Microsoft Calls Out Bitcoin Cash & Advocates Litecoin as Superior

In recent days, controversial Bitcoin fork Bitcoin Cash has surged by more than 40% in value. In a shock move against the digital currency, however, none other than IT consumer tech giant Microsoft, has come out to make digital mincemeat out of the coins use case.

On Chain Scaling & Forking Simply Doesn’t Work - Says Microsoft

Bitcoin Cash and cryptocurrency forks like it, tend to justify their existence by highlighting serious scalability flaws with the coins which they initially fork from.

Bitcoin Cash, it says, is superior to Bitcoin, namely due to the fact that the BCH blockchain can process transactions faster and more cost-effectively. In fact, the Bitcoin Cash community regularly courts controversy, by suggesting that BCH isn’t just superior to Bitcoin. Instead, as far as Bitcoin Cash is concerned, BCH is the original Bitcoin.

Needless to say, Bitcoin Vs Bitcoin Cash arguments more often than not lead to investor confusion. This is why Microsoft coming out in support of the original Bitcoin is hugely significant.

How Microsoft Just Ended the BTC VS Bitcoin Cash Argument

Citing the results of over a year of intensive research into Bitcoin and associated blockchain technology, Microsoft has concluded that forking and on-chain scaling of coins like Bitcoin, is in no way beneficial in the long-term.

According to Microsoft’s data, attempting to solve blockchain scalability issues by creating coins like Bitcoin Cash, can only lead to weakened blockchain decentralization. As a result coins like Bitcoin Cash are more prone to fraud, purposeful blockchain manipulation, and reduced mining support in the long term.

Forking Bitcoin to Increase Block Sizes is Counter-Productive

Needless to say, Bitcoin Cash advocates are not going to be too pleased with Microsoft’s research findings. All cryptocurrency investors, however, would be wise to take note of one key conclusion reached by Microsoft, namely that:

“Increased on-chain transaction capacity (e.g. blocksize increases), generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale.”

In short, despite coins like Bitcoin Cash saying that their primary use case is to facilitate greater (and faster) numbers of transactions, BCH will eventually need to be forked repeatedly as global transaction volumes (theoretically) increase.

Why Litecoin-like Second Layer Blockchains are the Future

Microsoft’s research into Bitcoin and Bitcoin Cash, can at first read critically of both forms of digital currency. After all, if increasing block sizes and forking blockchains can only ever result in weaker decentralization, both cryptocurrencies should be doomed.

Thankfully, (and as a significant show of support for Litecoin) what Microsoft also found during its research, is that second layer blockchains like Litecoin’s Lighting Network can be used as effective blockchain scaling solutions.

Put simply, second layer blockchain solutions like the Litecoin Network, provide faster and more affordable transaction processing, whilst maintaining the original integrity of the original (in this case Bitcoin) blockchain.

How Litecoin has Already Proved Microsoft's Hypothesis

As cryptocurrency investors will be aware, Microsoft coming out in support of Litecoin, is potentially game-changing. As it happens, however, Litecoin itself has already proved Microsoft’s reduced decentralization hypothesis. This is due to the fact that despite the Litecoin Lighting Network still being under development, the network already has a greater number of transaction nodes (and greater decentralization as a result) than competing token Bitcoin Cash.

What Do Microsoft’s Findings mean for Other Altcoins?

Without question, Microsoft’s research into blockchain scalability completely undermines the use case of coins like Bitcoin Cash, Litecoin Cash, and other cryptocurrency hard forks. At the same time, however, findings directly support blockchain innovations being led by coins like Cardano, Dash Coin, and DigiByte. This is because all such coins already feature second-tier scaling and multi-level transaction processing protocols.