Bitcoin Cash (BCH) is a cryptocurrency created in 2017 to address Bitcoin’s scalability challenges and bring decentralization back to cryptocurrency. It resulted from a hard fork in the Bitcoin blockchain, a process that splits an existing blockchain into two separate chains. By enabling a greater number of transactions per block, Bitcoin Cash aims to reduce transaction fees and processing times. Explore the unique aspects of Bitcoin Cash, its origins, distinctions from Bitcoin, availability, and its current success.
Key Takeaways
- Bitcoin Cash originated from a hard fork in the Bitcoin blockchain in August 2017.
- It was designed to allow more transactions in a single block, theoretically reducing fees and transaction times.
- Bitcoin Cash and Bitcoin share several technical similarities, including the same consensus mechanism and a capped supply of 21 million coins.
- In November 2018, Bitcoin Cash split into Bitcoin Cash ABC (later eCash) and Bitcoin Cash SV (Satoshi Vision).
- Bitcoin Cash is still traded today, but at a fraction of Bitcoin’s price, and has yet to achieve widespread consumer acceptance as a payment form.
What Is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency that emerged from a hard fork of the Bitcoin blockchain in 2017. A hard fork occurs when a blockchain splits into two incompatible branches, making radical changes to the network’s protocol. This process requires all nodes or users to upgrade to the new version of the protocol software.
Bitcoin Cash aims to function as a low-cost payment system, similar to Bitcoin’s original vision. Its transaction fees are generally less than $0.01, and transactions confirm significantly faster than those on the Bitcoin network, often within seconds.
The Bitcoin Cash community consists of active developers who view it as a necessary alternative to Bitcoin, emphasizing its role as a peer-to-peer payment system free from regulatory authorities and third parties.
Bitcoin Cash operates on the Bitcoin Cash Node, the main blockchain network for BCH transactions, which can be viewed as the virtual machine powering the network.
Understanding Bitcoin Cash
Bitcoin Cash was created in 2017 due to disagreements among developers about how to handle Bitcoin’s burgeoning scalability issues. Transaction fees escalated between 2009 and 2016 because of the 1MB block size limit, causing long delays and high costs.
When groups of miners and developers cannot agree on necessary updates, a hard fork can ensue, leading to the creation of a new blockchain and digital currency. For Bitcoin Cash’s developers, enlarging block sizes within the blockchain was crucial to lower transaction fees.
Bitcoin Cash faced its forks as well. Bitcoin Satoshi Vision (BSV) split from Bitcoin Cash, and Bitcoin Cash became known as Bitcoin Cash ABC (now eCash) in 2018.
How Is Bitcoin Cash Different From Bitcoin?
Bitcoin Cash proposed enhancing the block size to range between 8 MB and 32 MB, allowing more transactions within each block. At the time, Bitcoin blocks averaged between 1,000 and 1,500 transactions.
Unlike Bitcoin, Bitcoin Cash does not incorporate Segregated Witness (SegWit), another solution to handle multiple transactions, which retains only specific transaction details in a block, not all information.
Through its history, Bitcoin Cash has incrementally increased its block size. It moved to 8MB in 2018 and further grew to 32MB in June 2022.
Is Bitcoin Cash Still Available?
Yes, Bitcoin Cash is currently available for trading. As of May 2023, BCH had slightly over 19.4 million coins in circulation with a market capitalization of $2.2 billion, trading around $114.52. Bitcoin SV ranked 65th with a market cap over $655 million and traded at $33.99 during the same period.
Has Bitcoin Cash Been Successful?
Bitcoin Cash aimed to preserve the vision of being “the best money in the world” by staying permissionless and affordable. Its developers focus on a fast, reliable, low-fee network along with a professional mining node enabling continuous improvement based on community feedback.
Despite these efforts, Bitcoin Cash has faced volatility and has yet to secure broad consumer acceptance as a mainstream payment form.
Why Is Bitcoin Cash Cheaper Than Bitcoin?
By early June 2023, Bitcoin Cash was trading at a fraction of Bitcoin’s price, primarily due to lower demand in the cryptocurrency market. BCH’s cheaper transfer fees appeal to traders, highlighting cost-saving benefits over BTC transactions. It’s essential to remember that both Bitcoin and Bitcoin Cash derive value from collective belief and market demand.
How Is Bitcoin Cash Different From Bitcoin?
Beyond increased block sizes, Bitcoin Cash differs from Bitcoin through its lack of SegWit adoption. Both cryptocurrencies share the same supply cap of 21 million coins and employ identical consensus mechanisms.
Where Can You Buy Bitcoin Cash?
Bitcoin Cash is available on most major cryptocurrency exchanges. You can purchase BCH by setting up a trading account and making an initial deposit to cover the acquisition costs.
Related Terms: cryptocurrency, Bitcoin, blockchain, fork, transactions, decentralization.
References
- Bitcoin.com. “Fork Watch: ‘Bitcoin Cash’ Support Grows as August 1 Draws Near”.
- CoinCenter.org. “Hard Fork”.
- BitcoinCash. “About”.
- BitcoinCashNode. “About”.
- reason. “Bitcoin’s Long-Term Viability Threatened by Block Size Limits”.
- eCash. “About.”
- Blockchain.com. “Average Transactions Per Block”. Click All Time to view 2017 data.
- Bitcoin.com. “What Is Bitcoin Cash?”
- CoinMarketCap. “Today’s Cryptocurrency Prices by Market Cap”.
- SoFi. “What Is Bitcoin Cash (BCH)?”
