Bitcoin Cash Guide | Learn Everything About BCH
Bitcoin Cash (BCH) was a hard-fork from the original Bitcoin network that occurred in August 2017 to allow more transactions to be processed than its predecessor could cater for. It is a decentralised peer-to-peer electronic payment system and digital currency that has been created to enable traders, users, and merchants to send and receive regional and international payments without having to face the inconveniences of long delays and high fees.
In November of the following year, Bitcoin Cash experienced two more forks, leading to the creation of Bitcoin Cash ABC, and Bitcoin SV (Satoshi Vision). Learn what is Bitcoin Cash and how it works with our thorough guide!
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What is Bitcoin Cash?
Unlike Bitcoin, Bitcoin Cash uses bigger blocks of 8 and 32 MB to accommodate a greater number of transactions enabling miners to process and validate more transactions per second. This gets rid of the bottleneck that is usually created on the Bitcoin network due to long delays and high processing fees. Bitcoin Cash is capable of accommodating up to 25,000 transactions per block as compared to Bitcoin's 1000-1500. It can also be used as a payment mode to send money to anyone and anywhere in the world.
Bitcoin Cash (just like any other blockchain) has its own token denoted by BCH. At the time of writing, BCH is priced at $221.84 with a market capitalisation in excess of $4.1 billion.
Is Bitcoin Cash a Type of Money?
Despite better liquidity, faster processing time, and affordable transaction charges, Bitcoin Cash does not have wide enough acceptance as a payment mode to be considered as a type of money or currency. Having said that, you can spend your BCH coins on multiple retail and e-commerce outlets and websites to purchase a variety of products and services.
Is it Legally Recognized?
Since Bitcoin Cash is a derivative of the Bitcoin blockchain and is based on similar concepts, its legality falls under the same laws and regulations as Bitcoin (BTC). Apart from the countries that have outright banned cryptocurrency trading in general, Bitcoin Cash is legal to buy, sell, and available for trading through a wide range of crypto exchanges and trading platforms.
What Do People Use Bitcoin Cash For?
BCH was launched as a better and faster bitcoin. However, it has evolved into a digital asset that can be utilised in more than one ways.
- You can use BCH to send and receive payments across the globe in a quicker and more affordable manner as compared to BTC.
- BCH is accepted by many retailers and online stores, so you can use it as a payment method for shopping for products and services.
- Bitcoin Cash can serve as an investment option for both short and long term investment drivers for investors and traders who want to earn profits.
What merchants accept Bitcoin Cash?
Bitcoin Cash is currently accepted by more than 4,300 merchants as a valid payment method. It means that there is a wide range of options where you can spend your BCH tokens. Some of the top merchants are listed below:
- NameCheap.com - If you are looking to buy domain names for affordable prices with your BCH coins, this is the service you are searching for.
- Dish.com - Get your satellite TV and have loads of entertainment in your home and pay for the service with your Bitcoin Cash tokens.
- Destinia.com - Looking to plan a vacation trip? This is the website that will not only accept BCH as a valid payment mode but also arrange a wonderful vacation for you.
- eGifter.com/Gyft.com - Both services allow you to buy from a diverse range of gift cards for your loved ones using your Bitcoin Cash.
- BullionStar.com - This service is all about gold dealing and storage and accepts BCH as a valid payment method.
The Technology behind Bitcoin Cash
Bitcoin Cash is fundamentally a decentralised P2P e-cash system with an ambitious objective to become the leading global currency ensuring quick payments, near-zero payments, and the capacity to handle high transactions. Instead of using 1MB blocks, it used 8MB and 32MB blocks which can accommodate more transactions for miners to be processed and verified quickly. This solves the problem of long delays and high transaction charges.
How it All Started - The History of Bitcoin Cash
Bitcoin's community parted ways in 2017 because of two significant issues that Bitcoin was facing in terms of scalability - processing fees and long duration. That resulted in one team creating a hard fork that led to BCH, a brand new cryptocurrency that many supporters thought to be the logical progression of the original Bitcoin. At the time of the fork, all Bitcoin holders became Bitcoin Cash holders automatically. This was done to overcome the scalability issues by increasing the block size that caused the split.
Who Created Bitcoin Cash?
No single person or entity created Bitcoin Cash but there are several key figures who have played prominently in its development. Roger Ver is the person most closely associated with BCH. This early Bitcoin investor became a Bitcoin millionaire because he bought so much BTC so early, and never sold. He decried the constipation of the BTC network in 2017 and was a key champion for the Big Block group. Because every BTC holder automatically got an equal amount of BCH at the moment of the fork, Roger Ver became very rich in Bitcoin Cash, simply by virtue of his existing BTC riches. Another important figure in the Bitcoin Cash genesis was Jihan Wu, the Chinese BTC mining magnate. His ASIC devices (Application-Specific Integrated Circuit - a kind of Bitcoin mining machine) could be used to mine BCH as well. Wu's massive mining machine warehouses could switch between BTC and BCH, whichever was more profitable, and Wu could move ever closer to a controlling interest in both digital currencies. Other personalities and developers played prominently within the Bitcoin Cash movement, such as Craig "Fake Satoshi" Wright who led the Bitcoin SV hard fork on November 15, 2018.
How did Bitcoin Cash come about?
Bitcoin Cash came into being in August 2017. At that time in crypto history, Bitcoin itself was expensive and slow to the point of network crisis. A large cohort of the Bitcoin community claimed that BTC’s tiny blocks (limited to a puny 1 megabyte each) were the culprit and that expanding the block size would allow more traffic. This, they claimed, would increase network speed and reduce transaction costs. In short, the community couldn’t come to an agreement. So, rather than suffer in silence, the Big Block contingent created an adaptation of the Bitcoin software, convinced a bunch of Bitcoin miners to run it, and splintered off into a successful new chain – a chain, they said, that was the one true Bitcoin. In the months that followed, major hash wars broke out between Bitcoin and Bitcoin Cash. At several key moments, it really looked like Bitcoin miners really might jump ship en masse for the new chain, thus sending Bitcoin into a “Death Spiral”. But this never occurred. Today, the two chains operate alongside each other, though BCH has been considerably weakened by its own hard fork, and entropy that results from playing second fiddle to BTC.
What Does the Name "Bitcoin Cash" Mean?
The simple name is a historical dig toward Bitcoin's core developers. Like we said, Bitcoin was always meant to function as digital cash. When it could no longer do this, Bitcoin Cash came into being. Its name was chosen to highlight the glaring problem in the Bitcoin network, and to say to the world "We're the real Bitcoin, the one Satoshi wrote about in his original whitepaper".
What Does Bitcoin Cash Aim to Do? How Does it Work?
To its credit, Bitcoin Cash is fast and affordable digital cash. Image: Wit Olszewsk/Shuttertstock.comWe're not going to take a side in the Bitcoin Cash controversy, though we will acknowledge the perspective of both sides. In mid-2017, when Bitcoin Cash first forked, Bitcoin was slow and expensive. So slow and expensive, in fact, that Bitcoin could scarcely be used as money on busy times. In the original Bitcoin whitepaper, the term "Electronic Cash" was used right there in the title, and Bitcoin was failing at this important job. At this time, Bitcoin maximalists were saying that Bitcoin really was nothing more than a "Store of Value". Some went so far as to recommend that people use alternative chains like Litecoin for purchases and transactions. Bitcoin, as we've learned, recovered from this terrible time in its history, but the pre-fork era was a true crisis, one which could have sunk Bitcoin forever if fate had turned out differently. On the other side, many people find considerable fault in the methods and motivations of Bitcoin Cash's creators. But they did have a point: the world needs digital cash, and Bitcoin wasn't doing the trick. With its bigger blocks and instantaneously variable difficulty, Bitcoin Cash furnished this necessity with some success. If we ignore everything that came thereafter, Bitcoin Cash was, at least in part, a reasonable attempt to fix a real problem with Bitcoin.
Mining Bitcoin Cash - How Are New Coins Created?
Bitcoin Cash mining is identical to original bitcoin mining but with some considerable differences. Larger block size requires miners to have the additional computing power to crack the mathematical puzzles, but the benefit is that they get more BCH tokens as their incentive. Specialised ASIC rigs are required to mine Bitcoin Cash, and it is suggested that you utilise a profitability calculator made for crypto mining to make sure that your investment will generate enough returns to cover the cost of the hardware as well as earn you meaningful profits.
While the incentive is higher for BCH, the price difference in BTC and BCH means that the original Bitcoin has stayed more profitable. This is why BCH decreased the difficulty of BCH mining to get more miners on board.
Supply - How Many Coins Are Available, What if They Run Out?
Bitcoin Cash has a limited supply that is capped at 21 million BCH tokens. The current total and circulating supply is more than 18.5 million, which means that BCH is about to reach its point of saturation. Once the limit is reached, there will be no more remaining tokens to mine, and the price of BCH will be determined by the market forces such as supply and demand, social acceptance, strategic partnerships, new technology, regulations, and other factors.
Decentralisation - What does it mean?
When it comes to blockchain, decentralisation is a concept that means that there is no central authority such as a powerful individual, organisation, or government that has substantial control over how a blockchain or its cryptocurrency is operated. The only people who have decision-making power are the project stakeholders who do so through a transparent voting process to uphold the democratic values of blockchain-based currencies.
Bitcoin Cash as an Investment
When you are thinking about using BCH as an investment driver, you need to keep in mind the volatility of cryptocurrencies. On the one hand, they can make you a lot of money, but on the other, you can lose your entire capital. That's why it is important that you exercise caution and research about the currency before you invest in it. Moreover, it is important to diversify your investment by investing in different cryptocurrencies, so you are not putting all of your eggs in a single basket. This way, you can manage your risk.
Why Should You Invest?
There are many reasons to invest in BCH or any other cryptocurrency. This is why it is crucial that you are sure about the underlying cause of investment. This way, you will be able to choose the right strategy.
- You can invest in BCH or other cryptocurrencies to generate a passive income to support your primary income which may not be enough.
- You can keep your capital in a decentralised blockchain that's not under the control of regulations.
- You can go for short or long term investment, given your situation and preferences.
- You might want to support the Bitcoin Cash initiative and may hold BCH tokens as a contributor.
Price and Volatility - Why is the price so volatile?
Since BCH is also a decentralised cryptocurrency like all other tokens, it is not regulated by any single or central authority. There is no organisation that monitors its price movement and influences it through policymaking. This is why market factors like supply and demand, the introduction of new technology, new competitors, influencer's opinion, and a bullish run can drive the price up or down in a matter of hours, or even minutes.
This volatility can be used to make quick profits, but you have to keep in mind that it can go both ways. That’s why it is necessary to read the charts, news, articles, and expert opinions to understand the price movements before you start to invest.
Where to Buy Bitcoin Cash
As one of the most popular cryptocurrencies, BCH is available on a wide range of exchanges and trading platforms. That being said, you need to take care of a multitude of factors before you select a platform. For instance, you should look for a reputed service provider with reasonable transaction charges, great customer support, user-friendly experience, and support for multiple payment modes. Some of our top picks are listed below:
- eToro – As one of the leading copy trading platforms, eToro is your best choice to begin trading. It offers a variety of cryptocurrency CFDs, great UI, reasonable transaction fees, and expert crypto advice. You will be hard-pressed to find a better fit.
- Plus500 – Having years of experience in the trading and cryptocurrency arena, Plus500 is another excellent option for new traders. It brings the right combination of affordability, variety, reliability, and convenience to ensure a great trading experience.
- FXTB – If you are looking for something different where you can get a user-friendly UI with no-nonsense experience, FXTB is one of the platforms to consider.
Where to Store Bitcoin Cash
Once you have purchased Bitcoin Cash, it is time to store it safely, and you need a dedicated cryptocurrency wallet for that. Wallets have security features to ensure that your funds remain safe and secure.
What Are Wallets?
Cryptocurrency wallets come in two forms – hardware devices that look like flash drives and software applications that look like apps. Both types of crypto wallets are meant to hold your BCH coins safely, so you don't need to worry about your funds.
What types of wallets are available?
When it comes to the availability of BCH wallets, there is a diverse range of wallets available on the market to choose from. You can pick according to your preferences.
The wallets that are associated with your cryptocurrency exchange or trading platform account are web wallets. There are other web wallets as well that come in the form of a browser extension. They are easy to use since your funds are always accessible, but their security features are quite limited.
When you are looking for portability and trading on the go, mobile wallets are the best option. They are usually available in the form of Android and iOS apps that you can install on your device. They have a wide range of features with reasonable security. Some of the top BCH mobile wallets include BRD, Copay, Edge, Jaxx, IF Wallet, Bitpay, Mobi, and Gemini.
These are software apps that you can install on your Windows PC or iMac to hold your BCH safely. These wallets offer enhanced security features and often have a built-in trading option that many traders love to use. Exodus and Atomic Wallets are good options if you want a desktop wallet. Badger Wallet, Electron Cash, BitPay, and Exodus are some excellent desktop wallets for BCH.
When your topmost concern about your BCH tokens is security, there is nothing better than a hardware wallet. These gadgets look like flash drives and have zero internet connectivity to ensure that nobody can hack into them through a network. Moreover, they also feature 2FA and passphrase protection. Ledger Nano S/X and Trezor are good choices for storing BCH.
If you want the best of both worlds, then you will need to use the right combination of different wallets. Most of the aforementioned wallets can be interconnected to ensure cross-platform and cross-device support.
Storing your wallet on an exchange, the potential upside and downside
If you are storing your BCH on an exchange, you can quickly access them, and you won’t have to deal with the additional hassle of managing dedicated crypto wallets. They deliver convenience and quick accessibility. However, on the other hand, they are not as secure as dedicated wallets since exchanges are prone to cyber-attacks and security breaches. Moreover, if the site is down, you cannot access your funds until the issue is fixed.