Bitcoin Cash (BCH) is a cryptocurrency that was created in 2017 as a result of a hard fork of the Bitcoin blockchain. A hard fork is a change to the underlying protocol of a blockchain that is not backwards-compatible, meaning that users who do not upgrade to the new version will be unable to participate in the network.
Bitcoin Cash was created to address some of the scalability issues that were faced by the Bitcoin network. The Bitcoin blockchain can only process a limited number of transactions per second, which can lead to slow transaction times and high fees. Bitcoin Cash aims to increase the transaction throughput of the network by increasing the block size limit, which allows more transactions to be processed per block.
Like Bitcoin (BTC), Bitcoin Cash is decentralized, meaning it is not controlled by any government or financial institution. It is created and managed by a network of users around the world who run specialized software that verifies and processes transactions. This process is known as “mining,” and users who contribute their computing power to the network are rewarded with Bitcoin Cash.
What are the main differences between Bitcoin (BTC) and Bitcoin Cash (BCH)
There are several key differences between Bitcoin (BTC) and Bitcoin Cash (BCH):
- Block size: One of the main differences between BTC and BCH is the block size limit. Bitcoin has a block size limit of 1 megabyte, while Bitcoin Cash has a block size limit of 32 megabytes. This means that Bitcoin Cash can process more transactions per block, potentially leading to faster transaction times and lower fees.
- Purpose: Bitcoin was created as a decentralized digital currency, but has changed significantly over the years to be a settlement layer, while Bitcoin Cash was created to address some of the scalability issues faced by the Bitcoin network and continue the work of Satoshi Nakamoto for a peer-to-peer cash system.
- Mining: Both BTC and BCH use a proof-of-work consensus algorithm for mining, but they have slightly different rules for rewarding miners.
- Acceptance: Bitcoin is more known and recognized than Bitcoin Cash, and it has a larger network of users. However, this has changed in recent years as BCH has become more widely accepted by merchants and is being used as a means of exchange and not just a store of value.
- Gold vs. Cash: Essentially Bitcoin (BTC) aims to be a digital store of value, much like gold, where it’s held and valued based on speculation because it has intrinsic value with decentralization and it being fungible. Bitcoin Cash (BCH) on the other hand aims to not only be valuable, but also be used as a digital cash, person to person without any intermediaries so it’s value is derived from it’s utility instead of it’s perceived value.
Bitcoin Cash can be bought and sold on cryptocurrency exchanges, and it can be stored in a digital wallet. A digital wallet is a software program that stores your Bitcoin Cash and allows you to send and receive Bitcoin Cash online. There are several types of digital wallets available, including online wallets, mobile wallets, and hardware wallets. It is important to choose a secure digital wallet to protect your Bitcoin Cash from being stolen or lost.
The value of Bitcoin Cash, like other cryptocurrencies, can fluctuate significantly. It is determined by supply and demand on the market, and it can be influenced by a variety of factors, such as the overall performance of the cryptocurrency market, regulatory developments, and media coverage.
Investing in Bitcoin Cash, or any cryptocurrency, carries a high level of risk. The value of cryptocurrencies can fluctuate dramatically, and there is the possibility of losing all of your investment. It is important to do your own research and carefully consider the risks before investing in any cryptocurrency, including Bitcoin Cash.
There are also potential risks associated with using Bitcoin Cash for transactions. Because it is decentralized and not backed by any government or financial institution, there is no customer protection if something goes wrong with a transaction. It is important to be cautious and only use reputable sources when buying or selling Bitcoin Cash, and to keep your digital wallet secure.
Despite these risks, Bitcoin Cash has gained a significant following and is used for a variety of purposes, including buying and selling goods and services online. It has also been used in charitable causes, such as the Bitcoin Cash Fund, which raises money for charitable causes using Bitcoin Cash.
In conclusion, Bitcoin Cash is a cryptocurrency that was created in 2017 as a result of a hard fork of the Bitcoin blockchain. It aims to address some of the scalability issues faced by the Bitcoin network by increasing the block size limit. Bitcoin Cash is decentralized, meaning it is not controlled by any government or financial institution, and it can be bought and sold on cryptocurrency exchanges and stored in a digital wallet. The value of Bitcoin Cash can fluctuate significantly, and it is considered highly speculative and risky. It is important to carefully consider the risks before investing in any cryptocurrency, including Bitcoin Cash.