Bitcoin Cash Review: All You Need To Know About Bitcoin Fork 0/0
Bitcoin Cash Review: All You Need To Know About Bitcoin Fork
What is Bitcoin Cash?
Bitcoin cash is a decentralized digital currency that allow users to make instant payment to anywhere in the world for a near-zero cost.
It was born out of necessity to solve the scaling issues of the original Bitcoin network. As the adoption of bitcoin increased globally, the network struggled to keep up with the volume of transactions. This resulted in slower transaction time and higher fees.
This caused Bitcoin’s dominance to fall from 95% to as low as 40% as many users left the network to seek for alternatives. In an effort to improve the efficiency of transactions, Bitcoin Cash broke off from the original bitcoin network on August 1, 2017.
The network aims to take bitcoin in a new direction geared toward faster transaction speeds and lower fees. Its overall goal is to increase the number of transactions that can be processed by the network, hoping that the cryptocurrency will be able to compete with the volume of transactions that industry giants like PayPal and Visa can currently process.
The Bitcoin Fork Story
Upon the creation of Bitcoin Core, the size of a block of transaction was limited to 1 MB. This was intended to lower the possibility of potential spam and DDoS-attacks. However, as the network gained widespread adoption the limit started causing blocks to pile up resulting to slower transaction times. Some users had to pay extra fees to speed up the confirmation of their transactions.
This issues basically rendered Bitcoin unreliable as a payment method, causing many users to abandon the network for other alternatives.
Finding a solution to the problem was morassed as the bitcoin community had to split between two groups with opposing viewpoints.
Some developers were in favor of restructuring the way data was stored in the existing blocks by implementing the Segwit Technology. This technology, developers claimed would free up a lot of storage space and increase the speed of confirmation. But not every person supported the proposal as many believed it was a complicated approach and will only address the issue temporarily.
Another group within the bitcoin community was in favor of increasing the size of the blocks in the blockchain to accommodate more transactions and speed up the confirmation times. However, this group of developers could not get enough support from the larger bitcoin community to form the necessary consensus to implement the suggested feature and as a result had to split from the original bitcoin network. A hard fork which took place on Aug. 1, 2017 gave birth to a new currency, the Bitcoin Cash.
A cryptocurrency hard fork is basically a creation of a new and independent protocol from an existing one. This requires all nodes or users to upgrade to the latest version of the protocol software. The original and the forked version of the cryptocurrency have identical Blockchains all the way up to the block when the split occurred. From there on, the two networks exist independently.
After the Hard Fork, Bitcoin Cash became a new, separate currency, everyone who had Bitcoins before the hard fork received the same amount in Bitcoin Cash wallet. The cryptocurrency has quickly risen among the top players of the cryptocurrency community, sitting 4th at the table with a market capitalization of about $18 billion at the time of writing.
How is Bitcoin Cash different from Bitcoin?
Bitcoin cash has become Bitcoin’s most successful offshoot as it provides solution to Bitcoin’s core challenges. While Bitcoin remains superior to every other cryptocurrency, Bitcoin cash have some advantages over it;
Transaction Speed: The biggest difference between bitcoin and Bitcoin Cash has to do with the size of blocks on the blockchain. Bitcoin Cash raised the block size limit from bitcoin’s 1MB up to 8MB as part of a massive on-chain scaling approach. This enables the network to process larger transaction volumes faster and for lower fees.
Mining: The smooth operation of any cryptocurrency is dependent on its miners. Bitcoin cash has some interesting features that have attracted a lot of miners to the network, significantly improving its hash rate. The varying difficulty levels involved in mining bitcoin cash allows miners to generate larger profits at a faster rate than mining bitcoin.
Decentralization: Although Bitcoin was initially intended to be a decentralized payment method, some of its features tend to be centralized. Bitcoin Cash is different in a way that it offers a 100% decentralized network for making online payments.
How does Bitcoin Cash Work?
Bitcoin cash enables instant payment of funds to anywhere in the world for a very small fees. It’s overall goal is to increase the number of transactions that can be processed by the network and remaining totally decentralized.
Like every other payment currency, bitcoin cash enable users to buy and sell commodities online. Merchants and users are empowered with low fees and reliable confirmations. It has also proven to be a great store of value. Since its inception in 2017, its value has increased exponentially and at the time of writing, Bitcoin cash is the second most valued digital currency after Bitcoin.
How can i get Bitcoin Cash?
If you had some bitcoin in your digital wallet before the August 1 fork, you might already have Bitcoin Cash. The same private keys associated with your bitcoin wallet can be used to access equal holdings in Bitcoin Cash. If you don’t have any, there are a few ways to get your hands on Bitcoin cash.
Mining: Bitcoin cash is mineable as it exists on its native blockchain. Mining involves the use of powerful computing hardwares to perform complex mathematical calculations. By mining bitcoin cash, you support the network and earn some of the currency at the same time. It is found to be even more profitable than bitcoin mining.
Exchange: The easiest way to get bitcoin cash is to purchase from cryptocurrency exchange. There are two ways to get this done;
- Crypto-to-Crypto Trade: If you have other digital currencies like Bitcoin, Etherium or Litecoin, you can easily exchange them for Bitcoin cash through a cryptocurrency exchange. This can be done by searching for an exchange with support for bitcoin cash and then register to execute the trade. Bitcoin cash can be discovered on exchanges under the cryptocurrency symbol BCH.
- Fiat-to-crypto trade: If you currently have no cryptocurrency investment and you wish to begin with Bitcoin cash you can purchase it with your local currency. Some exchanges allow users to purchase BCH with fiat currencies like USD, Euro or Pound Sterling etc. Not every cryptocurrency exchanges features this type of trade, you’ll have to look for one that supports a fiat/crypto pair.
Let’s have a view of some of the exchanges where you can purchase Bitcoin cash.
Where to buy Bitcoin Cash
Bitcoin cash is a new currency and as such only have a few markets trading them at the moment. I have narrowed down the top exchanges where you can buy/sell BCH below;
Is Bitcoin Cash a Good Investment?
Bitcoin cash have not been around for long but has established itself as one of the top cryptocurrencies. At only 9 months of existence, the cryptocurrency has become the second most valued cryptocurrency at $1,064 for 1 BCH and also the fourth largest cryptocurrency according to market capitalization.
The network has a specific goal; to make bitcoin cash a global decentralized payment network that will be able to compete with the volume of transactions that industry giants like PayPal and Visa can currently process. The network is currently able to process 61tps and is pushing forward with new implementations.
The cryptocurrency have gained a wide range of adoption as it sees a daily trade volume of over $500 million. To many investors, It has become the solution to bitcoin’s scaling issues and the cryptocurrency user base have continued to grow daily.
Although, cryptocurrencies like BCH presents good investment opportunities, they come with a setback which is instability and as such you can never predict what the future holds for these currencies.
If you’ve gone through this course, I’m sure you are now able to decipher the difference between Bitcoin and Bitcoin cash and whether the cryptocurrency offers a good investment and trading opportunity.
Generally, every investment and trading move involves some risk. It is very important to conduct your own research when making a decision.
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