The short answer to the question “What is BitcoinCash?” is: BCH is a cryptocurrency that forked off Bitcoin.
Specifically, Bitcoin Cash started in August 2017 at Block 478558. Nevertheless, Bitcoin Cash is one of the top cryptocurrencies traded worldwide. Also, it follows the Satoshi Nakamoto roadmap and is adopted globally.
BCH’s Proof-of-Work (PoW) and its Difficulty Adjustment Algorithm (DAA) allowed miners to migrate from the Bitcoin blockchain. Additionally, BCH has increased the block size limit to around 8MB.
History of Bitcoin Cash
In 2010, the average block size on Bitcoin’s blockchain was less than 100KB. More so, the average transaction fee is a couple of cents. This made the blockchain vulnerable to attacks. However, to prevent the situation, Bitcoin has limited its blockchain size to 1MB.
In 2015, the average block size increased to 600K. In turn, the number of Bitcoin transactions surged, leading to a buildup of unconfirmed transactions. The average transaction time to confirm a transaction also increased.
Nevertheless, developers proposed two solutions to solve the problem. The first solution was to increase the average block size. On the other hand, some suggested excluding certain parts of a transaction to place more data on the blockchain.
However, the Bitcoin Core team blocked the proposal to increase the block size. Meanwhile, a new coin started with a flexible block size. The said new coin was called Bitcoin Unlimited. However, the new coin struggled to gain traction, partially because it got hacked. In addition, people began to doubt the viability of the currency for daily transactions.
In August 2017, Bitcoin Cash launched. Interestingly, all the Bitcoin holders received an equivalent amount of BCH. This allowed them to double the number of coins in existence. Moreover, BCH started on crypto exchanges at an impressive price of $900 each.
However, crypto exchanges such as Coinbase and itBit boycotted Bitcoin Cash. Nevertheless, BCH received vital support from Bitmain, the world’s biggest crypto mining platform. In fact, Bitmain ensured a supply of coins for trading at crypto exchanges when Bitcoin Cash launched.
BCH and BSV
In December 2017, the Bitcoin Cash price skyrocketed to $4,091. Surprisingly, Bitcoin Cash also underwent a fork later after a year. This is due to a similar reason why it split from Bitcoin.
In November 2018, Bitcoin Cash divided into Bitcoin Cash ABC and Bitcoin Satoshi Vision (SV).
Particularly, Bitcoin Cash ABC utilizes the original Bitcoin Cash client. However, it has incorporated various changes to its blockchain such as Canonical Transaction Ordering Route (CTOR). This rearranges transactions to a specific order in a block.
On the other hand, Bitcoin Cash SV is led by Craig Wright. He rejected the use of smart contracts that were used for payment transactions. The drama prior to the latest hard fork was the same as the one before forking Bitcoin Cash from Bitcoin in 2017.
Further Disagreement in 2020
As if those were not enough, Bitcoin Cash again made a fork — this time in 2020. This started when Bitcoin Cash ABC suggested allocating 8% of all BCH mined for the developers. However, many members of the Bitcoin Cash community did not agree with the proposal. Thus, they created another group called Bitcoin Cash Node (BCHN).
During the hard fork on November 15, 2020, BCHN dominated the network, while Bitcoin Cash ABC lost support. As a result, the community dropped the suggestion to fund the developers with the said percentage of newly-mined BCH.
Difference Between Bitcoin and Bitcoin Cash
Bitcoin Cash began from bitcoin miners and developers after a hard fork in the Bitcoin blockchain. Bitcoin is constrained by transaction processing time, an issue that has caused rifts between factions within the bitcoin mining and developing communities.
On the other hand, Bitcoin Cash processes transactions faster than the Bitcoin network. This means that the waiting times are shorter and processing fees are lower. In addition, the Bitcoin Cash network can handle more transactions per second than the Bitcoin network.
Moreover, the maximum block size of Bitcoin is 1MB while Bitcoin Cash has 8MB. Also, some potential issues with the larger block size with BCH are that security could be compromised in comparison to the Bitcoin network.
In reality, Bitcoin allows 250,000 daily transactions, whereas Bitcoin Cash processes two million transactions. Furthermore, Bitcoin has an average block processing time of ten minutes.
How to Buy Bitcoin Cash?
Specifically, direct purchasers can buy their BCH directly from individuals (in person) or through the web. Aside from this, interested BCH buyers can also check for the nearest crypto ATM. However, ATM rates can be outrageous. Additionally, there is also no guarantee that you can find a counterpart to make the purchase with.
More so, the simplest way to purchase Bitcoin Cash is through a cryptocurrency exchange where users can trade cryptos like Bitcoin and Ethereum. Furthermore, users can use their local currency to buy BCH.
In addition, there are various things to consider selecting an exchange, including fee structure, volume, reputation, and security. However, the exchange is a steady target for most hackers. Thus, users need to be sure to read the security measures.
Moreover, users need to follow a few steps before buying BCH through crypto exchanges.
Firstly, users need to create an account with their username and password. Secondly, the user account needs to be verified. Even more, users need to provide their personal data to get verified.
How to Mine Bitcoin Cash?
Bitcoin Cash is peer-to-peer electronic cash. Besides, it helps users to confirm transactions without any third party. Moreover, Bitcoin Cash mining is the process of solving complex cryptographic problems and placing a new block on the chain.
Here are few mining methods that are used to mine Bitcoin Cash.
Choose a Mining Hardware
Specialized mining hardware is required for great mining. In addition, there are plenty of mining hardware available in the market. Users need a mining rig made up of multiple GPUs in order to mine Bitcoin Cash.
Even more, miners can also calculate the mining profitability by putting the necessary information like mining hardware and the cost of electricity in the mining calculator. Accordingly, the user will get to know the Bitcoin Cash mining returns.
Install the Software
Mining software is one of the most important things that is required for Bitcoin Cash mining. The developers associated with Windows 8.1 and Windows 10 can install CGMiner, BTCMiner, EasyMiner, and BFGMiner.
For Linux users, CGMiner is the most famous Bitcoin Cash mining software based on CPU miner. For Mac OS X, RPC Miner is the one utilized. Once the user installs a mining software, they have to pay off expenses like electricity.
Install and Link a Wallet
Users also need to have a crypto wallet to mine Bitcoin Cash. Fortunately, there are plenty of wallets that support Bitcoin Cash. For example, Electrum, one of the best crypto wallets, can be used on Linux, Windows, and Mac.
Meanwhile, iOS users can also access Bread Wallet. For Android users, Mycelium is a viable option. Meanwhile, Ledger Nano S is a well-rounded option for all devices.
Join a Cloud Mining Pool
The most desirable mining method is joining a cloud mining pool. In detail, users must find a reliable cryptocurrency cloud mining partner, sign up on their website, choose a mining plan, and make the payment. Once paid, the user will be assigned a hash rate.
Advantages of Bitcoin Cash
Bitcoin Cash eliminates the necessity of central banks. In addition, it takes monetary supply out of the hands of authorities. Moreover, BCH is also immune to political attacks. This is a major advantage of investing in BCH.
BCH team is quick to implement changes and make it more scalable. This shows many users can execute transactions and payments at the same time. High scalability leads Bitcoin Cash’s future potential adoption on higher grounds.
With larger blocks than Bitcoin, BCH can record more transactions in each block. Also, it makes faster payments possible. With the current network load, the queue of unconfirmed transactions is relatively low and usually will not exceed 200-250 transactions.
Low transaction costs
With the increase of the overall scalability of BCH, validation timing and transaction fees decrease. For that reason, users can send any sum of money without worrying about the transaction cost. Moreover, miners might enjoy more benefits.
Easy to acquire
Bitcoin Cash is easy to acquire due to BCH’s listing on top exchanges. Furthermore, driving mass adoption enhances its investment potential in the crypto space.
Disadvantages of Bitcoin Cash
Despite Bitcoin Cash’s popularity and potential, BCH provides relatively low adoption. Compared to Bitcoin, Bitcoin Cash doesn’t have many investors and shows lower market penetration. Despite Roger Ver trying to promote the Bitcoin Cash actively, mass adoption is still low. With this in mind, adoption rates are crucial to drive the growth of any crypto.
One of the major disadvantages of investing in Bitcoin Cash is its branding issues. This can provide a negative impact on investor trust. Bitcoin Cash is struggling to distinguish itself from Bitcoin and also had several forks including Bitcoin SV.
Bitcoin Cash mining is less profitable
The network’s computing complexity is a huge disadvantage as it impacts the extraction speed of data. Moreover, Bitcoin Cash mining is similar to Bitcoin mining. Further, Bitcoin Cash miners get less profit. On a lighter note, users don’t have to be an IT specialist or a miner to invest in Bitcoin Cash.
Lower liquidity than Bitcoin
Taking into consideration the on-chain transaction volume and volatility, it’s clear that Bitcoin Cash transactions are lesser than Bitcoin transactions. This indicates that BCH has lower liquidity compared to BTC, with BCH pairs being traded less than BTC pairs.