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Bitcoin Cash is a cryptocurrency that was created as a result of the hard fork in the Bitcoin network in 2017. The main reason for the split was the problem of Bitcoin’s scalability and the community’s urge to increase the number of transactions processed per second in the Bitcoin network.
In this article, we will take a closer look at the Bitcoin Cash protocol and discover similarities and differences between Bitcoin and Bitcoin Cash. We are also about to discuss the future of this project and its impact on the global crypto community.
BCH Overview
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How Does Bitcoin Cash Work?
The Bitcoin Cash network is based on the same technology as Bitcoin, including the proof-of-work consensus algorithm and the SHA-256 mining algorithm. BCH undergoes a halving every four years and has a supply limit of 21 million coins.
Block No. 478,559 in the Bitcoin and the Bitcoin Cash network is the one where they split. All the previous blocks generated before the hard fork are the same for these two digital currencies. During the split, all Bitcoin owners had an opportunity to become owners of an equivalent amount of Bitcoin Cash coins.
The application scope of Bitcoin Cash is limited to two main functions: a payment method and an investment opportunity. This means you can buy goods and pay for services online using Bitcoin Cash, and you can actually send, receive, and store BCH. It’s worth mentioning that at the moment, not so many online platforms accept Bitcoin Cash as a means of payment, but as the potential of the coin grows, more vendors may support it. There is a list of merchants that already work with Bitcoin Cash.
BCH: Founders and History
By 2017, the Bitcoin community had been debating for some time the issue of the Bitcoin network scalability, aiming to accommodate increasing transaction volume. On August 1, 2017, a group of Bitcoin activists, developers, and crypto enthusiasts initiated a Bitcoin hard fork, creating a new digital currency — Bitcoin Cash. They modified the original code and started a new branch of blockchain. Bitcoin Cash is now its own separate cryptocurrency, with its own price and market capitalization. While it is similar to Bitcoin in many ways, there are also some important differences between the two cryptocurrencies, which we will discuss later.
Roger Ver is frequently considered the most outspoken supporter of Bitcoin Cash. He did not, however, create Bitcoin Cash; he joined the project because he believed in the goals of this Bitcoin fork.
How to Mine Bitcoin Cash?
Bitcoin Cash mining is the process of verifying transactions and adding them to the public ledger, known as the blockchain. Just like Bitcoin miners, BCH miners are rewarded with newly minted coins for their work. Bitcoin Cash mining is different from Bitcoin mining in several ways. First, the block size is 32 MB, which allows for faster transaction processing. Second, the difficulty adjustment slows down the rate at which new blocks are added to the blockchain, thus reducing the likelihood of forks.
Three items are necessary for mining Bitcoin Cash (BCH): a specialized mining setup (rig), a mining pool, a wallet to receive rewards, and reliable software to house your mining activities. Bitcoin Cash uses a proof-of-work (PoW) consensus algorithm for mining the limited supply of 21 million BCH.
Here is our beginner’s guide to Bitcoin Cash mining.
Advantages & Disadvantages of Bitcoin Cash
One advantage of Bitcoin Cash is that it is more scalable than Bitcoin. This is due to the increased block size, which facilitates processing more transactions per second. As a result, Bitcoin Cash can handle a higher volume of transactions than Bitcoin. Another major advantage of BCH is its accessibility: crypto enthusiasts can find it on many popular exchanges, unlike its lesser-known peers.
However, one disadvantage of Bitcoin Cash is that it is not as widely accepted as Bitcoin. This is because it is a relatively new cryptocurrency, and many businesses and exchanges have not started supporting it yet. That’s why finding places to spend Bitcoin Cash may be a quest for users. Another disadvantage of BCH is its branding problems: Bitcoin Cash has a hard time standing out, especially given how similar the two competitors’ names are. And, as it comes with any PoW-based blockchain, there is a huge environmental impact.
Overall, while Bitcoin Cash does have some advantages over other cryptocurrencies, it is important to weigh them against the disadvantages before deciding whether or not to invest in it.
Bitcoin Cash vs. Bitcoin
Technically, BCH is Bitcoin’s spin-off, an alternative version that is similar enough but has its own independent blockchain and plays by its own rules. BCH blocks cannot be added to the BTC blockchain. Bitcoin and Bitcoin Cash share identical transaction histories up till August 1, 2017, but after this date, their ledgers are entirely different.
Bitcoin Cash works quite similarly to Bitcoin; the key difference between BTC and BCH is the size of their blocks. BCH creators believed that the best way to solve the scalability problem was to make each block in the chain larger. They assumed that if more transactions fitted into one block, they would be processed faster. After the hard fork, BCH’s block size reached 8MB, while BTC’s block size was 1MB. In May 2018, the Bitcoin Cash block size increased even more, and at the time of writing (September 2022), it equals 32MB.
Bitcoin developers took a different approach to the problem. They came up with the SegWit protocol — a way to separate the block’s signature data from the transaction information. This method enabled the storage of signature data outside the block, thus optimizing space inside and letting more transactions fit into one block. Currently, the Bitcoin blockchain can process 7–10 transactions per second.
Most crypto experts would agree that instead of solving the problem, this protocol postponed finding a potential final solution to it. Some argue that after the hard fork, Bitcoin remained a mere investment instrument, while Bitcoin Cash became a real means of payment.
Bitcoin Cash transactions are faster and have lower fees than those in the BTC network. However, Bitcoin Cash is not as widely accepted as Bitcoin, and the number of Bitcoin Cash users is considerably lower.
Learn more about BTC and BCH differences in this article.
How to Buy Bitcoin Cash?
If you want to buy Bitcoin Cash, you can easily do it on the Changelly exchange.
The first step: open the Buy page. Select the pair of fiat currency and crypto you’d like to exchange. In our case, it is BCH and USD. You can also exchange or sell Bitcoin Cash or other crypto assets.
Next, enter the amount you are willing to spend to buy the coin in the “You spend” column. The service will automatically calculate the number of coins you will receive in exchange for this amount.
Now, you have to choose the payment offer you like. After that, you need to enter your card details and your crypto wallet address to which your coins will be transferred. If you don’t have a Bitcoin Cash wallet yet, you can open it right away on the same page. Cryptocurrency transactions are irreversible, so please double-check your wallet address before proceeding to the next step.
Finally, you need to confirm the payment. After a few minutes, you will receive your newly purchased cryptocurrency in your wallet. It’s a very quick process, and you can buy crypto while reading this article.
FAQ
Is Bitcoin Cash a good investment?
Bitcoin Cash (BCH) is a cryptocurrency that was created as a result of a hard fork of the Bitcoin blockchain. The main difference between Bitcoin and Bitcoin Cash is that the latter has a larger block size, which allows for faster transaction time. While the Bitcoin Cash community believes that this makes BCH a more appealing investment than Bitcoin, there are also some risks to consider. For one thing, Bitcoin Cash is still a relatively new cryptocurrency, and its long-term viability is yet to be known. Additionally, the value of Bitcoin Cash can be quite volatile, and it may not always be easy to convert this crypto back into fiat currency. As with any investment, there are both risks and potential rewards to consider before making a decision.
None of the content on Changelly is investment advice, nor is it a replacement of advice from a certified financial planner. Before buying Bitcoin Cash, we recommend you to do your own research.
Is Bitcoin Cash the same as Bitcoin?
No, they are two distinct cryptocurrencies. Bitcoin Cash emerged after a hard fork in the Bitcoin protocol, just like Ethereum ETH. Bitcoin Cash was later divided into Bitcoin Cash ABC and Bitcoin SV (Satoshi Vision).
What can you buy with Bitcoin Cash?
While there is a long list of companies that accept payments in Bitcoin, it’s not the same with Bitcoin Cash. Not so many vendors are adopting it yet, but you can already purchase items like gift cards for more than 300 retailers via special services.
Is it better to invest in Bitcoin or Bitcoin Cash?
Both cryptocurrencies have their benefits and risks, so it’s crucial to understand the difference between them before making a decision. Being the original cryptocurrency, BTC remains the most widely used and accepted. It has a strong reputation and a large community of users and developers. However, Bitcoin users also face some issues. BTC’s transaction fees have risen sharply in recent years, making it less suitable for small or microtransactions. In addition, its scalability issues have led to increasing concerns about its long-term viability. BCH, on the other hand, was created as a fork of BTC to address its scalability issues. It has lower transaction fees and can process more transactions per second than BTC. However, it is still a relatively new cryptocurrency, and its price is more volatile. Overall, there is no easy answer when it comes to deciding between BTC and BCH. It depends on each individual’s investment goals and risk tolerance.
Will Bitcoin Cash go as high as Bitcoin? What’s the highest Bitcoin Cash can go?
Some analysts anticipate that BCH will have surpassed the $1,100 threshold by 2026, which is certainly a very optimistic estimate. Visit our Bitcoin Cash price prediction page to find more detailed forecasts.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
