Reading: Crypto ‘Currency?’ Only 10% Of Bitcoin Cash Used For Transactions

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Crypto ‘Currency?’ Only 10% Of Bitcoin Cash Used For Transactions

Wilma Woo

Wilma Woo | Jun 09, 2018 | 11:00

News

Crypto ‘Currency?’ Only 10% Of Bitcoin Cash Used For Transactions

Wilma Woo

Wilma Woo | Jun 09, 2018 | 11:00


90 percent of Bitcoin Cash holdings are held as investments and never change hands, new research from Chainalysis revealed on June 8.


‘Far Fewer Transactional Users Than Bitcoin’

The findings — which the firm released along with wider insights into Bitcoin’s money supply in 2017-18 — contrast sharply with Bitcoin itself, which has a 50/50 split between investments and transactions.

“It appears that there are far fewer transactional users of bitcoin cash than in bitcoin,” Chainalysis writes. The report continues:

1.5 million bitcoin cash are held for speculation and transactions compared to 7.3 million bitcoin… the ratio of transactional to investment coins in bitcoin is 1:1, while the ratio for bitcoin cash is 1:10.

Bitcoin Cash has traditionally positioned itself as an ‘alternative’ to Bitcoin which gives users cheaper, faster transaction capabilities. The new research counteracts the claims, however, as it appears the controversial altcoin’s users prefer not to transact in it.

Bitcoin’s 50/50 Split

The curious contradiction has since become a point of debate on social media after Hong Kong investment and research firm BitMEX highlighted it in a tweet, late Friday.

BitMEX was responding to a Bitcoin Cash meetup announcement, which saw chief proponent Roger Ver describe the event as being for those who “think that crypto currencies should actually be used as currencies.”

Chainalysis additionally notes that the amount of Bitcoin Cash used for transactions has declined since it forked off from the Bitcoin network — “from 15% in November 2017 to 7% in April 2018” — while the amount of Bitcoin held by speculators has, in fact, increased. Commented the researchers:

This is likely due to exchanges starting to list bitcoin cash, allowing individuals to sell off their bitcoin cash. This bitcoin cash has ended up being held by investors, rather than by people using bitcoin cash for speculation or transactions.

What do you think about Chainalysis‘ Bitcoin research? Let us know in the comments section below! 


Images courtesy of Shutterstock, Twitter/@BitMEXResearch.


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