Bitcoin Cash Wiki ▷ What is BCH? Cryptocurrency & more!
Find out everything you need to know in our Bitcoin Cash Guide. We explain what Bitcoin Cash (BCH) is, what it does and give an insight into the project. We ask that you exercise caution before making cryptocurrency investments and encourage you to do your own research.
What is Bitcoin Cash?
Bitcoin Cash was born from a hard fork of Bitcoin in August 2017. The Bitcoin community essentially split in two as there was disagreement over how Bitcoin should be scaled. The Question of scaling mattered as the bitcoin community saw the need for the bitcoin network to process more transactions per second due to its increasing popularity. After all, a currency that takes days or weeks to complete a transaction and charges high fees is pretty much useless.
The Bitcoin community favored an off-chain scaling solution, while Bitcoin Cash supporters favored an on-chain solution. Today Bitcoin has a block size limit of 2MB and Bitcoin Cash one of 8MB, with further increases possible. The Bitcoin community believes that processing some off-chain transactions is and has the best solution created the Lightning Network. This Lightning Network processes transactions from the mainchain and thus prevents the mainchain from being overloaded.
This disagreement creates a confusing situation where we have more than one bitcoin. The differences are not only technically ideological, as the two groups have different visions of the future. But Bitcoin and Bitcoin Cash are two independent of each other crypto currencies. Therefore, do not confuse one coin with the other, even if the names are very similar.
The two Bitcoin communities have deep differences. Supporters of both cryptocurrencies usually comment negatively about the other coin. Just take what you read about Bitcoin and Bitcoin Cash with a pinch of salt and make sure you make your own decision when it comes to investing in either cryptocurrency.
Technical differences between Bitcoin & Bitcoin Cash
Bitcoin supporters argue that Bitcoin was never intended for micropayments like buying a McDonald's. Instead, Bitcoin is of greater value to a store and transfer, similar to the role of gold. The community's Bitcoin Cash side disagreed, arguing that Bitcoin should be used like cash. Hence the name Bitcoin Cash.
Increasing the block size to 8 MB means that Bitcoin Cash can process 2 million transactions per day. This volume can be further increased by increasing the block size. Increasing the block size may sound like a good idea, but it comes with complications. Increased block size essentially increases the speed of the network, and larger blocks mean more data to process for each transaction. This means that smaller miners cannot process the transactions, only larger ones.
The result is that the larger actors take increasing control of the network and it becomes more centralized. However, no miner on the Bitcoin network is big enough to control 51% of the network, and the number of mines is exceptionally high. With Bitcoin Cash, on the other hand, there are only 3 mining pools and together these actors control more than 51% of the network.
Bitcoin Cash is therefore much more centralized than Bitcoin. Centralization in and of itself does not necessarily have to be negative, it depends on whether the community trusts these few actors to act correctly.
What other differences are there?
Although Bitcoin Cash uses the same code base as Bitcoin, there are a few other changes besides increasing the block size.
- Different hash algorithm: Bitcoin Cash uses a different process than Bitcoin. This means that the two blockchains cannot communicate with each other. In practice, this means that you have to be very careful when sending Bitcoin or Bitcoin Cash to a wallet. If you don't have the correct address and instead send Bitcoin Cash to a Bitcoin wallet address, for example, you will most likely lose your BCH.
- The difficulty of mining can be changed: The difficulty of mining Bitcoin Cash can be changed based on the number of miners to ensure the stability of the crypto. With Bitcoin it is fixed.
- Transaction signatures are different: These are different for Bitcoin and Bitcoin Cash.
Bitcoin & Bitcoin Cash: The Difference In Visions
The reason the Bitcoin and Bitcoin cash communities don't like each other is political. Bitcoin Cash supporters even go so far as to say that BCH is the "real Bitcoin" and the cryptocurrency that most closely matches Satoshi Nakamoto's whitepaper (Satoshi was the inventor of Bitcoin).
Also, they argue that the block size should be increased so that Bitcoin can be used like cash: from large transactions for buying companies to micropayments for chewing gum. The Lightning Network is not popular among BCH fans because they see it as a form of financial institution.
It is said that this will lead to the very corruption and greed that Bitcoin wanted to eradicate in the first place. Some BCH supporters believe that Bitcoin developers purposely clogged the Bitcoin chain in order to monetize off-chain solutions like the Lightning Network.
Bitcoin supporters accuse Bitcoin Cash of stealing the Bitcoin brand name, centralizing it and implementing a more insecure network solution. Just as Bitcoin Cash supporters refuse to name the original cryptocurrency "Bitcoin" and instead refer to it as 'Bitcoin Core', Bitcoin supporters are also trying to separate themselves by name. They call Bitcoin Cash BCASH and complain that Bitcoin Cash's website is Bitcoin.com.
The future of Bitcoin Cash
Nobody knows whether Bitcoin Cash and Bitcoin can coexist in the future or which of these cryptocurrencies will win. Bitcoin relies on the Lightning Network as a scaling solution. Bitcoin Cash is betting on increasing the block size.
If Bitcoin Cash lives up to its vision of being an alternative to regular currency, you might find yourself using BCH for everyday transactions. Imagine a world where a single currency is used regardless of where you are.
This could wipe out the forex business overnight and instead of exchanging USD for EUR for your vacation, for example, you would simply bring your Bitcoin Cash wallet with you. Bitcoin Cash questions the way we deal with money and we are very excited about what the future will bring and how money will develop in general.
The Team
Bitcoin Cash has a network of developers working on the project. The talent of this team cannot be questioned, but instead of introducing each individual member, we focus on the Bitcoin Cash figurehead Roger Ver. Roger is a controversial figure, yet he is the most visible supporter of Bitcoin Cash and one of the most influential people in the community.
Born in Silicon Valley, it may come as no surprise that Roger was destined to be deeply involved in the tech industry. After starting the successful Memory Dealers company, Ver began investing in Bitcoin in 2011.
Roger saw the potential of technology and it complemented his liberal values. In 2000, he even ran for the California State Assembly as a candidate for the Libertarian Party. As a smart businessman, Ver started out in cryptocurrency startups like Bitpay, Creak, Ripple and Blockchain.info to invest. His company Memory Dealers was the first to accept Bitcoin as a payment method. Roger also owns the Bitcoin.com domain, which is now used as the official Bitcoin Cash website.
No matter how controversial Roger Ver is, the point is that he is a pioneer. He was one of the first to adopt Bitcoin, investing in cryptocurrency startups when no one else took them seriously. He has a huge part in where the crypto world is today.
Ver's early support and adoption of Bitcoin resulted in the nickname 'Bitcoin Jesus'. There is no doubt that his support for the Bitcoin Cash project will be key to its success.
The ICO of Bitcoin Cash
Bitcoin Cash didn't have an ICO. When Bitcoin split into Bitcoin and Bitcoin Cash in August 2017, Bitcoin holders received the same amount in BCH. For example, if you had 2,5 bitcoin, you received an additional 2,5 bitcoin cash. Essentially, Bitcoin owners got a very valuable cryptocurrency completely for free.
Should I invest in BCH?
It is entirely up to you whether or not to invest in Bitcoin Cash. However, we would be happy to give you our thoughts on the project:
Benefits
- Bitcoin Cash strives to become the best form of digital cash.
- The transaction times are faster than Bitcoin.
- Transaction fees are cheaper than Bitcoin.
- Bitcoin Cash is focused on merchant acceptance.
Disadvantages
- Bitcoin Cash is currently heavily centralized. This harbors the risk that key players will not act in the best interests of the BCH community.
- The majority of the cryptocurrency community supports Bitcoin versus Bitcoin Cash as the "real" Bitcoin. Over time, however, that support could shift to Bitcoin Cash, but until then, BCH will always be overshadowed by Bitcoin.
How to Buy Bitcoin Cash (BCH)
The easiest way to buy Bitcoin Cash is the way via Coinbase. Here you can buy BCH with regular currencies like USD, EUR or GBP.
Summary
The Bitcoin-News.one team is very interested to see if Bitcoin Cash can increase the adoption of cryptocurrencies. If Bitcoin Cash becomes the peer-to-peer digital currency it seeks to be, then there is no doubt that it will be exceptionally valuable.
Both Bitcoin and Bitcoin Cash are similar cryptocurrencies. The difference lies in the level of support available and the technological adjustments made to the original code base and vision. Only time will tell if the Bitcoin Cash scaling solution is the right one.
