What is Bitcoin Cash?
There are a number of currencies in this world used for trading amenities. Rupee, Dollar, Pound Euro, and Yen are some of them. These are printed currencies and coins and you might be having one of these in your wallet. But bitcoin is a currency you can not touch, you can not see but you can efficiently use to trade amenities. It is an electronically stored currency. It can be stored in your mobiles, computers, or any storage media as a virtual currency. Bitcoin is an innovative and digital payment system. It is an example of a cryptocurrency and the next big thing in finance.
What is Bitcoin Cash?
- Bitcoin Cash is a type of fork of Bitcoin which has lower transaction costs than Bitcoin. Bitcoin Cash was originated in 2017 and is split into two different cryptos – Bitcoin Cash and Bitcoin SV.
- The main purpose of creating Bitcoin Cash was to make a block of larger size in the Blockchain of 8 MB to 32 MB for acquiring more transaction records into a single block than the original Bitcoin.
- Later in November 2018, Bitcoin Cash went to a fork itself creating- Bitcoin Cash ABC and Bitcoin SV.
- Although Bitcoin Cash is an improved version of the original Bitcoin, both of them share common many technical properties. Their supply volume is capped at 21 Million Bitcoins. Both of them use the Proof-of-Work mechanism for tracking to mine new Bitcoins and generate transactions.
History Of Bitcoin Cash
- In 2010, Bitcoin has started its Blockchain which was highly malicious and vulnerable to attacks by hackers. At that time, its transaction fees were also very less in cents and it could store transactions records in blocks up to 100 KB only.
- Also, the time to mine new Bitcoins was quite large as compared to other cryptocurrencies of 10 minutes. So, the original Bitcoin was lagging in every department.
- This limitation of Block size and mining time helped to somehow enhance the security of its Blockchain.
- But, by 2015, the average block size of its blockchain grew up to 600 K due to which Miners tend to maximize their profits by charging more transaction fees, thereby decreasing the efficiency of the system.
- Due to so many problems, folks decided to create a new fork in Bitcoin in August 2017 – Bitcoin Cash. Bitcoin Cash made its debut at an amazing price of $900.
- Later in November 2018, Bitcoin Cash had its two forks – Bitcoin SV and Bitcoin Cash ABC.
Bitcoin Cash Core Features
The most important features of Bitcoin Cash are:
- It is completely decentralized and works with the help of distributed Ledger Blockchain system. There is no third party involved in the transaction process.
- All the transactions are carried out securely and transparently. All the transaction records are available for everyone to see and hence, it eliminates the possibilities for financial frauds and attacks.
- All the transactions follow a certain set of protocols that are set up by the Blockchain. No one can manipulate the transaction processes.
- Similar to the original Bitcoin, the maximum supply volume of Bitcoin Cash is capped at 21 Million Bitcoins.
- Bitcoin Cash favors low transaction fees irrespective of the locations around the world.
- Similar to Bitcoin, it also uses a Proof-of-Work mechanism for processing the transactions, by adding new blocks to the Blockchain. It also helps to enhance the security of the Blockchain.
- Once the transaction records are made, no one can change them after the transaction is processed from the Blockchain.
What is Bitcoin Cash Used For?
- One can use Bitcoin Cash for storing long-term values. In the decentralized network, the members tend to store the transaction records inside the blocks since the 21 Million supply volume remains constant throughout.
- Bitcoin Cash is a better way of transfer of currency than normal Cash or even Credit Cards.
- They charge about a penny of transaction fees and we don’t require an asset even for it. The process takes less than seconds and it can be used for even cross-border trade.
- Unlike other national currencies, it provides security during the transaction along with censorship, devaluation due to inflation, confiscation of currencies.
How Bitcoin Cash is Different From Bitcoin?
The original Bitcoin is different from Bitcoin Cash in the following ways:
- Due to the slow speed of transactions in Bitcoin, Bitcoin Cash was created in December 2017 by the hard fork technique to increase the number of transactions that can be initiated per second.
- The main reason behind this movement was to enhance the future of cryptocurrency and to enhance its scalability. Therefore, Bitcoin Cash (BCH) is a completely new cryptocurrency and has a whole different blockchain.
- By using the Hard Fork Technique, Bitcoin Cash had an increased block size of about 8 MB – 32 MB to provide faster transaction rates per second and provide transaction details within each block.
- Bitcoin Cash is a peer-to-peer blockchain cryptocurrency that is completely decentralized and requires no third party to initiate it.
- Bitcoin Cash has a completely different hash algorithm which finally eliminates the possibility of transaction failures. Due to the Fork technique, the blockchains exist simultaneously without any disruption.
- Bitcoin Cash on average can process about 116 transactions per second while Bitcoin can only process only 7 transactions per second due to its smaller block size.
Challenges To Bitcoin Cash
- In 2017, the supporters of BCH were divided into two halves. The Bitcoin Cash supporters wanted to use it as a medium of exchange in goods and commerce, while others just wanted it to value – storing purpose.
- So, in 2018, it split to form another crypto – Bitcoin SV.
- The split originated as a clash between the two Bitcoin cash camps.
- The first party was supported by Roger Ver and Jihan Wu of Bitmain, who wanted to maintain its block size to 32 MB. The second party was supported by Steven Wright and Calvin Ayre who formed Bitcoin SV, which had a block size of 128 MB.
Bitcoin Cash – Ease of Use
- Bitcoin Cash (BCH) has the lowest transaction fees of about $0.28.
- The transaction fees apply when we transfer the cryptocurrency to someone other’s address. Due to this reason, Bitcoin Cash is the most popular cryptocurrency.
- The reason for its low transaction costs is that the block size can store vast transaction details due to its large size.
- Also, Bitcoin Cash (BCH) is capable of 116 transactions per second while the original Bitcoin can process only 7 transactions per second. Due to the high speed of BCH, it is more popular among people for faster, secure, and transparent transactions in our daily lives.