What Is Bitcoin Cash?
Bitcoin Cash: You may have heard about the term Bitcoin. However, it might be a little confusing to many when they hear the word Bitcoin Cash. In this section, we would provide you with all the information you need to know about what Bitcoin cash.
It was created to be a “better” version of Bitcoin. By better, it was created to solve a problem which its initiators thought Bitcoin was facing. This is the problem of scalability. The block size of Bitcoin upon creation was limited to 1 MB something which Bitcoin cash initiators and evangelists believed should be increased to 8 MB.
What is block size and why is it Important?
Blocks are batches of transactions which are confirmed and then shared on the public ledger called blockchain. A higher block size is important because it increases the transaction processing speed but also increases the number of transactions that the network can process.
It was for this reason that Bitcoin Cash was created in August of 2017 by some participants in the Bitcoin community so that it could solve this problem given the fact that as of then, other traditional companies like PayPal processed more transactions than bitcoin.
Interestingly enough, the community members were eager to see BCH overtake BTC and become the real Bitcoin. Bitcoin Cash evangelists like Roger Ver was at the forefront of this movement.
What did this result to?
Following much deliberation between, Segregated witness, Segwit2x and Bitcoin unlimited, the result of this was a Hard Fork.
- Segregated Witness: In order to solve the above problem Bitcoin faced, it was suggested to store some of the information outside the blockchain in order to free some space so as to reduce confirmation time.
- Segwit2x: Suggested that information is stored outside the blockchain but also an increase in Bitcoin’s block size to 2 MB.
- Bitcoin Unlimited: Bitcoin unlimited on the other hand, was intended to do away with block size limit and this way, processing speed will be increased.
All the above solutions were seen to contain flaws some which were included:
- Bitcoin becoming centralized as the community thought this will served the interestest of bigger miners and disadvantageous for smaller miners.
- Others thought this will make Bitcoin more of an investment rather than a payment system.
- Finally, some thought it will serve as a temporal solution.
The birth of Bitcoin Cash
A hard fork was, therefore, the solution to the block size problem. During a conference in Arnhem, the Netherlands some developers implemented the Bitcoin Cash protocol which therefore meant a split from Bitcoin was to occur, hence a fork.
on August 1, 2017, Bitcoin Cash forked out of Bitcoin core.
So what is Bitcoin Cash?
According to the official BCH website;
“Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.”
- It is faster than Bitcoin
- Can process more transactions than Bitcoin
- Bitcoin Cash is 8 MB (later upgraded to 32 MB)
Due to increase market acceptability of the coin, it had to further fork on May 15, 2018. With this fork, the block size of BCH increased from 8MB to 32 MB which led to the introduction of a more sophisticated smart contract, asset creation, and expansion of its time stamping.
Bitcoin cash is said to becoming increasingly acceptable for commercial purposes with several retailers now accepting BCH. Also, Coinbase (cryptocurrency’s largest exchange) had to add BCH to its supported coins. An increasing number of hedge funds also now include Bitcoin Cash in their holdings and it also ranks among the top cryptocurrencies in terms of market capitalization.
The Bitcoin community also remains divided as those for BCH continue to advocate for BCH and keep giving their arguments as to why Bitcoin Cash should be the main Bitcoin. However, some Bitcoin core advocates argue that the increase in block size to 8 MB and now to 32 MB is not necessary as Bitcoin has not even attained the level where such upgrade is useful.
Nonetheless, the slow Bitcoin transactions saw sending of Bitcoin from one address to another take up to 4 days with options for a faster transaction resulting higher transaction fees. The lightning network was then introduced in order to solve the Bitcoin scalability problem.
It is therefore left to be seen if BCH will achieve its goal of becoming the real Bitcoin.
How to own Bitcoin Cash
Just like most other Cryptocurrencies, Bitcoin cash can be obtained by either mining them, buying them from an exchange or getting them as a payment of a good or service.
Mining Bitcoin Cash: Mining Bitcoin cash entails solving complex mathematical puzzles. Upon successfully mining a transaction block, you will obtain Bitcoin Cash. The reward changes from time to time but it currently stands at around 13 BCH per block. However, given the competitive nature of mining, it is almost impossible to mine a full block. Therefore, after a block has been created, all participants receive a slice of the of the reward and depending on the power of your mining equipment, you are being rewarded accordingly. There are also some several software with which you can mine Bitcoin Cash.
Buying Bitcoin Cash: Like any other cryptocurrency, BCH can also be bought via an exchange. Many exchanges now awaydays accept direct bank purchases and some even accept credit cards. Some exchanges where Bitcoin Cash can be bought include; Coinbase, Bittrex, and Bitfinex.
Upon buying Bitcoin Cash, you will receive a wallet address where your BCH will then be deposited in. This also known as a public key and this address is equitable to your bank account details and can be shared with others as this is needed if someone needs to send you BCH.
Payment of goods and services: As discussed above, many retailers now accept Bitcoin Cash as a mean of payment. This means if you have a service or product you are offering, with the use of platforms such as Coinbase commerce, you can be able to add BCH as a payment method and receive BCH. You can also decide to directly receive payments for your goods or service to your BCH address if you have a wallet.