~ Digital currency
The success of Bitcoin has been a major inspiration for other digital currencies. The crypto space has been evolving at an amazing pace over the years with Bitcoin hitting its all-time high (ATH) despite the criticisms it has faced since its creation. The emergence of Bitcoin Cash started with agreements and disagreements regarding the ways to improve the Bitcoin blockchain.
When Satoshi Nakamoto invented Bitcoin, the coin was designed to be a peer-to-peer crypto that anyone can use for daily transactions. But with time, things changed as Bitcoin’s price surged while it increasingly gained mainstream adoption. Bitcoin became less of a currency and now more of an investment vehicle for most users which wasn’t the original intention of Satoshi.
This also affected its blockchain as it started experiencing scalability issues since it was unable to handle the number of transactions on the network. Consequently, the transaction fees, as well as confirmation time on bitcoin’s blockchain, surged. One major reason for this is the block size of the Bitcoin blockchain which is 1 MB.
The major challenge with Bitcoin has to do with scalability, so as more people begin to use the cryptocurrency, the network will require more time to process all the transactions. This ends up increasing the transaction fees and drastically reducing the speed of the transactions. Well, most Bitcoin enthusiasts realized the extent of this challenge especially with the increasing popularity of the crypto. So, this led developers to suggest two different solutions.
The first solution they suggested was changing the format of every block on the bitcoin blockchain while the second option was to increase the size of the block. Those who favored increasing the size of the block believe that changing the format of the block was a bad idea. They felt that while the solution would increase the speed of transactions, it will eventually get to the point where an upgrade would be needed, especially when Bitcoin’s popularity increases further.
The most Popular Idea
For any change to be made to the Bitcoin blockchain, majority of the people in the network must agree on the specific changes. This explains why the Bitcoin network decided to vote on the two ideas and guess who won? Of course, the first idea got about 97 percent of all the votes meaning that most people prefer a change in the format of each block while a few of them favored an increase in the block size.
But to implement this change, the Bitcoin blockchain would need a “soft fork.” Those who were in support of the second idea weren’t satisfied with the final decision. They chose to carry out a hard fork and this led to the creation of Bitcoin Cash (BCH).
At the time BCH was proposed, the average number of bitcoin transactions per block was between 1,000 and 1,500. During the stress test of Bitcoin Cash’s blockchain in September 2018, the number of transactions was about 25,000 per block. Roger Ver and other proponents of Bitcoin Cash usually invoke Nakamoto’s initial plan for Bitcoin (which is payment as a service) to justify the need to increase the size of the block.
Bitcoin Cash further went through a hard fork just a little more than a year after it was launched. Guess why it underwent a hard fork? For the same reason it split from Bitcoin. The hard fork led to the creation of two different versions of Bitcoin Cash — Bitcoin Cash SV (Satoshi Vision) and Bitcoin Cash ABC.
So, what Exactly is Bitcoin Cash?
It’s a peer-to-peer electronic money for the internet that’s decentralized. It doesn’t need the services of trusted third parties to function. It shares so many things in common with Bitcoin. For instance, it has the same number of coins which is 21 million. The primary purpose of Bitcoin Cash is to serve as a payment system. So, anyone can send and receive funds but since it has increased its block size, the transactions are faster and it also has lower transaction fees.
After the separation from Bitcoin, Bitcoin Cash has made several changes and added new features. It increased its block size to 32 MB and adopted several features from other digital currencies like a functionality that allows users to launch new tokens on the Bitcoin Cash blockchain. Just like many other cryptos, Bitcoin Cash is an experiment and as the market evolves, we will learn new lessons based on the differences between Bitcoin and BCH.
There are over 2000 cryptocurrencies in existence but experts have predicted that a good number of these digital currencies will cease to exist with time. In fact, some have failed and more will fail the test of time. You will find the book “The Digital World of Crypto riches” very useful if you want to discover some of the best performing cryptos. The book is a collection of cryptocurrencies that have a higher chance of succeeding, their use cases, challenges and achievements so far.
But what gives Bitcoin Cash Value?
Those behind the coin strongly believe that when transactions on the network are cheaper, consumers will prefer to use BCH for all their online transactions and this will in turn make the coin valuable. BCH still has several properties like Bitcoin, especially its scarcity and limit to the number of BCH that can ever be created which is 21 million.
When the amount of new Bitcoin Cash coins being introduced to the network (which is scheduled to decline) starts to decline via halving, then scarcity will influence the forces of supply and demand making BCH more valuable when the demand for the coins far exceeds its supply.
The number of BCH that was in circulation as of the end of 2019 was 18.1 million and 12.5 BCH was introduced with each block — this figure changed to 6.25 on April 8, 2020. When we consider the similarities between BCH and Bitcoin, then many traders may see the crypto as a hedge that can cut down on their risk if for any reason Bitcoin’s roadmap eventually limits its adoption or renders the technology less valuable.
The currency is still new since it was created in 2017 and the number of merchants accepting it are not much especially when compared to Bitcoin. But new merchants are beginning to accept it as a payment method while it becomes more popular. If you’re interested in finding a website or merchant that allows you to use BCH for making payments, you can visit this cool site known as AcceptBitcoinCash.
Some of the websites include those that offer products and services like clothes, music, fitness products, perfumes, casinos and several others. It’s easy to buy Bitcoin Cash because most exchanges that list Bitcoin also lists BCH. In fact, it is listed on Coinbase and this further increased its credibility as a cryptocurrency that has great potentials. Other exchanges where you can buy BCH include Binance, Bittrex, and Kraken.
Apart from being used for making payments, Bitcoin Cash can also serve as a viable investment opportunity since its price is extremely volatile. Investors can take advantage of the significant fluctuations within a short time. Always remember that the volatile nature of cryptos could lead to a significant loss, so consider investing with funds you can afford to lose.
~ The official website of Bitcoin Cash is https://www.bitcoincash.org/
Find out more about Bitcoin Cash as well as other digital currencies by reading “The Digital World of Crypto Riches.” You will discover some of the top-performing cryptocurrency projects that have the potential for profits, available on Amazon:
https://read.amazon.com/kp/embed?asin=B08MZ37PF4&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_V7K447G4H8VQRJBW445W