Bitcoin Cash as an anti-inflation tool?

Bitcoin Cash inflation

According to some analysts, alongside Bitcoin, there would be a cryptocurrency that could have more value as an anti-inflation tool, Bitcoin Cash (BCH), which was one of the forks of Bitcoin.  

Inflation in the US and cryptocurrencies

In the US, inflation rose last month to 6.8 percent, the highest level in 39 years. 

The FED is ready to intervene to cool down what appears, together with the dangerous new variant of the virus, to be the most insidious threat to economic growth.

In this context, the value of cryptocurrency as a hedge against rising inflation has long been questioned. 

According to many observers, the fact that Bitcoin’s design calls for a limited number of circulating coins (21 million) would make cryptocurrency a store of value on par with gold that can react to the inflation problems that are inherently linked to fiat currencies.

A recent report by Arcane research showed statistically how Bitcoin had a much higher return than any other financial instrument, precisely during a period of high inflation like this past year. 

It is also interesting to analyze the loss in value over the past decade of the euro and the dollar, compared to the stratospheric gains of Bitcoin and the major cryptocurrencies over the same time frame.

Bitcoin Cash inflation
Bitcoin Cash is a fork of Bitcoin

The innovation of Bitcoin Cash 

Bitcoin Cash is a fork of Bitcoin created in 2017 to make the currency more scalable and sustainable than its progenitor. 

Basically, the blockchain that governs Bitcoin Cash has a modification in the algorithm, which changes the difficulty of the mathematical calculations that need to be solved to mine the coins. 

The developers of Bitcoin Cash wanted to increase the computational power to make the blockchain’s blocks validation more immediate and simple.

With this system, Bitcoin Cash gets to solve 116 transactions per second compared to Bitcoin’s 7. 

This makes the Bitcoin Cash blockchain much more scalable than Bitcoin’s and could allow it to overcome the problems associated with the Bitcoin blockchain’s high consumption and low sustainability.

Bitcoin Cash anti-inflation

The fact that Bitcoin Cash has also become more profitable for cryptocurrency miners, who are partly abandoning Bitcoin to focus on BCH, also makes the cryptocurrency more stable than Bitcoin, and this, according to some experts, would precisely make Bitcoin Cash an important store of value against periods of high inflation like these.

The fact that it maintains the same limitations in supply at 21 million pieces but is more scalable and more sustainable could make it more attractive to those investors looking for a viable alternative to the gold store of value against periods of high inflation and uncertainty in the financial markets like the current one.

The post Bitcoin Cash as an anti-inflation tool? appeared first on The Cryptonomist.