Bitcoin Cash is a peer-to-peer (P2P) electronic cash system, much like Bitcoin, aiming to facilitate fast global money transfers at ultra-low costs and with high-level privacy. Bitcoin Cash is a fork of Bitcoin developed by a group of Bitcoin developers that split due to dissatisfaction over Bitcoin’s scalability direction.Thus, Bitcoin Cash’s high transaction capacity remains its most salient feature over Bitcoin.
Bitcoin Cash is permissionless and decentralized, requiring no trusted intermediaries like central banks to facilitate transactions. Transactions of its native token $BCH are proofed against censorship by governments or other centralized institutions. As such, these centralized institutions can neither seize nor freeze $BCH assets as they have no control over the Bitcoin Cash network.
Bitcoin Cash Developers
Bitcoin Cash was developed in 2017 when a group of bitcoin investors, developers, and miners felt unhappy with Bitcoin’s proposed segregated witness (SegWit) improvement plans, which aimed at increasing bitcoin’s capacity. Instead, the dissenting group advanced a push for alternative plans to increase the block size limit to eight megabytes (8MB)via a hard fork. Many developers participated in creating Bitcoin Cash, including Roger Ver of Bitcoin.com and Jihan Wu of Bitmain.
In November 2018, a hash war led the Bitcoin Cash community to split further into Bitcoin Cash and Bitcoin Satoshi Vision aka Bitcoin SV, in a hard fork. The splitting faction led by Craig Wright and Calvin Ayre created another hard fork.The splitting faction suggested implementing a software version (the Bitcoin Satoshi Vision) to expand the block size limit to 128MB.
Further in November 2020, Bitcoin Cash underwent another hard fork, this time with the launch of Bitcoin Cash ABC (BCHA). The BCHA network comprises a miners’ tax where 8% mining rewards are distributed to BCHA developers to fund the protocol’s development.
The Bitcoin Cash community is currently maintained by core developers and contributors from its community.
Contrasting Bitcoin Cash and Bitcoin
- Non-interoperability: Bitcoin Cash (BCH) and Bitcoin (BTC) are separate cryptocurrencies and not non-interoperable.At the time of the fork (block 478,558), all BTC holders became owners of BCH.
- Scalability: BCH focuses on scalability as a way to bridge the global payment system demands. During the 2017 fork, the Bitcoin Cash block size increased from 1MB to 8MB, allowing the network to process more transactions per second (TPS) and maintain very low fees. This way, BCH solved BTC’s prevalent issues related to transaction delays and high fees.In general, Bitcoin Cash is a faster and more efficient form of digital currency. The BCH block size is 32MB as of May 2021.
- Dynamic difficulty adjustment: Bitcoin Cash deploys a dynamic difficulty adjustment algorithm that reevaluates the difficulty at each block, unlike Bitcoin’s difficulty adjustment that’s approximately fourteen days.
- Smart contract support: Bitcoin Cash blockchain supports smart contract deployment.
- Token issuance support: Through the Simple Ledger Protocol (SLP),users can securely issue and transfer fungible and non-fungible tokens on the Bitcoin Cash blockchain.
Mining Bitcoin Cash ($BCH)
New BCH transactions are confirmed and new blocks added on the Bitcoin Cash blockchain through mining. The process deploysSHA-256d-based proof-of-work (PoW), which is similar to Bitcoin’s consensus mechanism. In this process, miners utilize computing power and electricity to solve complex puzzles to be legible for creating new blocks. When a miner’s block or a mining pool’s block is accepted by the network, they earn a block reward as newly-minted $BCH.
As the value of $BCH soars, miners are incentivized to add more hash rates to create more blocks in the competitive $BCH mining space. More miners secure the network against a single miner or group of miners from gaining a majority of the mining power. Miners require specialized mining equipment that can be purchased or rented by anyone. The miners must run a full node software to build blocks and connect to the Bitcoin Cash network.
A miner’s (or validator) percentage of the total computation power (or hash power) represents the probability they have to complete the task and earn block rewards. Most miners pool their hash rate together and share the block rewards in proportion to their hash rate contribution. Beginning April 9, 2020, the block mining reward has been 6.25 $BCH per block.
With Schnorr Signatures, multiple parties on the Bitcoin Cash network can produce a valid signature for the sum of their public keys. This enhances the scalability of the network. This signature mechanism combines all signatures to store more transactions under a single block.
Also, the reduced signatures result in reduced cost of transaction fees, as the group of senders can split the transaction fees for all members among themselves, instead of each member paying the fees. The signature mechanism also improves the network’s privacy and token fungibility.
$BCH can be easily spent like fiat currency and also has proven scarcity like gold. Therefore, it can be used in storing value given its scarcity or making P2P payments given the transaction speed and low transaction fees. Therefore, users can pay for products at shops that accept $BCH.
$BCH can also be applied to pay for products online. Also, users can tip content creators and reward app users, among othermicro-transaction activities. Other applications include cross-border remittances and private payments.
$BCH is a deflationary token with a maximum supply of 21 million tokens. As of May 25, 2021, there are over 18.7 million $BCH in circulating supply with a $13 billion market cap, ranking the cryptocurrency 11th. New tokens are minted as block rewards for miners at 6.25 $BCH per block, as of May 2021.
The value of $BCH is independent of $BTC’s price, although the overall crypto market performance will follow BTC’s trend.
$BCH is listed on many top crypto exchanges, and the availability of the crypto in any exchange may depend on your location. Add $BCH to your cryptocurrency portfolio from these exchange platforms: Binance, Huobi Global, Coinbase, Gate.io, Bithumb, OKEx, and Bibox.
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