What is Bitcoin Cash? A Product of Bitcoin Hard Fork
Bitcoin Cash is a digital asset, payment network, and an off-shoot of the Bitcoin hard fork introduced to the world in August 2017. The name of the digital asset is contentious and is sometimes called Bcash.
The digital asset was created in order to increase Bitcoin’s block size from 1MB to 8MB and allow more transactions to be processed.
Bitcoin Cash fundamentals
Bitcoin Cash is a peer-to-peer (P2P) electronic cash that allows entities to transact with each other without relying on third parties. Bitcoin Cash borrows most of identifying features from Bitcoin, the digital asset from which it was forked from.
It uses the proof-of-work consensus algorithm with a limited supply of 21 million coins. It has a block time of 10 minutes and a block reward of 12.5 BTC.
The block reward is an incentive for miners who validate transactions and mint new coins by solving a complex mathematical puzzle.
History of Bitcoin Cash
The history of Bitcoin Cash is intertwined with that of Bitcoin, the world’s first and original cryptocurrency launched in 2008 and whose genesis block was created on Jan. 3, 2009.
Before going into the details of the two digital assets, we take a look at what a fork is.
There are two types of forks in the crypto sector – soft fork and a hard fork. A soft fork is an update to the software of a blockchain protocol and does not result in a split. A hard fork is a rule change that is not backward compatible and results in the network being split into two.
Bitcoin Cash was created due to diverging viewpoints within the Bitcoin community about which direction the network should take. The main bone of contention was how to scale the network, if at all.
As the network grew and more people began to use Bitcoin, the network did not have enough bandwidth to keep up with the increasing volume of transactions. The clogging resulted in users waiting for several hours or days before the transactions settled.
There were disagreements on how to solve this problem and this eventually led to two distinct groups that had diverging viewpoints. In one corner of the ring, there were those who in favor of increasing the block size and the corner had those who favored restructuring the storage of data in the existing blocks.
The hard fork
After the infighting, it was time for the hard fork. The split. The divorce.
Bitcoin Cash is the most well-known fork of Bitcoin. The digital currency was created specifically to increase Bitcoin’s block size of 1MB to 8MB. The main purpose of the hard fork was to solve Bitcoin’s scalability issues. Bitcoin’s low block size resulted in increased fees and longer transaction processing times.
The forked Bitcoin Cash underwent one of the most controversial hard forks in the history of cryptocurrencies. The November 2018 hard fork was as a result of tensions among the developers of the network.
The contentious hard fork that triggered a massive sell-off is more like a tug-of-war between Roger Keith Ver and Craig Stephen Wright.
Ver is known as “Bitcoin Jesus” because of his evangelism for the leading cryptocurrency. Wright has tried so many times (but unsuccessfully) to convince the world that he is the mysterious Bitcoin creator Satoshi Nakamoto.
Ver supported the original Bitcoin Cash while Wright was in favor of expanding the block size from 32MB to 128MB. He believed that this is what Satoshi had in mind when Bitcoin was created, and this is the reason it is referred to as “Satoshi Vision.”
Differences and similarities between Bitcoin and Bitcoin Cash
The first and obvious difference is the name. Bitcoin has long been criticized for its inability to scale while its backers claim that it is not a payment solution designed for a cup of coffee. On the other hand, Bitcoin Cash was created to be a new form of cash.
Bitcoin Cash has a large block size limit (8MB) compared to Bitcoin’s only 2MB. Bitcoin Cash can process more transactions at a cheaper fee.
How to get Bitcoin Cash
- The best place to buy Bitcoin Cash is a cryptocurrency exchange. Many trading platforms such as Coinbase and Binance already support the cryptocurrency. However, some platforms are still weighing the option of adding support for Bitcoin SV.
- Those who engage in mining activities are rewarded with the digital asset that they are mining for.
- If you owned Bitcoin just before the hard fork, then you were credited an equal amount of BCH.