What is Bitcoin Cash (BCH)?
Bitcoin Cash is a fork of Bitcoin which launched in August 2017. It is essential for new to market investors to understand that Bitcoin Cash.
Bitcoin Cash is a fork of Bitcoin which launched in August 2017. It is essential for new to market investors to understand that Bitcoin Cash is not the same as Bitcoin, nor is it an official upgrade. Bitcoin Cash (BCH) was created to provide an alternative to Bitcoin with lower fees and faster transaction processing times.
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When Bitcoin launched in 2009, its creator Satoshi Nakamoto placed a 2MB limit on blockchain transaction sizes. This means that transactions across the Bitcoin blockchain are bundled into 2MB blocks before being processed. When Satoshi Nakamoto imposed 2MB block size limits, 2MB was more than enough to allow for instant, fee-free transaction processing. However, today this is no longer the case.
By 2017, Bitcoin had increased exponentially in popularity. More transactions and network traffic, therefore, meant that 2MB block sizes were no longer sufficient. Some transactions stated taking up to 24-hours to confirm, with others attracting fees of $5 – $40.
To address this problem, some Bitcoin developers proposed increasing block sizes to 8MB. Others suggested using a protocol called Segwit, to reduce the amount of data in transaction blocks, while keeping sizes at 2MB. Sadly, by August 2017, no consensus had been reached. Some developers, therefore, decided to clone the Bitcoin blockchain, before releasing their clone as a standalone cryptocurrency, known today as Bitcoin Cash (BCH).
Bitcoin Cash Vs. Bitcoin
Bitcoin today still has a 2MB transaction block size. However, Bitcoin Cash launched with an 8MB block size, which has since been increased to 32MB. Bitcoin Cash is also noticeably different to Bitcoin, thanks to an update in November 2018, which added Smart Contract capabilities to the Bitcoin Cash blockchain.
Bitcoin Cash & The November 2018 Hard Fork
Bitcoin Cash initially came under fire in 2017. Specifically, due to co-opting of Bitcoin’s brand identity. The controversy died down in 2018, however, in November 2018, Bitcoin Cash was forked once more, this time to become two separate coins, Bitcoin Cash and Bitcoin SV.
Bitcoin Cash ABC and Bitcoin SV Key Differences
Initially, the November 2018 Bitcoin Cash hard fork was announced as a routine upgrade. Bitcoin Cash would split into two coins, Bitcoin Cash ABC (meaning Adjustable Blocksize Cap), and Bitcoin SV (SV meaning Satoshi Vision).
Bitcoin Cash ABC would feature a 32MB block size and smart contract capabilities. Bitcoin SV, by comparison, would feature a 128MB block size. After forking, it was then planned to let Bitcoin Cash miners decide which Bitcoin Cash version to support. However, this didn’t go to plan.
The Bitcoin Cash Hash War
As part of a sudden twist after forking, Bitcoin SV creator Craig Wright attempted to shore up support for Bitcoin SV by paying miners to mine the new coin. Bitcoin Cash then responded by paying miners to mine their coin version, and markets quickly descended into confusion.
The Future of Bitcoin Cash ABC and Bitcoin SV
As of 2019, few now debate the merits of Bitcoin Cash Vs. Bitcoin. The original Bitcoin continues to stand firm as its own brand. However, fighting and confusion still surround Bitcoin Cash and its new adversary Bitcoin SV. Both coins do have their merit. However, when investing in cryptocurrency in 2019, it is essential to understand that Bitcoin, Bitcoin Cash ABC, and Bitcoin SV, are all distinctly different forms of cryptocurrency.
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated August 29, 2022