In late summer 2017, a hard fork of the Bitcoin protocol resulted in the creation of Bitcoin Cash. This represented a split within the Bitcoin community (the network of users, developers, etc that are involved in a protocol’s ecosystem).
A community is like a crypto tribe, a common belief draws them together to build an open source project.
In crypto, community is what matters… so when we see a fork we complicate adoption and network effects.
When a community splits (forks), both sides are weakened.
I was initially supportive of Bitcoin Cash (held the coins) and believed that there was merit in the fork. Bitcoin could remain “digital gold” and therefore more of a store-of-value type investment. I developed my own price target based on the size of the gold market and assigned Bitcoin a future market share.
At the time I believed Bitcoin Cash would succeed over Litecoin and others for more of a currency use case in the developing world.
Now that Bitcoin Cash is forking itself my fundamental assumptions are proving false for Bitcoin Cash. The Bitcoin Cash community has proven too divisive to come to consensus on the road ahead. I sold my Bitcoin Cash holdings:
However the current drama plays out, I expect more forks in the future because the community surrounding Bitcoin Cash is anarchistic in nature. It seems largely comprised of personalities that are more inclined to disagree than to reach compromise.
As Bitcoin Cash devolves into civil war, the Bitcoin community is looking “good” by comparison. It seems to have jettisoned it’s “bad apples” during the fork last summer. The Bitcoin community is showing its value.
Which #crypto asset benefits the most (relatively) from the #bitcoincashhardfork drama? It's a net neg for the entire space goes w/o saying @fundstrat @CNBCFastMoney @TusharJain_ @KyleSamani @ProfFaustus @rogerkver @laurashin @cryptomanran @Crypto_Macro @BKBrianKelly @APompliano
— CoinSavage (@coinsavage) November 16, 2018
When making investment decisions in the emerging crypto asset class understanding community dynamics is important.