Ever since it was launched, bitcoin cash has been engaged in a “civil war” of sorts with its parent, bitcoin. Bitcoin cash proponents claim it represents bitcoin founder Satoshi Nakamoto’s original vision for a cryptocurrency because it has a variable block size to enable fast and easy transaction processing on its platform. But critics claim bitcoin cash is profiting from bitcoin’s brand and attempting to usurp its position.
Cryptocurrency exchange Coinbase was drawn into the war this week after Misha Guttentag wrote a Medium post asking it to stop offering investors the facility to buy bitcoin cash through its platform. The recent Yale Law graduate claims that bitcoin cash is engaged in “consumer fraud” and “misrepresentation.”
Coinbase included bitcoin cash on its exchange last year. The news, which was announced suddenly, resulted in a surge in bitcoin cash’s price and led to an outage on Coinbase.
The Problem With Bitcoin Cash
To make his case against bitcoin cash, Guttentag illustrated a number of instances where the currency has deliberately copied bitcoin or deluded investors into thinking that they were dealing with the original.
For example, Roger Ver, a vociferous backer of bitcoin cash, owns bitcoin.com, possibly a first stop for potential coin investors interested in learning about the topic. (See also: Who Is Roger Ver aka Bitcoin Jesus?)
The site offers a downloadable wallet that stores bitcoin cash, instead of bitcoin, but does not explain differences between the two. Instead, it takes advantage of the striking similarity between the logos of bitcoin and bitcoin cash to advertise its wallet. (See also: Bitcoin vs. Bitcoin Cash: What's The Difference?)
(Image: Misha Guttentag)
According to Guttentag, Coinbase is endorsing bitcoin cash’s attempts to portray itself as bitcoin by allowing its purchase on the platform. “Coinbase has got to get rid of this thing. It is toxic for Coinbase’s brand,” he writes, adding that Coinbase can kill “two birds with one stone” by eliminating support for bitcoin purchases on its exchange.
First, it will make amends for its “mistake” in supporting bitcoin cash without prior notification. Second, the move will warn other coins interested in being listed on its exchange that “that kind of behavior might work on other unregulated exchanges, but not here,” Guttentag wrote.
That this is a sensitive topic within cryptocurrency circles is obvious from the responses to Guttentag’s post. The commenters are divided between support and disdain for bitcoin cash and have expounded at length for their position. Meanwhile, bitcoin cash has partially reversed its precipitous decline from the beginning of this year. The cryptocurrency started the year trading at $2510 and fell to $783 on Tuesday morning. At 3:11 UTC, as of this writing, it was trading at $1240.85, up 24.4% from its price 24 hours ago.
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