Following Satoshi Nakamoto’s phenomenal success with the world’s first digital currency – the all-time popular Bitcoin (BTC) – dozens of new crypto projects began competing for a spot at the top of the crypto market rankings. One such project was Bitcoin Cash (BCH), a forked cryptocurrency from the original Bitcoin blockchain.
Soon after its launch, the asset was quickly added to the most popular cryptocurrency exchanges such as the American number-one platform, Coinbase. The hype around the coin drew in a number of traders who wanted to purchase BCH. However, volatility intervened and things did not go as anticipated at one time, neither for BTC nor Coinbase.
Let us take a deeper look at what actually occurred.
About the Coinbase Exchange
Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam upon the bold premise that everybody ought to be able to exchange Bitcoin in a straightforward and safe manner, regardless of their location. In today’s crypto-world, the blockchain-based exchange provides a secure and user-friendly platform as a way of providing a convenient ingress for their users into the ever-expanding crypto ecosystem.
Since the inception of Bitcoin, developers have been very innovative, introducing a plethora of digital assets of all sorts, including other altcoins, forks, stablecoins, tokens, as well as many other forms of digital collectibles for crypto aficionados.
In this regard, Coinbase is striving to list as many new assets as possible that meet the exchange’s professional criteria in order to better serve the interests of its customers. Coinbase now lists the following cryptocurrencies: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Ripples (XRP), Litecoin (LTC), Cardano (ADA), and (Dogecoin (DOGE), to mention a few.
But, when exactly was Bitcoin Cash added to this list, and, perhaps more significantly, how did the process work? Let us investigate.
Coinbase’s Digital Asset Framework
The process of adding a new currency for trade on the exchange begins with suppliers presenting their crypto projects to Coinbase so that the exchange’s management team can evaluate the new digital currency and make sure it complies with their Digital Asset Framework prior to listing it for trade. Sometimes, Coinbase may choose to list a cryptocurrency on its own without receiving a proposal first.
The exchange typically promotes the new coin immediately after making the decision to list it for trade, in order to provide enough liquidity, as well as a smooth crypto market start-up procedure. Furthermore, Coinbase would promote the debut of the new currency on its exchange by informing its first-time investors about the project’s concept, value, and future market forecasts before they make an investment choice.
When Did Coinbase List Bitcoin Cash?
While the afore-described new asset listing process sounds relatively straightforward and hassle-free, this wasn’t the case with the introduction of Bitcoin Cash to Coinbase’s family of cryptocurrencies as you’ll learn below.
The Coinbase management team decided to list Bitcoin Cash on their exchange in late December 2017, only several months after the BCH coin was forked off the Bitcoin blockchain.
The Coinbase Insider Trading Investigation
Soon after Bitcoin Cash was added to the Coinbase platform for trading, the business launched an insider trading investigation. The reason for this was that the management team saw an increase in suspicious trading activity, which most likely resulted in the unexpected and massive price spike of the newly introduced coin. The Coinbase managers thought it came from the company’s large team of personnel.
GDAX informed its traders through Twitter that trading pairs for Bitcoin Cash (BCH) had been halted owing to the newly observed “extreme volatility” of the coin. This event took place during the live BCH/USD trading on the exchange.
In order to resolve the suspicion, the Coinbase team halted Bitcoin Cash trading on their platform and initiated an investigation. The inquiry, which lasted several months, did not confirm any of the Coinbase executives’ concerns, and all of the company’s workers were cleared of any involvement in insider trading. Finally, Coinbase resumed trading BTC and continued to grow by adding new financial services to its strong lineup, despite the aforementioned challenges with the Bitcoin fork.
What Is Bitcoin Cash (BCH)?
Not long after its establishment into the crypto ecosystem as the most popular coin, Bitcoin’s blockchain began to outgrow its capacity due to the increased demand. As a result, it became more difficult to process the increasingly large volumes of transactions since the transaction blocks required longer periods of time to validate the data.
Bitcoin Cash (BCH) split from the Bitcoin blockchain in an attempt to solve Bitcoin’s lengthy transaction verification time. The exact time of the fork is 5:16:14 UTC, on block #478558. The forking of the Bitcoin blockchain platform occurred on August 1, 2017.
As a hard fork of the Bitcoin network, the new altcoin was planned to alleviate this shortcoming by increasing the block size for any expanse between 8 to 32 gigabytes, thus allowing for the processing of a greater number of transactions per block in the future.
Bitcoin Cash seemed like a good name for the new cryptocurrency since it ramped up the processing time and lowered the transaction costs enough to allow BCH to be used like fiat currencies.
The Bitcoin Cash Fractions
2017 saw a division among Bitcoin supporters: those who favoured big transaction blocks (Bitcoin Cash supporters), and those who preferred smaller transaction blocks (Bitcoin supporters).
Roger Ver, the founder of Bitcoin.com and one of the most vocal supporters of this Bitcoin hard fork, argued that Bitcoin Cash represents the ultimate realization of Satoshi Nakamoto’s original Bitcoin concept for the first cryptocurrency.
According to Ver, increasing the block size of Bitcoin (BTC) empowers the coin and helps it become an exchange medium used in daily transactions. In turn, the higher transaction volume provided by the larger block size allows for it to compete with even the largest international payment processing businesses, such as VISA. As a last point of clarification, Ver is confident that a larger Bitcoin blockchain would help reduce transaction fees, which can potentially discourage traders from investing in Bitcoin.
A Few Words Before You Go…
Coinbase, one of the most trustworthy and largest cryptocurrency exchanges in the world, was founded in 2012. The creators’ vision was to provide more financial freedom to Coinbase users and crypto traders in support of the ever-expanding cryptocurrency market.
In this sense, they added the fork of Bitcoin – Bitcoin Cash – shortly after its launch, in late December 2017, as a more economical means of trading on the crypto market. After the internal investigation regarding the unpredicted BCH volatility, this highly reputable and safe trading platform resumed offering its advanced trading tools.
The favourable outcome of this lawsuit appears to have further bolstered Coinbase management’s determination to keep up the good work and expand both its user base and the digital assets available for exchange. Coinbase is now one of the most popular and trustworthy crypto exchanges in the world, where you can safely trade BCH, too.
