What is Bitcoin Cash (BCH)?
Bitcoin Cash was launched in August 2017 as a fork of the original Bitcoin (BTC). In November 2018, Bitcoin Cash itself forked, resulting in Bitcoin Cash ABC (now known simply as ‘Bitcoin Cash’) and Bitcoin SV (BSV). Compared to the original Bitcoin, BCH offers faster, cheaper transactions.
The original fork was the result of a disagreement in the Bitcoin mining community over the future direction and focus of the cryptocurrency. In a nutshell, those who stuck with the original Bitcoin the crypto mainly as a store of value, or ‘digital gold’, whereas those who drive the Bitcoin Cash hard fork envisioned it more as a medium of exchange – a type of digital cash.
Although the hard fork caused some bad blood in the Bitcoin community, and there were teething problems, Bitcoin Cash remains a well-supported and widely accepted crypto – although lagging far behind the original Bitcoin. High-profile backers include entrepreneur Roger Ver (a.k.a. ‘Bitcoin Jesus’) and Chinese billionaire and co-founder of Bitmain, Jihan Wu.
Today, Bitcoin Cash is widely regarded as a major altcoin, and has proven itself to be reliable and secure – its lower fees and faster speeds making it popular for online retail and gaming.
Bitcoin Cash (BCH) Basics
Although both Bitcoin and Bitcoin cash are proof-of-work blockchains that share many similarities, there are some major differences.
Bitcoin Cash Blockchain
One of the main differences between Bitcoin and Bitcoin Cash is that the former has a block size of 1MB compared to the latter’s 32MB. Additionally, while the original Bitcoin implemented SegWit, allowing a second later transaction network, Bitcoin Cash did not.
Bitcoin Cash Mining
Like Bitcoin, Bitcoin Cash relies on a proof-of-work consensus mechanism to secure the network. Also, like Bitcoin, to profitably mine BCH you now need to use dedicated ASIC machines and have access to cheap electricity – which is why only large mining companies or pools, who benefit from scale, can do it.
Bitcoin Cash (BCH) Supply
Again, like the original Bitcoin, Bitcoin Cash has a limited supply of 21 million.
Bitcoin Cash (BCH) Adoption & Usability
Although Bitcoin Cash is more useful for everyday transactions, thanks to its lower fees, it is far less popular than Bitcoin. Illustrating the gulf between them, at the time of writing in November 2022, the market capitalization of BTC was around $317 billion, compared to BCH’s $2.1 billion.
One of the reasons for BCH being far less popular is the infighting that surrounded both the original hard fork and the subsequent hard fork that gave rise to Bitcoin SV. This divided the Bitcoin community and saw most developers stick with the original. Despite this, BCH is still relatively widely accepted as a payment method by online retailers and service providers.
Bitcoin Cash (BCH) Fees & Speed
The average transaction fee on the Bitcoin Cash network is just a fraction of a cent – making it orders of magnitude cheaper than Bitcoin. However, when it comes to transaction times, the network is comparable to Bitcoin. Although a transaction can be processed in 10 minutes, it can take up to 150 minutes for it to be fully confirmed and thus irreversible.
Bitcoin Cash Security and Safety
Because it uses a proof-of-work consensus mechanism and is fully decentralised, many people consider Bitcoin Cash to be inherently more secure than proof-of-stake cryptos. However, compared to the original Bitcoin, BCH’s smaller network does make it, theoretically at least, more vulnerable.
Still, as always, the biggest threats to security and safety come when using your BCH with third-party applications, like exchanges and wallets.
Security and safety tips:
- Don’t leave your BCH on-exchange for longer than absolutely necessary. If you are not currently trading, transfer them to a local wallet for short-term storage or staking.
- For long-term storage or staking, keep your crypto in a hardware wallet.
- Always keep your wallet keys in multiple safe places – they cannot be recovered.
- Never tell anyone about your crypto holdings. No matter how secure your storage is, if you or your loved ones are physically threatened, you’ll probably hand over your personal keys.
Despite dropping from just under $760 to less than $210 within days of launching in August 2017, Bitcoin Cash nevertheless rocketed to over $3,785 by mid-December of the same year. However, it then crashed, hitting just under $77 on 16 December 2018. After a more modest bull run in 2021, which saw BTC approach $1,550 in May, it had dropped back down to just over $110 by November 2022.
Final Word on Bitcoin Cash (BCH)
Bitcoin Cash is one of those projects that evokes a lot of passion in the crypto community – both in support and opposition. Both those who stuck with the original Bitcoin and those who later broke away to support Bitcoin SV consider it to be irrelevant and assume it will fade into obscurity. And, it has continued to slide down the rankings as newer cryptos take market share.
On the other hand, Bitcoin Cash still has a decent following of very loyal supporters, and is one of the more prominent and widely accepted altcoins. The question is, how far will Bitcoin’s ‘original’ bloodline take it, and will the community innovate further?