What is Bitcoin Cash? Beginner's guide to know everything about Bitcoin Cash
Welcome back to the beginner guide series and in this post, we will telling you everything you need to know about the fourth most powerful in terms of market cap cryptocurrency, Bitcoin Cash.
In this series, we are done with the following:
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As per Coinmarketcap, Bitcoin (BCH) is the fourth largest cryptocurrency in the world. At the time of writing this post, BCH is $707.79 and it is a lot of money for this coin. Considering the time it has taken to reach this mark, the price tells us that it has a lot of potential to make huge money for investors.
BCH is same as BTC but with some significant tweaks that BTC still lacks. Bitcoin Cash allows merchants to use the cryptocurrency at incredibly lower fees and reliable confirmations.
In this post we will attempt to explain the following:
What is Bitcoin Cash? Interesting features of Bitcoin Cash?
History of Bitcoin Cash
Why is Bitcoin Cash the most successful hard fork to date?
What is the future of Bitcoin Cash?
Frequently asked questions
Without further ado, let’s dive indirectly.
What is Bitcoin Cash?
If you already know about Bitcoin, you would know its limitations too. And if you know that, you are going to love the existence of this altcoin. Bitcoin cash describes itself as “Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.”
Someone rightly said. “Necessity is mother of invention”. Bitcoin is still the king of cryptocurrencies and will remain the king at least for years to come. But this doesn’t stop the fact that Bitcoin has a lot of flaws that is stopping it from removing many cryptocurrencies out of business.
Bitcoin Cash is a lot like Bitcoin but with significant differences as follows:
The block size for Bitcoin is 1MB and Bitcoin Cash has 8MB to 32MB of block size.
Bitcoin Cash will not have segwit
Bitcoin will not have replace by fee feature.
Bitcoin Cash offers way to update proof of work difficulty faster than Bitcoin. In 2016, the block difficulty level adjustments in Bitcoin was much slower which directly affected miners.
Bitcoin Cash is a result of a hard fork that happened in the Bitcoin network. What this means is that anyone who had BTC would have the exact same amount of BCH provided they didn’t have any of those BTC in exchange platforms. Furthermore, only those users who had their BTC stored in private keys at the time of hard fork were eligible for this claim.
Since the block 478558 all BTC holders were also owners of Bitcoin Cash. 1st August 2017 the fork happened and a huge number of users showed up to the network and made the network populated.
Bitcoin being the number one cryptocurrency has a lot of flaws including being super expensive at times. On the other hand, Bitcoin Cash promises to be really affordable when it comes to fees per transaction. The best thing about Bitcoin Cash that is still ruling its users is it salient features, which are as follows:
Fast: The network is engineered powerful enough to carry out transaction in seconds and confirm it in minutes. Thanks to the 8MB block size, more transactions can fit in one block and hence more transactions are approved in a block.
Reliable: The network is congestion-free, the traffic of transactions on this network is functional enough to not jam the network and again thanks to the block size, the network is quite free all the time.
Low fees & Reliability: This was the sole reason why Bitcoin Cash happened. Apart from being too expensive, Bitcoin is not reliable too. Only 6 transactions are confirmed in an hour, that brings down the probability of getting your transactions approved nearing 0. Bitcoin Cash can confirm your transactions in minutes and you will be charged pennies for this.
History of Bitcoin Cash
In October 2008, Satoshi Nakamoto, the anonymous developer of Bitcoin published a whitepaper on “peer to peer electronic cash system. In 2009, Bitcoin was officially out in the market and since then the network kept growing in numbers, obviously with ups and downs. For so many years, Bitcoin has been serving the purpose it was invented. But in 2016 the network became saturated and started slowing down. However, the Bitcoin community is questionable as to why is it not fixed yet?
In 2017, the Bitcoin network became more unreliable and damn expensive, especially for transactions involving smaller amounts. Reason being that the community could not meet the consensus because of the huge traffic on the network. Instead of slowing down, the traffic on the network kept increasing. Furthermore, just when the system was about to fail/crash a group of developers either did not understand Satoshi’s plan or had better plans.
We do not know what the real reason was, but the result of that was Bitcoin Cash. By beginning of 2017, the Bitcoin had the market acquisition of almost 95% which fell as low as 40% just before the fork happened. A large portion of the user base in the Bitcoin Community wanted the same vision in a better feature packed platform. 1st August 2017, that portion of the community got some breath as Bitcoin Cash was born. The best part of Bitcoin Cash was that it was perfect for merchants. A large pie of credit in growth of Bitcoin Cash’s price is because merchants used this cryptocurrency to accept payments more than anyone could used in the community.
Why is Bitcoin cash the most successful hard fork till date?
Considering the time it took for BCH to cost $700 odd bucks is amazing. Apart from the feature pack network, Bitcoin Cash has a couple of very legitimate reasons why it is called as one of the most successful hard fork in history of cryptocurrency. Let us explain the reasons to you.
#Reason 1: Availability in more exchanges
Since the day of it’s launch, Bitcoin Cash has been continuously growing in being available for number of exchanges. Initially, many exchanges were hesitating to include BCH as one their listing for obvious reasons. While the number of exchanges supporting Bitcoin Cash grew, it’s value grew along with it. Furthermore, the merchants who were hesitating accepting payment in Bitcoin Cash, opened its gates for the new comer. Soon the cryptocurrency became one of the primary mode of payment for both merchants and customers.
#Reason 2: Miners populating the network
Mining is a process of generating new cryptocurrencies, in this case, Bitcoin Cash. The process involved in mining varies for different cryptocurrencies. The basic concept would be the same, only the algorithm and hardware used will be different. Since launch, BCH has been a lucrative source of income miners, which was not true in case of Bitcoin. Bitcoin mining too is saturated and is kind of centralized as only a handful number of mining pools are actively mining Bitcoins.
In case of Bitcoin Cash, miners happily gave their hashing power as they would reap more than they were sowing. This made the network more functional, reliable and fast. This further increased the price of BCH and the profit miners were making kept rising. Furthermore, thanks to the 8MB block size, more transactions could finish in one go which means more fees for the miners.
What is the future of Bitcoin Cash as a cryptocurrency?
Bitcoin Cash was the first one to successfully hard fork from the BTC network whilst maintaining the existing records and transactions. Not only this, BCH was also able to take place of the market acquisition that Bitcoin had. Sure, Bitcoin has been ruling the reign of cryptocurrency for all these years. However, everyone knows that it is at the top just because of the market cap and price, or majorly because of the price.
It won’t be long for Bitcoin to lose its top spot for Bitcoin Cash or Ethereum if it doesn’t take the tie and fix the reliability issues it has right now.
As far as Bitcoin Cash’s future is concerned, the 8MB block size and the huge community has already been winning hearts of investors, merchants and users in the cryptoverse. It has been a little over a year since Bitcoin Cash came into existence, and it has already reached a greater height. Which pretty much speaks for itself about the future of Bitcoin Cash.
That being said, we are left with the most important questions that you should have in your mind right now. Let’s answer and explain now.
Frequently asked questions
Why use Bitcoin Cash? Why not Bitcoin?
Bitcoin Cash can let you send money to anyone across the globe anytime of the day, week or the year. It’s just like sharing the information or accessing it - you can access information from anywhere, anytime and without limit. Transactions are treated the same throughout the network, no network is important than other. All transactions go in the same network with the same priority. You don’t need any permission to send funds to people.
How is Bitcoin Cash different from the traditional banking system?
Unlike the traditional banking system, you don’t have to pay a huge chunk or fees as there are so many middlemen in the system. Moreover, banks are as safe as the government decide it to be. Your money, your hard earned money is under someone else’s control. That doesn’t do the justice, not anymore.
Bitcoin Cash gives your the liberty to send, spend, and save money anytime, anywhere with the least fees you can imagine. And who controls this network? No one, not even government. In other words, everyone on the network are responsible for their own money, which is a warning in itself. If you accidentally send money to wrong address, it cannot be reversed unless that person sends it back considering the mistake.
How does Bitcoin Cash tackle inflation and supply of coins?
The problem with the traditional banking system is that there is no cap on how much the currency are in circulation, i.e. the government keeps printing the currency eventually devaluing the funds we have in banks and overall currency in the international market.
Bitcoin Cash on the other hand doesn’t work that way, it has a fixed supply of 21 million Bitcoin Cash cryptocurrency units. The number will never go above this mark, not now not in future. This will keep the value of the coin increasing and inflation in check.
How safe are your funds in this network?
Bitcoin Cash is network powered by blockchain technology and hence it is decentralized. Therefore, the network has more privacy than all the traditional banking system together. The funds you transfer, your financial details, your credit card transactions, debit card payments are all on a centralized server in the traditional system, and the common weakness of these systems is that it has a single point of failure.
Hence all the records are prone to a cyber attack that could result in a loss. However, many exchange platforms too get hacked and which is not a fault of the cryptocurrency network.
Final thoughts on Bitcoin Cash
For what we have seen in this post so far, it clearly proven that Bitcoin Cash is the only fork that is a pure form of cryptocurrency and resembles the natural combination of the original Bitcoin philosophy.
Many Segwit blockchains have modified and compromised on many fundamental concepts of blockchains. Bitcoin Cash has just crossed the milestone of 1 year and has a lot to do in the cryptoverse. And in one year, it has managed to reach the top 5 spot. Let’s give it some time and not judge it potential right away.
Over to you. What do you think of this cryptocurrency? Have you used this coin? What was your experience using it? Let us know in the comment section below.
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