Bitcoin Cash Wiki ▷ What is BCH? Crypto currency & more!
Our Bitcoin Cash Guide tells you everything you need to know. We explain what Bitcoin Cash (BCH) is, what it does and give an insight into the project. We ask you to be careful before making crypto-currency investments and encourage you to do your own research.
What is Bitcoin Cash?
Bitcoin Cash was born in August 2017 from a Bitcoin hard fork. The Bitcoin community essentially split into two parts due to disagreement over how Bitcoin should be scaled. The issue of scaling was important because the Bitcoin community saw the need for the Bitcoin network to process more transactions per second due to increasing popularity. After all, a currency that takes days or weeks to process a transaction and high fees are charged is quite useless.
The Bitcoin community favored an off-chain scaling solution, while Bitcoin Cash supporters preferred 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 out-of-chain transactions is the best solution and has created the Lightning Network for this purpose. This Lightning Network processes transactions from the mainchain and thus prevents the mainchain from becoming overloaded.
This disagreement creates a confusing situation where we have more than one Bitcoin. The differences are not just technical ideological, as the two groups have different visions of the future. But Bitcoin and Bitcoin Cash are two independent crypto currencies. So don't confuse one coin with the other, even if the names are very similar.
The two Bitcoin communities have deep differences. Supporters of both crypto-currencies usually have negative opinions 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 one of the two crypto currencies.
Technical differences of Bitcoin & Bitcoin Cash
Bitcoin supporters argue that Bitcoin was never intended for micropayments such as the purchase of a McDonald's. Instead, Bitcoin is for a store and transfer of greater value, similar to the role of gold. The Bitcoin Cash side of the community 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 brings complications. An increased block size essentially increases the speed of the network and larger blocks mean more data to be processed for each transaction. Therefore, smaller miners cannot process the transactions, only larger ones can.
The result is that the larger players take increasing control of the network and it becomes more centralised. However, no miner in the Bitcoin network is large enough to control 51% of the network, and the number of mines is exceptionally high. Bitcoin Cash, on the other hand, has only 3 mining pools and together these players control more than 51% of the network.
Bitcoin Cash is therefore much more centralised than Bitcoin. Centralization in itself does not necessarily have to be negative, it depends on whether the community trusts these few players to behave properly.
What other differences are there?
Although Bitcoin Cash uses the same code base as Bitcoin, there are several other changes besides increasing the block size.
- Different hash algorithm: Bitcoin Cash uses a different method than Bitcoin. This means that the two block chains cannot communicate with each other. In practice, this means that you must be very careful when sending Bitcoin or Bitcoin Cash to a wallet. If you do not 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 the 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. For 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 why the Bitcoin and Bitcoin Cash Communities do not like each other is political. Bitcoin Cash supporters even go so far as to say that BCH is the "real Bitcoin" and the crypto currency that most closely matches Satoshi Nakamoto's white paper(Satoshi was the inventor of Bitcoin).
They also 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 eliminate in the first place. Some BCH supporters believe that Bitcoin developers have deliberately clogged the Bitcoin chain to monetize off-chain solutions such as the Lightning Network.
Bitcoin supporters accuse Bitcoin Cash of having stolen the Bitcoin brand name, centralized it and implemented a less secure network solution. Just as supporters of Bitcoin Cash refuse to call the original crypto currency "Bitcoin" and instead refer to it as "Bitcoin Core," Bitcoin supporters are trying to separate themselves by name. They call Bitcoin Cash BCASH and complain that the Bitcoin Cash website is Bitcoin.com.
The future of Bitcoin Cash
No one knows whether Bitcoin Cash and Bitcoin can coexist in the future or which of these crypto-currencies will prevail. Bitcoin relies on the Lightning Network as a scaling solution. Bitcoin Cash is counting on increasing the block size.
If Bitcoin Cash lives up to its vision of being an alternative to the regular currency, you may be using BCH for everyday transactions. Imagine a world where a single currency is used regardless of where you live.
This could wipe out the foreign exchange transaction overnight and instead of exchanging USD into EUR for your holiday, for example, you would simply bring your Bitcoin Cash Wallet with you. Bitcoin Cash questions the way we handle money and we are very curious about what the future will bring and how money in general will develop.
Bitcoin Cash has a network of developers working on the project. The talent of this team can by no means be called into question, but instead of introducing each and every member, we will focus on Bitcoin Cash's flagship Roger Ver. Roger is a controversial figure, but nevertheless is the most visible supporter of Bitcoin Cash and one of the most influential people in the community.
Born in Silicon Valley, it's perhaps not surprising that Roger was destined to be heavily involved in the technology industry. After launching the successful Memory Dealers company, Ver 2011 began investing in Bitcoin.
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. A smart businessman, Ver began investing in crypto-currency startups such as Bitpay, Kraken, Ripple, and Blockchain.info. His company Memory Dealers was the first to accept Bitcoin as a payment method. Roger also owns the domain Bitcoin.com, 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 users of Bitcoin and invested in crypto-currency startups when no one else took them seriously. He has a huge stake in where the crypto world is today.
Ver's early support and acceptance of Bitcoin led to the nickname 'Bitcoin Jesus'. There is no doubt that his support for the Bitcoin Cash project will be the key to its success.
The ICO of Bitcoin Cash
Bitcoin Cash had no 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. In essence, Bitcoin owners received a very valuable crypto currency completely free of charge.
Should I invest in BCH?
It is entirely up to you whether you invest in Bitcoin Cash or not. However, we would be happy to give you our thoughts on the project:
- Bitcoin Cash strives to become the best form of digital cash.
- The transaction times are faster than with Bitcoin.
- Transaction fees are lower than with Bitcoin.
- Bitcoin Cash focuses on merchant acceptance.
- Currently Bitcoin Cash is highly centralized. This carries the risk that key players may not act in the best interests of the BCH community.
- The majority of the crypto currency community supports Bitcoin over Bitcoin Cash as the "real" Bitcoin. Over time, however, this support may 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 to use Coinbase. Here you can buy BCH with regular currencies like USD, EUR or GBP.
The Bitcoin-News.one team is very interested to see if Bitcoin Cash can increase the acceptance of crypto currencies. If Bitcoin Cash becomes the peer-to-peer digital currency it is trying to be, there is no doubt that it will be exceptionally valuable.
Both Bitcoin and Bitcoin Cash are similar crypto currencies. 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 whether the Bitcoin Cash scaling solution is the right one.