What is Bitcoin Cash?
Bitcoin Cash (BCH) is electronic, peer-to-peer cash for the Internet. This digital currency is decentralized which means it needs no third parties or central banks to operate. On August 1st, 2017 Bitcoin (BTC) went through a hard fork and thus Bitcoin Cash was created by a team of miners and developers surrounding the concerns of bitcoin’s scalability. A hard fork is simply a major change in the blockchain protocol that makes previously invalid blocks or transactions valid, or vice versa.
This team of developers for Bitcoin Cash implemented an increase of 8mb from BTC’s original 1mb to the block size to accelerate transaction verification speed. This means regardless of the number of miners supporting the network, the block size increase will speed up transactions and ensure the chain’s survival.
Currently, BTC has very high fees, slow transactions, and is not very scalable. Bitcoin will always continue to maintain its high level of security due to features like private keys, but scalability, network congestion, and high fees are many weaknesses.
It would have been easy to implement this change for regular Bitcoin. There have been years of debate surrounding the implementation of block size increase in the Bitcoin community but they could never reach a consensus. Much of the debate was fueled by the way Bitcoin is supposed to be and that it would follow the philosophy and the tracks of the creator.
Some developers didn’t understand or agree with the original vision that Satoshi Nakamoto had created. This is when those developers copied Bitcoins original code and forked the new coin, Bitcoin cash. Let’s dive further into the ins and outs of Bitcoin Cash.
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Bitcoin can be seen as a first generation cryptocurrency. It was the very first one created with the basic essentials to run on a blockchain. There wasn’t much thought into having Bitcoin transactions be the new medium for payment transactions. We can compare the rate of the transaction of bitcoin to visa. Visa currently processes 150 million transaction per day which equals to around 1,700 per second but their capability is 24,000 per second. Bitcoin processes seven per second which takes around 10 minutes to process. In addition, as the bitcoin network continues to grow, the wait times get longer. There is no change to bitcoin that would allow the process to get faster. This makes scalability and speed the main weaknesses for bitcoin. In July of 2017, mining pools and companies voted on incorporating segregated witness technology, which would make data in each block smaller resulting in faster transactions.
What is Segregated Witness?
Segregated witness is technology that would allow signature data removal from the blocks. This data is then attached in an extended block. About 65% of signature data is said to be processed in each block. With this data removed from the block, this would free up space to add more transactions to the chain.
Bitcoin Cash Pros
- Follows original whitepaper – Bitcoin’s upgrade to Segwit1x and Segwit2x do not follow the original ideas.
- Bitcoin name –Bitcoin was the first mover in the cryptocurrency world. It will always be the most known and therefore be the biggest in market cap. This gives bitcoin cash a chance to also become dominant in the sense that it is the better bitcoin.
- Bitcoin Cash air dropped – The coin was air dropped to all existing Bitcoin holders. This already put bitcoin cash ahead of most cryptocurrencies because of the amount of bitcoin holders there were.
- BCH transactions are cheaper and faster – Increased transaction speeds and reduced fees make bitcoin cash much more favorable over BTC. The chain has increased scalability which means it has a greater chance at becoming globally adopted.
Bitcoin Cash Cons
- Fake bitcoin – Many people, especially new investors, see bitcoin cash as a “fake currency” that is just a copied version of bitcoin in an attempt to increase holders profits.
- Global acceptance – Currently it is still uncertain if bitcoin cash will become globally adopted. Also, merchants who already accept bitcoin will need to start accepting bitcoin cash and if they do not understand why bitcoin cash differs, they might see it as a fake bitcoin.
Where to buy Bitcoin Cash (BCH)
Bitcoin Cash is currently being sold on many exchanges including Binance and Coinbase. On Binance and some other exchanges, the currency symbol is (BCC) which is wrong. They are in the process of changing this. If you need additional help with this, check out my guide on how to buy ALT coins. With Coinbase, you can send BCH funds to and from the platform just as you would with Bitcoin funds.
*NOTE* If you are looking for a cryptocurrency exchange providing the best crypto-to-crypto rates on the market, check out Changelly. Note that exchange times may vary depending on network congestion.
As we move towards the future of digital cash, many people will start to adopt and understand the specifics behind cryptocurrency. As more people start to adopt and research bitcoin cash, they will realize the major advantages of this crypto over bitcoin. Bitcoin cash already has the name going for it, people just need to understand why bitcoin cash is a much better investment and why it can potentially become mainstream adopted.