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What Is Bitcoin Cash?

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Hard Fork

On Jan. 3, 2009, The Bitcoin blockchain was launched and the age of the Peer-to-Peer Electronic Cash System was born. The concept was to create a decentralized, digital currency that has no central power but rather a public ledger of transactions that anyone can store on their computer. The speed at which these transactions take place is around 7 transactions per second (tps) which was much faster than the traditional banking system but not fast enough for some so a vote was taken to incorporate a technology called SegWIt2x that removed signature data from the blocks that needed to be processed. In return, the block size doubled to 2 MB, and transaction speeds got a little better but many felt it still wasn’t enough. On August 1, 2017, a large section of the Bitcoin community decided to change the Bitcoin protocol to solve some scalability issues by increasing the block size and speed of transactions. The block size went from 1 MB to 8 MB and then further increased to 32 MB in May 2018 and transaction speed went from 7 to 61 tps. This event was known as a “hard fork” and an almost identical twin to Bitcoin was created and named Bitcoin Cash (BCH) in August 2017.

Bitcoin Cash

Bitcoin Cash was started by developers and miners who were concerned with the future of the cryptocurrency and its scalability. Besides the increased block size, Bitcoin Cash does not include the SegWit2x protocol as they felt it did not follow the roadmap that was outlined by the creator of Bitcoin, Satoshi Nakamoto. They also felt SegWit2x undermined the decentralization of the currency. Now, Bitcoin Cash is able to process transactions faster than the Bitcoin network with shorter wait times and lower transaction fees. Proponents of Bitcoin Cash believe the increase in block size will enable it to be used as a medium for daily transactions and international credit card processing organizations such as Visa and Mastercard. They believe that the lower transaction fees will save both customers and merchants.
Key differences between Bitcoin and Bitcoin Cash include:

  • Bitcoin Cash has faster transaction times than Bitcoin which takes a minimum of 10 minutes.
  • Bitcoin Cash has lower transaction fees (around $0.20) which can save you more money in the long run.
  • Since transactions per second are faster than Bitcoin, it can handle higher volumes of traffic.

Is Bitcoin Cash A Good Investment?

Besides its many critics who tend to support the original Bitcoin, Bitcoin Cash is growing and is still the most popular of the Bitcoin forks. Bitcoin Cash can be found on most of the more popular exchanges at a far less price per coin than Bitcoin. In 2019, Bitcoin Cash’s price started at $164 and slowly fell during the first few months until it skyrocketed in April to $319. It seemed to have leveled out until it peaked at $485 in June. The price slowly fell until the end of the year. In January of 2020, the price started out at $204 which was 24.12% higher than the start of 2019. By February, Bitcoin Cash’s price more than doubled to $491 until the pandemic crushed the financial markets affecting cryptocurrencies along with it. The price has slowly gained and as of late October, the price is sitting around $260. Showing signs of a possible bullish trend, Bitcoin Cash could be a good opportunity for traders and investors. Just be aware of risk management as you seek this opportunity. In the end, the fate of any investment depends on its adoption and how successfully it can hold up to competition. So far, it looks like Bitcoin Cash is holding its own.

 

 

 

 

 

 

 

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