WHY A BITCOIN.COM CO-FOUND SOLD ALL OF HIS BITCOINS
In recent years, cryptocurrency has taken the world by storm with the sudden surge in its price. Bitcoin particularly has attracted the attention of investors and punters everywhere all looking to jump in on the entire cryptocurrency craze.
Adding to the firestorm is the recent decision made by Emil Oldenburg, the co-founder of bitcoin.com to convert all of his bitcoins into a spin-off currency known as Bitcoin Cash. Oldenburg commented that he has sold all of his bitcoins and invested it all into Bitcoin Cash (BCH).
Oldenburg has had an extensive cryptocurrency career, with his primary investment being bitcoin. Far from bashing on bitcoin publicly without good reasons, his latest actions have turned heads in the cryptocurrency industry, with many investors doubting the future of bitcoin to be anything but positive.
As well as being the co-founder of bitcoin.com, he is also the co-founder of Safello – a Swedish bitcoin exchange agency.
Why Did Oldenburg Sell All His Bitcoins?
“I would say an investment in bitcoin is right now the riskiest investment you can make,” he warned.
Oldenburg’s concern was that many investors had not made any real trades by buying and selling bitcoin and upon discovering that bitcoin was unsuitable to be used in trade due to the long transaction lead times and high transaction fees, many investors would begin selling bitcoin off. This resulted in the crash of the currency's value making it useless in the long run.
Consequently, Oldenburg has stated that this would make bitcoin an extremely illiquid and risky currency.
Furthermore, comments made by Roger Ver, CEO of bitcoin.com and Oldenburg’s business partner, has also come out in support of bitcoin cash, citing the lower transaction costs and more liquid nature of Bitcoin Cash.
Why The Move to Bitcoin Cash?
Let’s first define what they both are first. In a nutshell, bitcoin is essentially a virtual currency that was introduced by an unknown computer genius under the alias Satoshi Nakamoto. By breaking down blockchain transactions, a user can earn a bitcoin. The process of breaking down these blockchains is known as “bitcoin mining.”
Bitcoin Cash is a hardfork of the bitcoin that was created in August 2017. Essentially, it increases the size of blocks allowing for more transactions to be processed.
Bitcoin cash has lower fees, along with quicker transaction processing capabilities and greater scalability which was bitcoin’s original purpose.
Where is Bitcoin at Right Now?
In recent times, bitcoin has gained popularity and seen increased acceptance among the more mainstream members of society. Some groups on social media sites even advertise bitcoin mining pools and trading exchanges. Even in Malaysia, a distributor for Malaysia’s national car has stated that it will accept bitcoin as a medium for exchange.
However, Oldenburg argues that the process of recording transactions on bitcoin’s blockchain is impractical. The number of transactions per second on bitcoin’s entire blockchain is limited to the memory size of each “block” that the information is stored on. When compared, Bitcoin Cash’s block size limit is eight megabytes whereas bitcoin is one megabyte.
Additionally, the transaction fee for Bitcoin Cash (as of December 20, 2017) is only $0.012. This negligible amount coupled with its fast processing speed makes it an obvious choice when considering a functional cryptocurrency.
Regardless of the situation, one can expect bitcoin to be part of mainstream life now as an increasing number of people adopt the currency. However, the decision on which cryptocurrency is up to the investor.