With energy prices rising, switch to a cheaper plan
Compare Prices Now

Bitcoin Cash stress test packs up to 25,000 transactions into each block

Posted: 3 September 2018 1:18 pm
shutterstock bitcoin cash flag 450x250

What do these results mean for BCH, if anything?

Bitcoin Cash is defined by its large block size, these days a full 32MB, as an on-chain scaling solution intended to solve bitcoin's scaling problems.

A recent stress test put this capability on show, with a recent community-driven stress test packing an average of 14,240 transactions per block at its peak, according to CoinDance. At its peak, the fullest block managed to pack in about 25,000 transactions, CoinTelegraph reports.

The test essentially involved a lot of people sending as many transactions as possible, with as low fees as possible. Throughout the test, average Bitcoin Cash transaction fees stayed as a cool fraction of a cent.

It was a monumental effort, with the Bitcoin Cash network taking over the majority of all crypto transactions in the 24 hour period of the test. The test took place on 1 September, and Bitcoin Cash prices are up about 5% against fiat and 3.5% against bitcoin at the time of writing, perhaps as a result of the showcase.

The bad news for BCH might be that it doesn't necessarily mean Bitcoin Cash will overtake bitcoin any time soon. Some might argue that if lower fees and quicker transactions were the core value proposition, the BTC:BCH "flippening", where BCH prices rise above bitcoin, would already have happened.

And while 25,000 transactions per block sounds like a lot, it might still fall short of the scalability required for a global payment system. The average Bitcoin Cash block time is 10 minutes, as designed, so even the full 25,000 transactions per block still translates to only 40 transactions per second. The large blocks come at a cost too, increasing the storage requirements for anyone running a full bitcoin node. Over time, this might get worse.

From one angle, larger block sizes will only ever be a stop-gap measure, unable to inflate as needed to ensure the required scalability. From that perspective, in the long run more ambitious solutions like the bitcoin Lightning Network, if it ever works, will arguably be able to solve the problem without the downsides of the larger block sizes.

From another angle, the bitcoin Lightning Network will always function even better when built on top of a more scalable network. If both bitcoin and Bitcoin Cash implement the Lightning Network and other multi-layer scaling solutions, then Bitcoin Cash will still arguably have a functional advantage.

From another angle still, it might not matter either way. Bitcoin Cash transaction fees typically hang around the fraction of a cent to a couple of cents range, along with XRP, Litecoin, DASH, Dogecoin and many more.

Arguably, Dogecoin and XRP are still functionally superior, because their fees tend to be more consistently low. Clearly, quick and cheap transactions aren't the sole value proposition in cryptocurrency these days.

juicy crypto words

Bitcoin was dreamed up as a payment network before its scaling problems saw the goalposts shift to it being "digital gold." As ridiculous as it is this tack has been undeniably successful, letting bitcoin brush off some of its worst excesses and inefficiencies.

From a branding perspective Bitcoin Cash might be caught in no-man's land. It's not the digital gold that bitcoin is, nor the payment network that other coins are. With its focus on quicker and cheaper transactions, it is working towards a fundamentally different value proposition than bitcoin is, so its "the real bitcoin" shtick might not be able to take it where it wants to go.

The Bitcoin Cash stress test showed what it can do, but perhaps not what it ever will do. No one doubts that BCH has a nice wide highway. The problem is it has no cars.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Latest cryptocurrency news

Picture: Shutterstock

Get into cryptocurrency

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site