Bitcoin Cash (BCH) Payment Volume Down 67% Since March

The use of Bitcoin Cash (BCH) in commerce has dropped significantly since March, an analysis of the 17 largest crypto payment processor suggests.

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The use of Bitcoin Cash (BCH) in commerce has dropped significantly since March, an analysis of the 17 largest crypto payment processor suggests.

Chainanalysis, a blockchain analytics firm, came to this conclusion after analyzing payments made to 17 of the world’s largest payment processors such as BitPay.

According to a Bloomberg report published on August 20, BCH payments dropped from $10.5 million recorded in March to $3.7 million in May.

The decline does not affect BCH only though. The year-long bearish market may have had a drastic impact on most major cryptocurrencies. Other coins that have been affected are LTC, ETH, and BTC.

For example, Bitcoin (BTC) payments plunged from $412 million in September 2017 to about $60 million in payments last May. Even though BTC experienced that huge drop, it is still used in commerce by a wide margin compared to Bitcoin Cash.

There appears to be an explanation for this disparity, despite BCH’s stated aim of becoming a better payment currency than BTC.

According to Chainanalysis’ senior economist Kim Grauer:

“There are fewer users of Bitcoin Cash, fewer holders.”

Kim Grauer also told Bloomberg on the phone that Bitcoin Cash has a problem arising from what he called ‘concentrated ownership’. The analysts found that only 67 crypto wallets controlled nearly 56 percent of all BCH.

One example is the revelation that of the 67 wallets, 2 hold between 10k and 100k BCH. The Chainalysis economist said that it was possible that these ‘whale’ (wealthy holders) were the ones responsible for most of the payments made via merchant services.

The Future of BCH

Bitcoin Cash is a fork of Bitcoin created in August 2017. Even though there has been a lot of negativity around the coin, most people within its community believe it has the foundation to achieve its goals.

The BCH blockchain underwent a system upgrade last quarter that increased its block size from 8MB to 32MB. The increased bandwidth gives the network room to handle the expected high volume of transactions. However, this hasn’t really been the case as.

The upgrade has one other very important role.  The bigger block size will enable Bitcoin Cash to store huge chunks of information with every transaction.

It is a move that will give the blockchain a chance to integrate smart contracts capabilities. The difference with other platforms is that BCH will do this on-chain and at very low costs.

If the developers get it right, BCH will remain a competitive platform going into the future.

Looking at the market, BCH price has dropped by over 75 percent in 2018, compared to Bitcoin (BTC) that has lost nearly 55 percent of its value since the turn of the year.

Bitcoin Cash is currently trading at $575 against the US dollar, down by nearly 4 percent in the last 24 hours. However, BCH/USD is trading over 7 percent up on its price over the week.

According to XBT.net, Bitcoin Cash is the fourth largest digital asset by market capitalization. It has a market valuation of $9.2 billion and an average intraday trading volume of $333 million.

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