Introduced in 2017, Bitcoin Cash, commonly known as BCH, represents a distinct cryptocurrency that originated from a fork in Bitcoin. The primary objective of BCH is to serve as a digital cash platform facilitating swift, affordable transactions via a secure network. Echoing Bitcoin’s operational style, Bitcoin Cash relies on a decentralized peer-to-peer network, eliminating the necessity for banking intermediaries.
How does Bitcoin Cash work?
The operations of Bitcoin Cash are built upon the principles of blockchain technology, a publicly accessible ledger encapsulating all transaction-related data from every Bitcoin Cash user. This recorded data is inviolable, ensuring it cannot be altered, thereby offering a transparent transaction history. Here’s a simplified explanation:
- Transactions: Bitcoin Cash transactions involve a sender, a receiver, and the BCH amount transacted. Each transaction is digitally signed for security.
- Blocks: Transactions are grouped into blocks. Each block also references the block that came before it – this is what forms the blockchain.
- Mining: Miners use powerful computers to solve complex mathematical problems that validate transactions and add them to the blockchain. In return, they earn BCH.
Bitcoin Cash increases the size of the blocks, allowing more transactions to be processed in each one.
History of Bitcoin Cash?
Bitcoin Cash was first launched in August 2017, as a result of a hard fork from the Bitcoin blockchain. This hard fork was done in response to the long-standing issue of scalability on the Bitcoin network. While Bitcoin’s block size was limited to 1MB, Bitcoin Cash increased this limit to 8MB, intending to process more transactions and reduce fees.
The launch of Bitcoin Cash resulted in one of the largest and most contentious “forks” in cryptocurrency history. A fork happens when a group of blockchain network participants agrees to change the rules that govern the network. This agreement was not met without resistance. Some members of the Bitcoin community felt that adopting BIP 91, without increasing the block-size limit, favored people who wanted to manage Bitcoin as a digital investment and not as a transactional currency.
In 2018, Bitcoin Cash had a hard fork of its own, which resulted in the creation of Bitcoin SV (Satoshi’s Vision). The split was a result of disagreements in the BCH community about how to sustain the coin’s growth. This highlighted the constant challenge faced by cryptocurrencies – the need to balance between scaling for a growing user base and maintaining security and performance.
Who Are The Founders of Bitcoin Cash?
Bitcoin Cash was basically founded by miners, developers, and investors who were concerned with Bitcoin’s scalability issues. Prominent figures in the Bitcoin Cash initiative include Roger Ver, an early Bitcoin investor and advocate, and Jihan Wu, the co-founder of BITMAIN, a notable player in Bitcoin mining.
What Makes Bitcoin Cash Unique?
Bitcoin Cash is unique because of its focus on being a viable medium for daily transactions. It increased the block size to 8MB and later to 32MB, allowing more transactions per block. This results in lower transaction fees and faster confirmation times compared to Bitcoin. The goal of Bitcoin Cash is to be used as cash by merchants and users globally.
Bitcoin Cash also highlights the importance of unrestricted growth, global adoption, and decentralized development. The BCH community believes that these qualities are crucial for the Bitcoin project’s original mission to become “a peer-to-peer electronic cash system”. The decision-making process is distributed among miners and developers, helping to maintain the network’s decentralization.
Furthermore, Bitcoin Cash stands out because of its Emergency Difficulty Adjustment (EDA) algorithm. This feature allows Bitcoin Cash to maintain relative mining difficulty stability in response to changing hash rates. This EDA, unique to BCH, helps maintain miner activity and secure the blockchain, even when the price fluctuates.
Why use Bitcoin Cash?
Here are several key advantages to using Bitcoin Cash:
- Affordable Transaction Fees: Bitcoin Cash typically charges less in fees compared to Bitcoin, making it a cost-effective choice for regular, small transactions.
- Faster Transactions: Thanks to its larger block size, more transactions can be processed speedily on Bitcoin Cash.
- Scalability: Bitcoin Cash is engineered to scale and accommodate a substantial volume of transactions.
- Security: Owing to its blockchain framework, transactions on the Bitcoin Cash network are secure and cannot be altered.
How Many Bitcoin Cash (BCH) Coins Are in Circulation?
As of the time of writing, there are about 18.7 million BCH coins in circulation, out of a maximum supply of 21 million. BCH employs a halving event every four years like Bitcoin. During these events, the rewards granted to miners are reduced by half, which slows down the creation of new BCH coins and fosters scarcity.
How to choose a Bitcoin Cash wallet?
When choosing a Bitcoin Cash wallet, consider the following:
- Security: Is the wallet provider reputable? Does it offer strong encryption and backup measures?
- Convenience: Is the wallet easy to use? Do youhave access to the wallet from multiple devices?
- Control: Does the wallet give you full control over your private keys?
- Anonymity: Does the wallet provide privacy protection, or it requires personal information?
- Compatibility: Is the wallet created to handle Bitcoin Cash specifically, or can it work with multiple cryptocurrencies?
- Hot Wallet vs Cold Wallet
Some popular Bitcoin Cash wallets include:
- Bitcoin.com Wallet: This wallet supports both Bitcoin Cash and Bitcoin. It has over five million wallets created and offers full control of your money.
- Electron Cash: A simple and secure wallet that allows you to control your own private keys.
- Jaxx: This wallet supports multiple cryptocurrencies, including Bitcoin Cash. It has ShapeShift built in for currency exchanges.
How to Buy Bitcoin Cash?
Below are the general steps to buy Bitcoin Cash:
- Decide on a Cryptocurrency Exchange: Platforms like Coinbase, Binance, and Kraken support Bitcoin Cash. Choose an exchange based on its reputation, fees, and supported countries.
- Create an Account: Sign up on the chosen platform and verify your identity (KYC process).
- Deposit Funds: Deposit funds into your account using the method supported by the platform, such as bank transfer or credit cards.
- Buy Bitcoin Cash: Purchase BCH with your deposited funds.
Remember to review the exchange’s privacy policy and ensure it aligns with your comfort level regarding personal data handling.
How to Sell Bitcoin Cash?
To sell Bitcoin Cash, the following steps are typically involved:
- Choose a Cryptocurrency Exchange: Pick an exchange that supports BCH and has a favourable fee structure.
- Deposit Bitcoin Cash: Transfer your BCH from your wallet to the exchange.
- Sell Bitcoin Cash: Choose the trading pair (e.g., BCH/USD, BCH/BTC) and execute your sell order.
- Withdraw Funds: Once sold, withdraw your funds to your bank account or digital wallet.
Remember to consider your tax obligations when selling cryptocurrencies.
What’s the Difference Between Bitcoin and Bitcoin Cash?
Bitcoin and Bitcoin Cash share many similarities due to their common origin. However, they differ in key aspects:
| Factor | Bitcoin | Bitcoin Cash |
| Block Size | 1MB | 32MB |
| Scalability | Lower | Higher |
| Transaction Duration | Slower | Faster |
| Transaction Fee | Higher | Lower |
The table above showcases factual differences between Bitcoin and Bitcoin Cash.
Additional notable difference between Bitcoin and Bitcoin Cash is that Bitcoin can be used for certain services and assets for which Bitcoin Cash cannot be used, like car insurance or crypto-based mortgages, which some companies offer at specific mortgage rates.
What is the Future of BCH?
The future of BCH depends on its adoption as a medium of exchange. The low transaction fees and high transaction speed position Bitcoin Cash well for becoming a popular method for digital payments. However, competition from other cryptocurrencies and regulatory challenges might impact its growth.
Bitcoin Cash aims to replace traditional payment systems like Visa and to become the go-to method for online transactions. One of the key elements of Bitcoin Cash’s strategy is to raise awareness and educate consumers and businesses on the personalised benefits of adopting digital currencies for everyday transactions. The BCH community believes that widespread adoption of Bitcoin Cash could lead to faster, more secure, and more affordable transactions than traditional banking and online money transfer services currently offer.
However, Bitcoin Cash’s future success is not guaranteed. Like other cryptocurrencies, Bitcoin Cash faces challenges like regulatory scrutiny, competition from other cryptocurrencies, and issues with scaling and maintaining efficiency.
