Quick Facts

Approximate Market Cap$6,924,177,721
Year Established2017
FounderSatoshi Nakamoto
Symbol/AbbreviationBCH
UtilityAsset

Bitcoin (BTC) is the most recognized cryptocurrency built on blockchain. 

Bitcoin’s blockchain uses a financial ledger structured in a sequence of different blocks. Each of them contains transaction data. By creating new blocks, the blockchain expands.

As Bitcoin’s popularity has grown, so has the issue of transaction scalability. Several solutions to the problem occurred. In Aug. 2017, the Bitcoin system split up into the original Bitcoin (BTC) and Bitcoin Cash (BCH).

What is Bitcoin Cash – Definition

Bitcoin Cash (BCH) is a decentralized, peer-to-peer digital currency and payment network. It’s supported by an open-source blockchain protocol. 

The development of Bitcoin Cash was an attempt to address Bitcoin’s network scalability. The Bitcoin Cash solution allowed more transactions to fit inside a single block.

Like Bitcoin, BCH has similar features that make it a cryptocurrency and payment network: 

  • Decentralized

Bitcoin Cash runs on a P2P blockchain protocol. This eliminates the need for a central authority.

  • Permissionless

Anyone can participate in the network.

  • Open-source

Bitcoin Cash was hard forked from Bitcoin’s open-source software. It is also free for anyone to access, contribute, or fork. 

  • Pseudo-anonymous

Public wallet addresses are not directly linked to any identifying personal information.

  • Finite supply

Like Bitcoin, Bitcoin Cash has a maximum supply cap set at 21 million BCH. It is also equipped with a disinflationary supply mechanism.

Pros and Cons

Pros

  • Scalable
  • Fast and cheap transactions
  • Listed on major exchanges

Cons

  • Decentralisation concerns
  • Not adopted widely
  • Less tradeable

The History

On January 3, 2009, the first Bitcoin block was mined. Since then, the asset’s popularity has skyrocketed. Yet, Bitcoin is still troubled by scalability concerns and lengthy transaction delays. This is where Bitcoin Cash enters the scene.

Bitcoin Cash came in 2017 as a response to Bitcoin’s processing speed problems. It is a Bitcoin blockchain hard fork. This indicates that the network “divided itself” in two at a certain block.

Many debates ensued over potential solutions to enhance transaction throughput and reduce costs. As a result, BTC and BCH handle digital signature storage in two distinct ways:

  • Bitcoin’s Off-Chain Solution

The BTC network introduced Segregated Witness (SegWit) and the Lightning Network as soft forks. SegWit withdrew transaction information from the main blockchain and stored it externally.

  • Bitcoin Cash’s On-Chain Solution 

Developers wanted to align more closely with Nakamoto’s vision. This meant keeping all information, including digital signatures, on the Bitcoin Cash blockchain. 

How Bitcoin Cash Works

By design, Bitcoin Cash is nearly identical to Bitcoin. The two blockchains share the same transaction information until the point of separation.

The main idea behind BCH is to raise the maximum block size in order to handle more transactions than BTC. Despite having differing block size limitations, they feature compatible proof-of-work methods. As a result, miners can easily switch between BTC and BCH mining to increase their profits.

Bitcoin Cash was integrated using software changes. The changes allowed the two networks to exist concurrently and independently of one another. 

But, several software modifications were being made to the Bitcoin Cash protocol. Those modifications differentiate it from Bitcoin.

  • Larger block sizes;
  • Addition of hash signature;
  • Adjustable level of difficulty;
  • Increased mining reward cadence.

Advantages & Disadvantages

Advantages

Scalability

Bitcoin Cash’s development team made improvements to make it more scalable. This implies that more persons may carry out transactions and payments simultaneously.

Highly efficient

Bitcoin Cash can register more transactions within every block. The transactions are faster and at a smaller price than when using Bitcoin.

Easy to acquire

The native currency of Bitcoin Cash, BCH, is listed on all major exchanges. This promotes widespread acceptance and increases its investment potential in the crypto space.

Disadvantages

Level of decentralization

There are some concerns about the dominance of mining pools in the Bitcoin Cash network. With bigger block sizes, fewer node operators may have the capacity to run BCH software. This might increase the danger of greater centralization.

Low Adoption

Compared to Bitcoin, Bitcoin Cash has considerably lower widespread adoption and use.

Trading

BCH has considerably fewer trading pairs than BTC. This makes it less tradeable than Bitcoin.

Bitcoin Cash in the Global Crypto Market

BCH is one of the most well-known Bitcoin hard forks that have gained popularity in the digital currency industry. Yet, it now stands on its own. 

When it comes to the future development of cryptocurrencies, BCH is unquestionably creating its own position. Today BCH is one of the largest cryptocurrency networks in terms of market cap. 

BCH has demonstrated consistent persistence in the face of adversity. That’s why it is impossible for investors to ignore the sign that it can live beside Bitcoin.

FAQ

Is BCH fast?

The Bitcoin Cash infrastructure can process a lot more transactions per second than the Bitcoin system.

Who created BCH?

The Bitcoin Cash split was the result of cooperation between several individuals and development teams. its beginnings may be traced back several years before 2017.

Is BCH centralized?

No. The Bitcoin Cash network has no single point of control that may be misused or hacked.