Did you know that Bitcoin Cash and Bitcoin have some very distinct and differing features? If you didn’t, keep reading our FAQs to learn more about Bitcoin Cash and how it sets itself apart from Bitcoin and other cryptocurrencies in the market.
What is Bitcoin Cash?
In addition to having a similar name, Bitcoin Cash (BCH) shares more similarities with Bitcoin than any other altcoin (alternative coin) on the market today. Created on August 1st, 2017, Bitcoin Cash is a fork of the Bitcoin source code; the two currencies have some parallels but have run on separate blockchains since they split.
An argument over Bitcoin’s network scalability and growing platform sparked the split that led to Bitcoin Cash. Following a series of debates, two separate initiatives were born by two opposite sides of the community.
Like Bitcoin, Bitcoin Cash intends to become decentralized, peer-to-peer electronic money, as stated in its white paper. Bitcoin Cash proponents argue that it has the right to use the term “Bitcoin” because it continues from the original project.
But, does it?
Why Caused the Split Between Bitcoin and Bitcoin Cash?
Since its debut in 2009, the number of Bitcoin transactions has been steadily increasing. Despite this, the Bitcoin network has been dealing with congestion and processing difficulties over the past few years. As a result, a transaction may take hours to process during transaction periods, or you may be required to pay a significant rush fee to speed it up.
Root Cause: Why the holdups?
Blocks on the Bitcoin blockchain are limited to 1 MB in size by design. There are, on average, ten blocks mined every 10 minutes, which means there is a transaction capacity of 7 transactions per second, which isn’t enough to keep up with demand.
As an alternative, proponents of Bitcoin Cash advocate a gradual increase in the block size limit since they believe SegWit’s transaction capacity is inadequate. In their opinion, not all users should be required to maintain a full node, a job that should be left to the likes of miners and huge traders.
What are the Differences Between Bitcoin and Bitcoin Cash?
A 32 MB limit on the size of a block
August 2017 saw an increase in the block size limit from 1 MB to 8 MB, followed by a rise to 32 MB in May 2018. The Bitcoin Cash network can execute between 97 and 236 transactions per second without exceeding this limit to avoid raising fees. For Bitcoin Cash, the average transaction costs less than one cent, while confirmation takes roughly 10 minutes.
No support for Segwit and RBF
The August 2017 hard fork, which occurred before SegWit was activated, implies Bitcoin Cash does not have this update. In addition, the Fee Replacement feature (also known as RBF, or Replace-by-Fee) was introduced in Bitcoin in early 2017. This feature allowed users to boost transaction costs while awaiting confirmation, however, Bitcoin Cash removed it.
Smart contracts now have even more options
Bitcoin Cash has added about fifteen operating codes to its internal scripting language to enhance its smart contract processing capabilities. If you were looking for an attack vector, these old opcodes might have been your best bet. However, they’ve since been safely revived or replaced with new code that’s nearly identical.
A new address format
No longer can BTC be sent directly to a BCH address or vice versa. Addresses for Bitcoin Cash are relatively similar to those for Bitcoin. However, the Bitcoin Cash address should never be used to transmit Bitcoin. Doing so could result in the permanent loss of your digital assets.
Upgrades are made regularly
Every six months, the protocol undergoes a hard fork. The Bitcoin Cash roadmap, which can be found on the official website, lists all of the project’s anticipated upgrades.
How Do The Tokenomics of Bitcoin Cash Work?
On August 1st, 2014, block 478,559 was the location of the Bitcoin Cash hard fork. Implementing Bitcoin Cash resulted in the blockchain being forked into two different chains: one obeying old rules (BTC) and one adopting new practices (BCH) due to the block size limit increase to 8MB.
How Many Bitcoin Cash Tokens are in Circulation?
As a fork of Bitcoin, Bitcoin Cash has similar characteristics, including the maximum amount of tokens that can be in circulation, which is 21 million. The consensus method used is proof of work (PoW) based on the hash function SHA-256. A block is mined every 10 minutes on average.
Which Wallets Support Bitcoin Cash?
If you plan on holding on to your Bitcoin Cash, then you might consider a hardware wallet like Ledger or Trezor. These wallets are physical devices that secure your digital assets like Bitcoin Cash. Hardware wallets are arguably the safest place to store your cryptocurrency – aside from a paper wallet.
If you prefer to have your assets readily available for trading, you can use a desktop or mobile wallet to keep track of your BCH. Popular options for Bitcoin Cash include Exodus and Atomic wallets, which offer both desktop and mobile applications.
You may also hold the Bitcoin Cash you buy on Coinberry, with us. Learn more about our custody here.
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Where Can I Buy Bitcoin Cash?
You can buy Bitcoin Cash on Coinberry by signing up for an account here.
Want to learn more about Bitcoin Cash? You’re in luck! We have additional content here that tells you all about this unique and exciting project.