Bitcoin Cash: The modernized bitcoin
In contrast to the other bitcoin forks, Bitcoin Cash does not appear as a project that is parasitizing on the success of BTC. This is an excellent example of a genius kid being lucky
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The BCH founders' motivation came from the admirable desire to protect Satoshi Nakamoto's creations. The project has a group of very dedicated, sometimes even intransigent followers. They believe Bitcoin Cash is the genuine Bitcoin and that other cryptocurrencies disappear. Roger Wer, a “crypto-evangelist”, is an example of such a fanatical follower.
History of Bitcoin Cash
The bitcoin fork emerged from a desire to improve bitcoin's functionality as a means of payment. This enterprise involved accelerating transactions, which at that point were taking hours to complete, and reducing fees. After that, there was intense debate concerning scalability in the community.
While some followers sought to maintain current block sizes, they considered updating the Segwit protocol (putting transaction signatures in a separate structure to remove 50% of the data load on the block) to be a long-term solution. On the other side of the community, mainly represented by miners, a larger block size has been seen as an option to handle more data.
The two groups decided to split into different branches of the same blockchain, as they were unable to reach consensus.
On August 1, 2017, as a result of a hard fork, a new cryptocurrency emerged: Bitcoin Cash. Since that date, BTH transactions are recorded on a separate blockchain.
There are, however, no typical cryptocurrency attributes like CEO, investors, or information partners in the new cryptocurrency. This project is decentralized and community-driven through voting.
BTC and BCH: common ground and the difference
The Bitcoin Cash blockchain has nearly identical characteristics to the Bitcoin network because it is based on the latter. The Bitcoin Cash blockchain has nearly identical characteristics to the Bitcoin network because it is based on the latter. Blocks are generated every 10 minutes and are limited to 21,000,000. Currently, the total supply is around 19,313,981 coins. This is approximately 92% of the maximum supply. In addition, halving is used for controlling emission: for every 210,000 blocks, the remuneration to miners is halved.
Yet there are several crucial differences.
1. Mining. BCH uses the same consensus protocol (Proof-of-Work) with the same hash (SHA-256). But the complexity of mining on the BCH network is much lower. You can use BTC mining equipment to forge coins, but with a few adjustments. Keep in mind that BCH mining is not very profitable due to low validator commissions.
2. Block size. At first, Bitcoin Cash had a block size of 8MB, 8 times larger than the original Bitcoin network. This provided the ability to process up to 20,000 transactions per second. In 2018, the size was increased to 32 MB, and the network is now capable of processing up to 40,000 transactions per second. The issue with BCH blockchain is that it is not widely used, which makes such TPS unclaimed.
3. Transaction validation. One of the main features of the Bitcoin Cash network is the ability to accept transactions that are deemed completed without validation via the blockchain. On the one hand, one could see this as an advantage because it speeds up the process of data exchange. However, that's also a serious vulnerability to double-spend attacks. For this reason, the network gives miners the power to control transactions using unique IDs. As a result, they are able to ensure that the same coins are not spent twice.
The Benefits and Drawbacks of Bitcoin Cash
As a fork product, Bitcoin Cash emerged as the response to the first cryptocurrency's scalability issue. To be in the top three in terms of capitalization, however, it proved insufficient.
The benefits of Bitcoin Cash:
- High scalability and, as a consequence, swift transactions;
- Low user fees.
Drawbacks of Bitcoin Cash:
- Due to the modest rewards for discovering a block, mining has low margins;
- 51% attack vulnerability;
- Ongoing quarrels and scandals in the community that competes with BTC.
So far, BCH does not seem like an attractive investment opportunity because it is more of a speculative asset. There is no revolutionary forward-looking solution on the horizon, there is no permanent development team and the applied value of the coin is dubious.
Bitcoin Cash cryptocurrency's main advantage is its name, which makes it stand out in the battle for acceptance as a means of payment. Another asset of BTC Cash is a lobbying group managed by Roger Wehr, who knows how to attract investors with his eloquence and charisma.
Therefore, we can be certain that BCH cryptocurrency will not disappear like many of the copycat projects, but we cannot predict a major breakthrough either.
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