Bitcoin Cash is a cryptocurrency that was created due to the hard fork from Bitcoin in 2017. The main reason for the split was the problem of Bitcoin’s scalability and the community’s urge to increase the number of transactions processed per second by the Bitcoin network.
In this article, we will discover similarities and differences between Bitcoin and Bitcoin Cash, talk about BCH scope of application, technical features and advantages, and explore how and where to store and exchange Bitcoin Cash. We are also going to discuss the future of this project and its impact on the global crypto community.
Bitcoin Cash vs. Bitcoin
On August 1, 2017, a group of Bitcoin activists, developers, and crypto enthusiasts initiated a Bitcoin hard fork, creating a new digital currency – Bitcoin Cash. They modified the original code and started a new branch of blockchain.
Technically, BCH is a Bitcoin’s spin-off, an alternative version that is similar enough but has its own independent blockchain and plays by its own rules. BCH blocks can not be added to the BTC blockchain. Bitcoin and Bitcoin Cash share identical transaction history up till the 1st of August 2017, but two entirely different ledgers after this date.
The key difference between BTC and BCH is the size of their blocks. BCH creators believed that the best way to solve the scalability problem was to make each block in the chain larger. They assumed that if more transactions fitted into one block, they would be processed faster. After the hard fork, BCH’s block size reached 8MB, while the BTC’s was 1MB. In May 2018, Bitcoin Cash block size increased even more, and at the time of writing (August 2020), it equals 32MB.
Bitcoin developers took a different approach to the problem. They came up with a SegWit protocol – a way to separate block’s signature data from the transaction information. This method allowed to store signature data outside of a block, thus optimizing space inside of a block and letting more transactions fit into one block. Currently, Bitcoin blockchain can process 7-10 transactions per second.
Most crypto experts would agree that this protocol didn’t manage to solve the problem, but postponed a potential final solution to it. Some argue that after the hard fork, Bitcoin remained a mere investment instrument, while Bitcoin Cash became a real means of payment.
How Does Bitcoin Cash Work?
Bitcoin Cash is based on the same technology as Bitcoin, including Proof of Work consensus and SHA-256 mining algorithms. It undergoes halvings every four years, and has a supply limit of 21 million coins. Here is a beginner’s guide for Bitcoin Cash mining.
The first block to be generated both in Bitcoin and Bitcoin Cash blockchain was block number 478,559. All the previous blocks generated before the hard fork are the same for the two digital currencies. During the split, all Bitcoin owners had an opportunity to become owners of an equivalent amount of Bitcoin Cash coins.
The application scope of Bitcoin Cash is limited to two main functions: a payment method and an investment opportunity. You can buy goods and pay for services online using Bitcoin Cash, as well as send, receive, and store BCH. It’s worth mentioning that at the moment, very few online platforms accept Bitcoin Cash as a payment, but as the potential of the coin grows, there will be more vendors who accept it. There is a wide range of merchants that already work with Bitcoin Cash.
Despite its high volatility, Bitcoin Cash offers excellent investment opportunities and is traded on most exchanges.
Bitcoin Cash Halving
BCH halvings occur approximately every four years, just like Bitcoin. The last Bitcoin Cash halving happened on the 8th of April 2020, when the reward for mining went from 12.5BCH to 6.25BCH per block. AntPool is believed to be the mining pool that found the last block before halving, block height 630.000.
The halving has affected Bitcoin Cash miners all over the world. Many of them had to stop further mining activities, claiming that the new reward, in combination with the current BCH price, would bring their profits close to zero. As mining manufacturers’ gross margin dropped by 10%, many of them unplugged from the Bitcoin Cash network. At the same time, while mining difficulty decreases, the revenue grows for those who manage to stay in the BCH mining ecosystem.
Bitcoin Cash gained 11.2% in price on the day of halving. It didn’t hold long though, dropping from $277.22 to $262 in a matter of hours.
Bitcoin Cash Price Changes
Right after the hard fork, things looked bright for the new cryptocurrency. BCH price rose from $310 on the 1st of August 2017 to $3656 on the 20th of December 2017, which brought the investors more than 1000% of profit in less than half a year. After that spike, Bitcoin Cash price had its fair share of ups and downs but kept being a great investment during 2017.
BCH reached the all-time high in December 2017 at $4.355. The year 2018 proved unfortunate for many cryptocurrencies, and Bitcoin Cash wasn’t an exception: its price dropped dramatically, coming to $75.03 in December 2018. It increased and stabilized during 2019, spiked at the beginning of 2020 at almost $500, and stayed near $300 through the first half of the year.
Crypto users can store Bitcoin Cash in a variety of wallets. Most popular desktop and mobile wallets are Jaxx, Exodus, Electron Cash, Coinomi, and BTC.com. BCH is also compatible with hardware wallets, such as Trezor, Ledger, and KeepKey.
Here is where you can buy and sell BCH:
Bitcoin Cash Future
Bitcoin Cash is the 5th most popular cryptocurrency in the world, according to Coinmarketcap, – not bad for a spin-off!
There is an opinion among members of the crypto community that Bitcoin Cash will replace Bitcoin and become the number one global digital currency. But on one condition: if Bitcoin’s active developers don’t find a permanent solution for the scalability problem. Basically, the future of BCH depends on the decisions that other coin’s development team would take.
Trying to predict if a cryptocurrency is going to strive or not is a bit like peering into a crystal ball, but some people do it better than others. Roger Ver, a renowned crypto investor (also called “Bitcoin Jesus”), supports Bitcoin Cash time and again in his tweets and interviews, predicting a great future for the young cryptocurrency.
In one of his recent interviews, Ver claims that he is “optimistic about Bitcoin Cash” and feels like in 2011, when he first invested in Bitcoin. “Bitcoin Cash could potentially go up 500 or a 1000 times from where it is today. I don’t think BTC is ever going to go up,” – says Ver.
You can find more information about BCH future technical development in its roadmap.