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What Is Bitcoin Cash?
Bitcoin Cash (BCH) is a cryptocurrency that was created and launched to bring decentralization back to cryptocurrency. It is the result of a 2017 Bitcoin “hard fork,” which occurs when an existing blockchain splits into two. Bitcoin Cash enables more transactions per block than Bitcoin, which reduces fees and transaction times.
Bitcoin Cash is designed to be used as a cheap payment system, much in the way Bitcoin was designed to be originally. Transaction fees are generally lower, and confirmation times are significantly less than Bitcoin’s, generally within seconds.
Learn more about Bitcoin Cash and how it differs from Bitcoin.
Key Takeaways
- Bitcoin Cash was created due to scalability issues with Bitcoin’s blockchain, enabling larger blocks of up to 32 MB, which facilitates faster transactions with lower fees compared to Bitcoin.
- While Bitcoin Cash shares technical similarities with Bitcoin, such as the consensus mechanism and a capped supply of 21 million coins, it does not incorporate the Segregated Witness (SegWit) feature.
- Bitcoin Cash’s community aims to maintain it as a decentralized and affordable payment system, though its recent rise in market value has shifted its perception towards being more of an investment asset.
- Bitcoin Cash can be obtained through exchanges or mined in the same way as Bitcoin; however, the mining process is dominated by large firms, making it less feasible for individual miners without significant resources.
- Despite not achieving widespread consumer acceptance as a payment system, Bitcoin Cash continues to be traded actively, demonstrating resilience through various market conditions.
The Evolution of Bitcoin Cash: From Hard Fork to Present
Bitcoin’s blockchain faced scalability issues and couldn’t handle the rising number of transactions. This was mainly due to the 1MB block size limitation for Bitcoin blocks. Transactions were delayed because blocks couldn’t handle the network’s increased transaction volume.
Bitcoin Cash was created in 2017 when developers disagreed on the route Bitcoin should take to address emerging issues with the blockchain. Transaction fees continued to rise between 2009 and 2016. By June 2017, fees exceeded $5 and surged to over $54 by December.
Maintained by active developers, Bitcoin Cash emerged as an alternative to Bitcoin, which they viewed as more of an investment than a payment system. It was designed as a peer-to-peer payment system that removes regulatory authorities and other third parties from financial transactions, but it had become something else.
Fast Fact
Bitcoin Cash’s blockchain is Bitcoin Cash Node.
Comparing Bitcoin Cash and Bitcoin: Key Differences and Similarities
Bitcoin Cash increased the size of blocks to have a limit of 32 MB, enabling more transactions to be processed per block.
Bitcoin Cash differs from Bitcoin by not using Segregated Witness (SegWit),, a solution for more transactions per block. SegWit removes witness signatures from certain areas to increase the number of transactions a block can store.
The average number of transactions per block on Bitcoin at the time Bitcoin Cash was proposed was between 1,000 and 1,500.
Yes, Bitcoin is available for trading.
Acquiring Bitcoin Cash: Exchange Options and Mining Insights
Bitcoin Cash is listed on exchanges like Binance, Coinbase, Kraken, KuCoin, and more. Because it is a Bitcoin fork, it is mined the same way. It can be mined on personal computers with dedicated GPUs, but this approach has some caveats.
Similar to Bitcoin and other minable cryptocurrencies, large mining firms and pools dominate Bitcoin Cash mining. Pools improve your chances of earning block rewards, though rewards are shared. Depending on the pool’s size and the work contributions of other members, your shares could be pretty small.
You can also purchase a machine called an application-specific integrated circuit (ASIC) miner that can mine BCH. These machines are much faster at mining than personal computers, but they cost several thousand dollars new. You can find used ones for much less, but their speeds are generally lower, and it’s hard to tell what kind of condition they are in.
Bitcoin Cash Concerns: Challenges and Community Perspectives
Bitcoin Cash community believes that it must remain decentralized and affordable so it could be used as the “best money in the world.” In the shorter term, the project has focused on providing a fast, reliable, low-fee network, as well as “establishing a professional mining node that listens to feedback and delivers measurable improvements.”
Contrary to its developer’s goals, BCH appears to have increased in popularity with investors, ranking #25 by 24-hour trading volume and #16 by market cap. Its price on May 15, 2024, was $445, more than a 270% increase from its price of $188 one year before. While this might be good news for BCH investors, it might not be such a good development for a community that wanted a cryptocurrency to remain a payment method.
Is Bitcoin Cash Worth Having?
It depends on your market outlook, risk tolerance, and investing preferences. Bitcoin Cash experienced a significant increase in price through mid-2024, but that doesn’t mean it will continue.
Is It OK to Invest in Bitcoin Cash?
It’s important to remember that all cryptocurrencies experience volatility, so you have to accept the risk of large losses along with the possibility of large gains. It’s best to speak to a financial advisor about your financial circumstances to see if BCH is suitable for your portfolio.
What Is the Downside to Bitcoin Cash?
Like many other forks or cryptocurrency projects, Bitcoin Cash has a small network (compared to Bitcoin and some others), which makes it more susceptible to attacks. However, this vulnerability is one all blockchains suffer from until they become economically unfeasible for attackers to target.
The Bottom Line
Bitcoin Cash is an altcoin that forked from Bitcoin in 2017. It was created to speed up transaction times and maintain a position as a payment method. While not the most popular cryptocurrency, it has outlived many market ups and downs.
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