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- Bitcoin Cash is the Hard Fork of Bitcoin that emerged in August 2017 for accommodating bigger block size in comparison to Bitcoin.
- In spite of their philosophical dissimilarities, Bitcoin and Bitcoin Cash are very similar in technical terms.
- Maximum supply of Bitcoin Cash is 21 Million, of which 18.9 Million are in circulation in the crypto market, at the time of writing.
What is Bitcoin Cash (BCH)?
The crypto asset was created as a hard fork of the father currency of the crypto market, Bitcoin. The size of the blocks was increased by the Bitcoin Cash, increasing the number of transaction processes and the betterment of scalability. BCH had to go through another fork in Q4 of 2018, where hard forks, Cash SV(Satoshi Vision), and Cash ABC emerged.
Bitcoin was predestined to become a P2P cryptocurrency that can be utilized as a means for doing routine transactions. But over time, as its prices elevated, people started to see it as an investment vehicle rather than a currency. Scalability issues came into light as an elevated number of transactions became out of management for Bitcoin, increasing the transaction time and fee. This happened because of the limited size of the block, which was 1 MB.
This is where Bitcoin came into play, solving the issues by introducing 8-32 MB of blocks, enhancing the number of transactions and its speed. 1000-1500 transactions were proposed on an average on BCH. In a stress test, transactions were elevated to 25000 in each block, back in September 2018.
How Does BCH Work?
Bitcoin Cash utilizes larger blocks for processing transactions more swiftly. The transactions are fast enough for quick and small purchases on a retail store but for bigger transactions like purchasing an RV, you should be considering Bitcoin, a slower but secure digital asset.
SegWit, a solution utilized by Bitcoin and meant for accommodating increased transactions per block, is not used by Bitcoin Cash. Only metadata or information associated with the transactions in the block is held by SegWit.
Similar to Bitcoin, Bitcoin Cash also utilizes the Proof of Work algorithm for mining coins. Bitcoin Cash began utilizing the same mining difficulty Mechanism called EDA or Emergency Difficulty Adjustment. Adjusting difficulty approximately every couple of weeks.
These similarities were utilized by the miners for altering their mining activities among BTC and BCH. It proved profitable for the miners but was pernicious to the elevated supply of BCH in the crypto markets. This is why the EDA mechanism was revised by Bitcoin Cash to make it simpler for miners to produce cryptocurrency.
Finally, Using bitcoin Cash is very easy, simply a wallet address is needed for sending assets to the wallet. The receiver can be anyone, a merchant or a normal person. BCH is accepted by many traders worldwide among various other digital assets. Many websites associated with e-commerce, tours, and travels, online retail stores, etc. accept Bitcoin Cash.
But because Bitcoin is more popular than its hard fork, people around the world choose to accept payments in Bitcoin instead of Bitcoin cash.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
