The Bitcoin Cash network is currently processing more transactions than Bitcoin did early August at exceptionally low fees, providing a vindication of the big-block scaling approach.
Bitcoin Cash, which forked off of the main Bitcoin chain at the beginning of the month, processed a high of 26,500 transactions the first week of August before tapering down to under 10,000 recently. This week, however, the transaction volume increased to briefly to 135,550 per 24 hours. This is more than the Bitcoin network handled on August 1st, which was 131,000 transactions. Bitcoin Cash was able to process this amount without any major congestion problems due to its 8mb blocks (compared to Bitcoin’s 1mb).
Bitcoin fees are close to all-time highs, no off-chain scaling yet
Present Bitcoin transaction fees are on a sharp rise, quickly catching up to previous all-time highs. In early June, the average Bitcoin fee reached its high of $5.50 per transaction during the period of peak network congestion. The following reduction in transactions, especially during the early-August period of uncertainty, brought the average fee down to $1.36. Now, the average fee is back to $5.28, almost at its previous all-time high.
Meanwhile, during the large spike in transaction volume, average transaction fees for Bitcoin Cash dropped considerably, from about $0.19 per transaction to about $0.01. The median transaction fee also saw a corresponding drop from $0.056 to $0.002. This demonstrates that the Bitcoin Cash network is able to handle a large transaction volume on-chain efficiently while keeping fees very reasonable.
A vindication of massive on-chain scaling, including Dash’s approach
The ability for Bitcoin Cash’s large blocks to efficiently process significant transaction volume while maintaining low fees demonstrates the validity of a big-block approach with on-chain scaling. Dash famously committed to a purely on-chain approach to scaling the network earlier this year, with over 400mb blocks down the road to enable the network to scale to 5,000 transactions per second. The surge in Bitcoin Cash transactions demonstrates that, in practice as well as theory, larger blocks can be an efficient way of handling large transaction loads without resorting to off-chain scaling, lending some credence to Dash’s long-term scaling plan.