Bitcoin was the first cryptocurrency, but it’s not the only currency that has had “Bitcoin” in its name. In fact, there have been several. Bitcoin Cash (BCH) is both a payment network and a cryptocurrency. It was initially created as a result of a hard fork with Bitcoin in December 2017 to improve the scalability of Bitcoin. This article will discuss what Bitcoin Cash is, its history, and the difference between Bitcoin (BTC) and Bitcoin Cash (BCH).
What is Bitcoin Cash?
Bitcoin Cash (BCH) is a peer-to-peer digital cryptocurrency that was created to address some issues with Bitcoin. It was created in 2017 by Bitcoin miners and developers that were concerned with the speed and scalability of Bitcoin. Bitcoin Cash was considered a continuation of Bitcoin, which aimed to increase the number of transactions that could be processed.
Bitcoin Cash, like Bitcoin, is considered an asset or a store of value and according to some people, it is regarded as a commodity. Its total supply is capped at 21 million BCH, the same as Bitcoin.
Important To Remember
Although Bitcoin Cash is a fork from Bitcoin, it is important to note that Bitcoin Cash wallet and Bitcoin wallet can’t be used interchangeably. Doing so could result in losing all of your funds.
How did Bitcoin Cash come about?
Bitcoin Cash first came about as an “upgrade” to Bitcoin. Bitcoin has slow processing times compared to traditional payment networks such as Visa. This also means it has scalability problems. The increased attention and global adoption of Bitcoin have resulted in significantly more users. As this happens, transaction confirmation time has increased. The Bitcoin network can only process seven transactions per second, which leads to a number of unconfirmed transactions.
This issue caused a rift between the miners and developers in the Bitcoin communities and hence Bitcoin Cash was created. To put it simply, Bitcoin Cash was created to solve the problems and limitations of Bitcoin.
In the business world, when a company splits off a section of its business to create a new independent company, this is called a spin-off. In cryptocurrency, this is referred to as a “hard fork”. Bitcoin Cash came about as a result of a Bitcoin hard fork. The way this happened was a part of the Bitcoin community made an official proposal to increase the block size of the Bitcoin network. This was rejected by the majority of the Bitcoin Core miners, and as a result, a new version of the blockchain was created, along with a new cryptocurrency. After the fork, anyone who had Bitcoin received an equal amount in Bitcoin Cash.
Did You Know?
After the Bitcoin hard fork of 2017, the name of the new coin created actually began as Bitcoin Unlimited, before Bitcoin Cash was ultimately decided on.
Bitcoin Cash SV
In November 2018, a year after the original hard fork from Bitcoin, Bitcoin Cash also underwent its own hard fork. The fork was due to a rift between the Bitcoin Cash community and the introduction of smart contracts. The result of the fork birthed Bitcoin Cash SV (Satoshi Vision) and Bitcoin Cash ABC. Craig Wright led the team behind the creation of Bitcoin Cash SV. The team believes in the roadmap of Satoshi and rejects the idea of smart contracts into its blockchain.
Bitcoin vs Bitcoin Cash: what’s the difference?
One of the main differences between Bitcoin vs. Bitcoin Cash is the philosophical definition. There is some disagreement on what exactly Bitcoin should be used for. A section of the Bitcoin core community believes it should be regarded as a store of value and considered as “digital gold”. Another section thinks it should be used for transactional purposes as a medium of exchange. The team behind Bitcoin Cash firmly believes that it should be used as a medium of exchange or currency.
Transaction fees
Another difference between the two digital cryptocurrencies is that the Bitcoin Cash transaction fee is cheaper than that of Bitcoin. The fee Bitcoin Cash charges per transaction is less than $0.30, while the fee for a Bitcoin transaction is often $10 or more.
Interesting Fact
During the bull runs of 2017 and 2021, the average Bitcoin transaction fee soared to over $50 USD!
Transaction confirmation times
In the volatile crypto market, waiting a few minutes for a transaction could be costly. Because miners have to verify every single transaction and it also has to go through a series of confirmations, the process can take between one minute and an hour. However, the average time for a Bitcoin transaction is 10 minutes. Using a lower transaction fee can get your transaction delayed by miners.
Users do not need to wait 10 minutes for a transaction to go through with Bitcoin Cash, which has a faster confirmation time than Bitcoin. This is the main reason why Bitcoin Cash was created.
Transactions per second (TPS)
After the fork, Bitcoin Cash blocks were increased 8x the size of Bitcoin, which is 1 megabyte (MB). This means BCH has an 8 MB block size. A year later, the block size of BCH was multiplied by four again to 32MB. This much larger block size allows for faster transactions than the Bitcoin network. The Bitcoin network can only process seven transactions per second. To put it in perspective, a credit card company like Visa processes over 1500 transactions per second.
An increased block size means Bitcoin Cash can process more transactions per second than Bitcoin. It is clear that Bitcoin Cash is faster and cheaper than Bitcoin, yet it is yet to gain the widespread public attention that Bitcoin has.
How to buy Bitcoin Cash (BCH)?
You can buy Bitcoin Cash from most big cryptocurrency exchanges. Swyftx is a popular cryptocurrency exchange in Australia and New Zealand where users can buy Bitcoin Cash with low fees and store it in their personal crypto wallet.
Summary
Bitcoin Cash is a cheaper and faster version of Bitcoin that was created as a result of a Bitcoin hard fork. Despite many advantages, Bitcoin Cash has never had anywhere near the number of users or mainstream adoption as Bitcoin has. This article has explored what Bitcoin Cash is, how it came about, and how it differs from Bitcoin. If you’d like to learn more about soft and hard forks or anything else crypto or blockchain-related, Swyftx Learn has lots of great resources.
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