What is Bitcoin Cash (BCH)? The Peer-To-Peer Electronic Cash
Take a closer look and learn all about Bitcoin Cash (BCH), how it works, and its potential impact to the future of finance.
In the world of cryptocurrencies, Bitcoin Cash (BCH) has emerged as a prominent digital currency. Bitcoin Cash is a decentralized cryptocurrency that aims to provide fast, secure, and low-cost transactions.
- 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.
What is Bitcoin Cash?
Bitcoin Cash (BCH) is a cryptocurrency that was created as a result of a hard fork from the original Bitcoin (BTC) blockchain in August 2017.
It was designed to address certain limitations of Bitcoin, primarily related to scalability and transaction fees.
Bitcoin Cash operates on the same principles as Bitcoin but with a larger block size, allowing for more transactions to be processed at lower fees.
History of Bitcoin and Bitcoin Cash
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).
New to blockchain? Read our intro on blockchain technology.
How does Bitcoin Cash Work?
Bitcoin Cash functions on a decentralized peer-to-peer network, similar to Bitcoin.
It utilizes blockchain technology, which is a public ledger that records all transactions made using the currency. Miners secure the network by validating and adding new transactions to the blockchain.
Key Features of Bitcoin Cash:
- Increased Block Size: Bitcoin Cash has a larger block size limit of 32MB (compared to Bitcoin’s 1MB), which enables more transactions to be processed per block, leading to faster and cheaper transactions.
- Low Transaction Fees: Due to the larger block size, Bitcoin Cash can accommodate a higher volume of transactions, resulting in lower fees compared to Bitcoin. This makes it more suitable for everyday transactions.
- Faster Confirmations: Bitcoin Cash aims to provide faster confirmations, reducing the time it takes for transactions to be verified and added to the blockchain. This allows for quicker and more efficient payments.
Use cases of Bitcoin Cash (BCH
Below are some use cases for Bitcoin Cash (BCH):
Peer-to-Peer Payments: Bitcoin Cash’s primary use case is as a medium of exchange for everyday transactions. It allows individuals to send and receive funds globally in a fast and cost-effective manner, without the need for intermediaries like banks.
E-Commerce: Bitcoin Cash can be used as a payment method for online merchants. Its low transaction fees and fast confirmations make it suitable for small and large purchases, providing an alternative to traditional payment methods.
Remittances: Bitcoin Cash’s global accessibility and low fees make it a viable option for remittances. Individuals can send money across borders to family and friends, bypassing the limitations and costs associated with traditional remittance services.
Store of Value: Some users view Bitcoin Cash as a store of value similar to Bitcoin. They believe in its long-term growth potential and use it as a digital asset for investment purposes.
Historical overview of the Bitcoin ecosystem
Bitcoin cash has come a long way to get to where it is today. Below are some notable highlights of its journey:
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.
Learn more about crypto forks: Hard fork vs soft fork.
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.
How to Buy Bitcoin Cash (BCH) in NZ?
That being said, what are your own thoughts on Bitcoin Cash?
If you believe in the potential of Bitcoin Cash, and its implications for the digital future of finance, consider investing in BCH tokens.
Here at Easy Crypto New Zealand, we provide over 160+ cryptocurrencies including Bitcoin Cash (BCH).
We are a non-custodial exchange, meaning we deliver your crypto assets directly to your wallet, where you hold true ownership of your assets unlike centralised exchanges.
Bitcoin Cash (BCH) is just one of over 160+ cryptocurrencies that we provide here at Easy Crypto New Zealand. Our collection of crypto assets include:
- NFT Tokens
- Metaverse Tokens
- DEX (Decentralised Exchanges)
- DeFi (Decentralised Finance)
- And many more.
Check the rates: View the latest rates for BCH.
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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 July 11, 2023