What is Bitcoin Cash (BCH)?

What is Bitcoin Cash (BCH)?

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Bitcoin Cash is a peer-to-peer digital money system that intends to become a reliable medium of exchange with quick payments, low costs, anonymity, and enormous processing capacity (which means larger blocks and fewer transaction times).

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In the same way that actual money, such as a dollar note, is transferred immediately to the individual receiving payment, Bitcoin Cash's daily transactions are sent directly from one person to another.

Bitcoin Cash is permissionless and decentralized, which means that the blockchain does not require trusted third parties or a central bank. Bitcoin Cash does not depend on monetary intermediaries such as banks and payment processors, which is something that fiat currencies are reliant on.

Governments or other centralized companies cannot censor daily transactions. Similarly, money cannot be confiscated or blocked – since financial third parties have no authority over the Bitcoin Cash network.

Bitcoin Cash was founded by bitcoin miners and programmers who were primarily worried about the cryptocurrency's future and scalability. These individuals, however, expressed misgivings regarding the use of segregated witness technology.

They believed SegWit2 did not address the basic issue of scalability, nor did it adhere to the road map established by Satoshi Nakamoto, the unidentified entity who first introduced the blockchain technology that underpins cryptocurrencies.

 

Component Bitcoin Cash (BCH)
Technologies SegWit, 
Market Capitalisation $8.14 Billion+
Open-Source Yes
Consensus Mechanism Proof-of-Work
Smart Contracts No
Founders/Authors Bitcoin Unlimited
Launch Date 2017 (2021 Latest Release)
Circulating Supply of Coins 18,932,388 BCH
Maximum Coin Supply 21,000,000 BCH
Mining-based Coin? Yes
Is Bitcoin Cash a Stablecoin? No
Does Bitcoin Cash have a burn rate? No
Does Bitcoin Cash have a White paper? Yes, the white paper can be viewed here

 

Evolution and Development of Bitcoin Cash

Since its inception, bitcoin users have followed a set of rules. Bitcoin miners adopted BIP 91 on July 21, 2017, signaling the Segregated Witness upgrade would take effect at block 477,120.

SegWit would allow controversial second-layer bitcoin alternatives like the Lightning Network. A major topic of dispute among Bitcoin users was the functioning of nodes.

Bitcoin advocates wanted small blocks so nodes would use fewer resources, whereas large block supporters think nodes should be administered only by universities, companies, and organizations.

Disappointed with Bitcoin's planned SegWit improvement plans to increase capacity, developers and Chinese miners proposed a hard fork that would increase the maximum block size limit to eight gigabytes.

Supporters of a larger block size were more committed to an on-chain exchange function than opponents.

If SegWit is adopted, Bitmain, the producer of bitcoin mining hardware, says this “contingency plan” will be executed. The program was first launched as Bitcoin ABC at a conference. Bitcoin Cash was coined by mining pool ViaBTC in July 2017.

BIP 91 (which activated SegWit) suited users who wanted to use bitcoin as a store of value rather than a transactional currency in July 2017, according to Roger Ver and others, which would take effect on August 1, 2017.

Those who had bitcoin at the time of the fork received the same amount of BCH units. Bitcoin Cash has bigger blocks than Bitcoin, allowing it to execute multiple transactions per second.

A fault in the Bitcoin ABC software allows an attacker to fabricate a block, causing a chain divide in 2018. Fields reported it to the development team, which remedied it. In November 2020, the main node implementation, BitcoinABC, launched BCHA.

BCH's transactional speed is faster than Bitcoin’s but is inferior to Visa's 1,500 at only 200 per second.

 

What makes Bitcoin Cash unique?

The following features make Bitcoin Cash unique:

  • Open-Source – Nobody owns Bitcoin Cash, and permission is not needed to use its code.
  • Pseudonymous – There are no identities that are tied to transactions, helping to ensure that Bitcoin Cash can be used freely and that it remains free of censorship.
  • Transparent – All transactions are on a global public ledger which is updated frequently. Anyone can see the full history of ownership, and this minimizes the chance of fraud.
  • Distributed – The public ledger is stored voluntarily by participants known as “nodes.”
  • Rule-based – Nodes must follow a set of rules to ensure that consensus is achieved on the ledger's state.
  • Immutable – The technology ensures that transactions that are recorded on the blockchain cannot be modified or tampered with.
  • Secure – Proof-of-Work secures Bitcoin Cash's blockchain by using miners to add new blocks to the blockchain.
  • Fixed Supply – There are only 21 million coins that will ever go into circulation.
  • Extremely Low Fees – Bitcoin Cash's technology enables fast, reliable, and cost-effective borderless transactions.

 

What are the main uses for Bitcoin Cash?

Bitcoin Currency blends the rarity of gold with cash's ability to be spent. Bitcoin Currency, with a finite total number of 21 million coins, is provably rare and, like actual cash, readily spendable.

Transactions are completed quickly, and transaction costs are often less than a fraction of a penny. Anyone with a computer or smartphone may accept Bitcoin Cash payments.

There are several applications for Bitcoin Cash. Bitcoin Cash can also be used to pay for items and services at participating shops in-store and online, as well as peer-to-peer transactions between individuals.

Because of the minimal costs, new micro-transaction economies can emerge, such as tipping content providers and rewarding app users with a few cents.

Bitcoin Cash also cuts remittance and cross-border trade fees and settlement periods. Tokens, simpler smart contracts, and private payments using tools like CashShuffle and CashFusion are examples of other applications.

 

What is the future potential for Bitcoin Cash?

Bitcoin Cash proponents believe that by focusing on making transactions cheaper, consumers will begin to use BCH in online transactions, thereby increasing the currency's value.

Bitcoin Cash also retains several of Bitcoin's characteristics, including its scarcity. This includes a limit of just 21 million BCH being produced and a progressive decrease in the quantity of new BCH being added to the system (in cases when halvings occur).

Given the similarities between Bitcoin and Bitcoin Cash, traders may view it as a hedge against the risk that Bitcoin's roadmap will restrict adoption or devalue its technology.

 

Price analysis on Bitcoin Cash

Bitcoin Cash was initially launched in 2017, and its price analysis over the past 5 years are indicated as follows:

 

  2017 2018 2019 2020 2021 to date
BCH Price High $3,923 $2,895 $485 $491 $1,542
BCH Price Low $213 $77 $111 $152 $378
Market Cap $66B $48.95B $8.67B $8.98B $28.09B

 

Price prediction on Bitcoin Cash

BCH's ties to bitcoin (BTC) appear to be fading. While Bitcoin is nearing its all-time highs, BCH remains stuck in the cellar of its 2022 recessions.

The price of BCH was about $569 in November, with crypto analysts anticipating that the median price of Bitcoin Cash (BCH/USD) would approach $1,008 by the close of 2022, $1,335 by the close of 2022, and $2,293 by the conclusion of 2025.

 

Which wallets are the best option for storing Bitcoin Cash?

A Bitcoin Cash wallet, to put it simply, is a piece of software that stores the information needed to access Bitcoin Cash (BCH) money. This information includes a private key, which functions similarly to passwords, along with a wallet address, also known as a public key, which functions similarly to an account number.

The best wallet options for Bitcoin Cash are as follows:

  1. Ledger Nano S
  2. Trezor
  3. Coinomi
  4. Electron Cash
  5. BTC.com

 

1. Ledger Nano S: The Ledger Nano S is a hardware wallet that is also incredibly portable. It is also incredibly safe because it is a hardware wallet. The user's private keys are kept in a secure element that requires a PIN to access.

Additionally, for added security, 2-factor authentication is offered while authenticating. All the users must do is plug the wallet into the USB port on their PC or laptop.

 

2. Trezor: Since TREZOR is also a physical wallet, it is a particularly popular option for Bitcoin Cash wallets. It connects through USB to the user's PC or laptop and features a PIN code for further security.

Users can easily verify the specifics of their transactions before they approve them using the built-in display. As with the Ledger Nano S, the user will need to validate and verify transactions using physical keys. The user will find that they quickly and simply configure the gadget and start using it to store, send, and receive BCH.

 

3. Coinomi: Coinomi is an incredibly simple and basic method of storing Bitcoin Cash. The program is accessible as a mobile wallet and features a user-friendly interface. Additionally, it includes private keys for added protection. However, it is only compatible with Android smartphones.

 

4. Electron Cash: Electron Cash is a useful alternative because it can be used as both a mobile and desktop wallet. It is compatible with Windows, Linux, and Mac OS X but is also accessible on the Android market.

Additionally, for added protection, the platform supports multi-signature and offers the user complete control over their private keys.

 

5. BTC.com: When it comes to Bitcoin Cash, BTC.com is an excellent choice for an online wallet or a mobile wallet. If the user is concerned about security, they can set up and use two-factor authentication and multi-signature transactions.

 

Where can you buy Bitcoin Cash?

Bitcoin Cash can be purchased from these crypto exchanges:

  1. Gate.io
  2. FTX
  3. Coinbase
  4. Huobi Global
  5. Binance

 

1. Gate.io: This is Gate.io, one of China's oldest and most well-known Bitcoin trading platforms, created by Lin Han in 2013. Unregulated crypto exchange Gate.io has around 3500 BTC traded each day in total volume and market liquidity.

 

PROS CONS
Offers more than 180 different digital currencies and a wide range of trading pairs Fiat deposits are not supported
Provides access to more than 400 different markets Unregulated exchange with a history of past hacks
Allows margin trading with up to 10x leverage The development team is not known
It is an excellent IEO platform The interface is messy
Provides access to innovative mobile trading apps The exchange is not suitable for beginner traders
The decent customer support offered  

 

2. FTX: As one of the biggest cryptocurrency exchanges, FTX has low trading costs and a vast selection of digital assets. FTX.US, its U.S.-based cryptocurrency exchange, offers a narrower range of cryptocurrencies, but it does so without sacrificing any functionality.

 

PROS CONS
Known for its low cost per transaction United States clients are limited
Offers a large selection of tradable instruments Some major cryptocurrencies are excluded from the platform's offering
Provides experienced traders with an array of advanced trading features  
Includes an NFT marketplace which is becoming a vital part of the crypto market  
Offers a proprietary FTX debit card  
Suited to both beginner and professional traders  

 

3. Coinbase: Over 100 tradable cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin, may be purchased, sold and exchanged via Coinbase's platform. A huge corporation, Coinbase has over 73 million daily users and $255 billion in assets on its platform.

 

PROS CONS
Suitable for beginner traders High transaction fees on some instruments
Offers support for a wide range of markets There are some issues with customer service support
Offers the perfect opportunity for traders and BCH holders to earn crypto  Altcoin support is limited
Has much lower pricing options available through Coinbase Pro  
Offers Coinbase Pro for professional traders  
Exchange with a high level of trustworthiness  

 

4. Huobi Global: One of the world's major virtual asset exchanges, Huobi Global, was founded in 2013. As a result of new Chinese government crypto laws, the platform, which was originally developed in China, is now based in Seychelles.

 

PROS CONS
Offers a wide range of crypto coins that can be exchanged Some experience is required to fully understand the provided features
Offers 24/7 customer support via live chat Might not be the best platform for complete beginners
Low minimum deposit from $50  
The platform is functional and easy to navigate  
There are several useful features on the platform  
There is an innovative mobile trading app available to iOS and Android devices  

 

5. Binance: For seasoned cryptocurrency investors, Binance is a well-known cryptocurrency exchange. It has a vast range of cryptocurrencies available for trade across the world, although trading choices in the United States are a little more limited.

 

PROS CONS
Offers a wide range of digital assets that can be traded Inaccessible to United States users
Offers low transaction fees The platform is complex and can be a learning curve for beginner traders
There are a wide selection of options and order types available There is no native digital wallet
High trust score among crypto investors Binance has faced a lot of regulatory trouble in several regions

 

Are there criticisms against Bitcoin Cash?

Yes, the following are criticisms against Bitcoin Cash:

When it comes to Bitcoin, there were two factions: those who wanted huge blocks and those who preferred tiny blocks in 2017. Both factions promote the use of Bitcoin as a store of value, while the Bitcoin Cash side wants to utilize its currency as a means of trade exchange.

There is enmity between the Bitcoin and Bitcoin Cash communities because of Bitcoin Cash's usage of “Bitcoin” as a moniker. Coins like Bitcoin Cash and Bitcoin are “enormously” focused on value storage, according to Cornell researcher Emin Gün Sirer.

You can buy Bitcoin Cash safely from these cryptocurrency platforms.

What is Bitcoin Cash’s largest Competitor?

The largest competitor of Bitcoin Cash is Bitcoin.

There are a lot of important differences between Bitcoin and Bitcoin Cash, so this is not the same thing. The biggest thing relates to block size, referring to the number of transactions that a single block can hold.

With Bitcoin, the block size is 1MB, but on Bitcoin Cash, it is 8MB, which is a lot bigger. In this case, every individual block on Bitcoin Cash can hold up to eight times as much information, which means that it can authenticate transactions more quickly.

In May 2018, it even expanded its block size to 32MB, giving it even more of a lead in that field. Also, the transaction costs are very different. The reward that miners are entitled to when they check each transaction is another difference.

Networks like Bitcoin and Bitcoin Cash have this feature because of the Proof-of-Work consensus mechanism, which requires miners to add new blocks and verify transactions.

 

What is the Mining Process involved with Bitcoin Cash?

The mining process confirms new Bitcoin Cash transactions and adds new blocks to the Bitcoin Cash blockchain. Miners solve complicated riddles using computational power and electricity.

They get the capacity to create new blocks of transactions because of this. If the network accepts one of their blocks, the miner or mining pool wins a block reward in newly issued Bitcoin Cash.

Mining is an extremely competitive industry. As the market price of Bitcoin Cash increases, more miners are enticed to enter the ever-increasing miner rivalry to generate blocks and have them acknowledged by the Bitcoin Cash network.

By boosting and dispersing the hash rate, more miners strengthen the network's security. This prevents a single miner from gaining network control.

Bitcoin Cash may be mined by anybody. Mining needs specialized gear referred to as mining equipment that may be purchased or rented.

Additionally, miners must run a complete node software (most miners are presently running BCHN) to generate blocks and communicate with the rest of the Bitcoin Cash network.

While mining may be done separately, miners sometimes pool their hash power and split the block rewards proportionately.

 

Is Bitcoin Cash a Good Investment?

No, Bitcoin Cash is not considered a good investment, according to interviews with industry experts.

If you look at the market, there are many different types of cryptocurrencies. Most of them seem to have little value and are not sure how much they will grow in value in the future.

Because Bitcoin Cash has the same name, experts say that investors should stay away from it. They say that they should stick with Bitcoin instead of Bitcoin Cash.

 

What is the supply and distribution of Bitcoin Cash?

Bitcoin Cash has a max supply of 21,000,000 BCH with a circulating supply of 18,932,388 BCH.

  • Fixed or maximum supply can be defined as the total number of coins that can ever be in circulation.
  • Total Supply refers to the number of coins that have been mined, including the missing coins that are no longer in circulation or that have been lost.
  • Circulating supply refers to the total number of coins that are in circulation.

 

Is Bitcoin Cash a viable Alternative Coin?

Yes, Bitcoin Cash is a good alternative coin in terms of the following:

  • Hacking – Bitcoin Cash does not have any record of successful hacking attempts.
  • Security – Bitcoin Cash uses PoW, which is a secure consensus mechanism.
  • Popularity – Bitcoin Cash is one of the top 50 alternative coins in the market.

 

What are the differences between Bitcoin Cash and Bitcoin?

Concerns regarding Bitcoin's scalability caused a schism in the Bitcoin community in 2017. As a result, a hard fork occurred, resulting in the creation of Bitcoin Payment, a new cryptocurrency that advocates believe is the authentic continuity of the Bitcoin project as peer-to-peer digital money.

When the hard fork that created Bitcoin Cash occurred (block 478,558), all Bitcoin holders instantly became Bitcoin Cash owners. Bitcoin, which was created by the anonymous Satoshi Nakomoto, continues to exist as a distinct cryptocurrency.

Unlike Bitcoin (BTC), Bitcoin Cash seeks to scale to satisfy the needs of a worldwide payment system.

The Bitcoin Cash block size was raised from 1MB to 8MB at the time of the split. Bitcoin Cash can process more transactions every second because it enhanced its block sizes. This also means that costs can be kept low while payment delays are resolved. 

 

  Bitcoin Bitcoin Cash
Price change 20/21 +400% +25%
Market Cap $800 Billion+ $8.14 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #1 – Original Crypto #24

 

What are the differences between Bitcoin Cash and Ethereum?

They are two of the top five digital currencies in the world (according to market cap). Two very different things happen in the crypto world when you use both things.

This is how it works: Bitcoin Cash wants to bring fiat-currency-like features into space. Ethereum has constructed a smart contract framework, where developers all over the world can make their own decentralized apps.

 

  Ethereum Bitcoin Cash
Price change 20/21 +880% +25%
Market Cap $460 Billion+ $8.14 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #2 #24

 

What are the differences between Bitcoin Cash and Dogecoin?

One of the main differences between the two types of virtual currency is how much there is of each type of cryptocurrency. Dogecoin has an infinite number of coins.

Without a limited supply, DOGE can grow as big as it wants without even being tied to something. There is also a big difference in the way Bitcoin Cash works. Bitcoin Cash has well-defined processes that go from mining coins to using them to buy things, which is good from a stability viewpoint.

 

  Dogecoin Bitcoin Cash
Price change 20/21 +7,300% +25%
Market Cap $22 Billion+ $8.14 Billion+
Past Hacks None None
Popularity High High
Altcoin Rank #12 #24

 

What are the differences between Bitcoin Cash and Neo?

NEO is very different from other blockchain platforms because it focuses on being legally compliant. As with other blockchains like Ethereum, digital assets and smart contracts are very popular on NEO. Another thing that makes NEO unique is what it calls its “digital identity.”

NEO is focused on being a programmable blockchain that can play a vital part in the future of Decentralized Finance. Bitcoin Cash merely aims to be a medium of exchange as a digital currency used with payments.

 

  NEO Bitcoin Cash
Price change 20/21 +160% +25%
Market Cap $1.70 Billion+ $8.14 Billion+
Past Hacks None None
Popularity Medium High
Altcoin Rank #69 #24

 

What are the differences between Bitcoin Cash and NFTs?

These digital assets, known as nonfungible tokens (NFTs), do not share the same attributes or value as any other digital asset. On the other hand, because Bitcoin Cash (BCH) is fungible, its value and features are identical from one BCH to the next.

 

What are the differences between Bitcoin Cash and Solana?

Solana bills itself as the world's quickest blockchain, able to validate 65,000 transactions per second for pennies apiece. Solana is a blockchain network aiming to create a cryptocurrency-powered environment.

Solana is unlike Bitcoin Cash and a little more like Ethereum. However, it offers quicker transaction speeds, reduced transaction costs, and a more flexible development environment than Ethereum.

 

  Solana Bitcoin Cash
Price change 20/21 +9,300% +25%
Market Cap $54 Billion+ $8.14 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #5 #24

 

What are the differences between Bitcoin Cash and Cardano?

In comparison to Bitcoin Cash, Cardano is an Ethereum-based cryptocurrency, whereas bitcoin is a crypto-currency. Charles Hodkinson created Cardona, while Satoshi Nakamoto created Bitcoin, from where Bitcoin Cash stemmed.

Ethereum-based Cardano is the antithesis of Bitcoin Cash-based crypto-money. Cardona is faster than Bitcoin Cash and has an extremely bright future ahead of it as a programmable blockchain.

 

  Cardano Bitcoin Cash
Price change 20/21 +2,100% +25%
Market Cap $42 Billion+ $8.14 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #7 #24

 

Is Bitcoin Cash Permissionless?

Yes, Bitcoin Cash is a Permissionless and open network.

Known as trustless or public blockchains, permissionless networks allow anyone to engage in the consensus process that validates transactions and data. In addition, they are completely decentralized and autonomous.

 

What are the advantage and disadvantages of being permissionless?

The advantages of permissionless blockchains are:

  • A decentralized platform means that information is not centrally kept and may be accessed by anyone at any moment and from anywhere.
  • All records have immutable signatures. All file transfers and transactions are cryptographically secured, making the system safe and secure.
  • Anonymity – Another prominent blockchain feature. The network's miners and users stay anonymous.
  • Transparency is another permissionless blockchain characteristic. Everyone has access to all data. However, this benefit has backfired, raising concerns about data security in a permissionless blockchain.
  • The basic transactions per block are rapid and straightforward because the permissionless blockchain eliminates the requirement for a third party.

 

The disadvantages of permissionless blockchains are:

  • Anonymity could lead to people utilizing the blockchain for illegal activity.
  • To reach a consensus, participants in a permissionless network like Bitcoin must solve a hard mathematical puzzle. It consumes a lot of non-renewable resources in addition to making it more expensive.
  • Permissionless blockchains are known for their limited block sizes.
  • The permissionless blockchain eliminates the requirement to prove one's identity, which could compromise security.

 

Is being a scarce currency with a fixed supply an advantage of Bitcoin Cash?

Yes, it could be an advantage. With supply diminishing, Bitcoin Cash could appreciate over time.