it a better or more accessible investment since Bitcoin has historically performed much better.
