Bitcoin cryptocurrency launched in 2009 and set its block size at 1MB to safeguard against spam attacks. However, scalability became a concern of the Bitcoin community that felt the size would slow down transactions. By 2017, a group of miners disagreed with the introduction of a new protocol to improve scaling. The resulting fork led to the formation of Bitcoin Cash.
So, what’s Bitcoin Cash?
Bitcoin Cash cryptocurrency is a platform that provides internet blockchain transactions. Bitcoin cash cryptocurrency operates on the Bitcoin blockchain. Bitcoin cash has three ticker symbols that depend on the wallet service. It can be BCH, BCC or XBC. Bitcoin cash is a recent split of the main BTC blockchain. Bitcoin cash (BCH) started after a hard fork of the original Bitcoin (called Bitcoin Classic) in August 2017.
What is the goal of Bitcoin cash and how does it work?
Bitcoin cash has the objective of becoming a valuable cryptocurrency in the future. Some of its aims are:
- Considerably increase the number of transactions processed on the BCH network.
- Compete with traditional fiat based transaction like at Visa or PayPal.
- Solve scalability issues to have more power to secure numerous transactions.
BCH, therefore, works by increasing the size of blocks to allow more transactions to take place at a much faster rate.
What is the technology behind it?
Bitcoin cash uses the SigHash technology to verify transactions. It differs from the SigWit used by BTC.
Pros of the technology
These are the pros of the Bitcoin Cash network. Most of them are from Bitcoin Classic.
- Fast: bitcoin cash transactions are secured and completed within minutes
- Reliability: the BCH network has been improved to work without experiencing congestion. It is also scalable so that future demands on the network will be easier to handle.
- Low transactional fees: The BCH allows you to send money worldwide at very low charges.
- Stability: Bitcoin cash is already operating on a stable network.
- Simple and friendly to all users: even complete beginners can use bitcoin cash.
- Secure network: Bitcoin cash operates on the classic bitcoin blockchain which is highly regarded as very secure.
Cons of the technology
- The BCH approach threatens Bitcoins stability- if more power ends up with a few powerful users, then they could force Bitcoin changes in future.
- Increasing power demands for mining will disadvantage smaller miners- this will make only those with larger equipment and vast resources like mega- companies benefit from the Bitcoin cash crypto.
What is the difference between bitcoin and bitcoin cash?
There are a few features that make Bitcoin cash different from bitcoin. These features are:
- Bitcoin cash has made every block size be a default 8MB. This is different from Bitcoin whose size is 1MB.
- The bitcoin cash cryptocurrency block size is adjustable while that of bitcoin is not.
- BCH developers are concerned about how to make future transaction even bigger whereas Bitcoin enthusiasts are concerned about how this will affect network stability.
Emergency difficult adjustment (EDA)
- Bitcoin Cash wants to allow miners to migrate as opposed to bitcoin.
- Bitcoin Cash sees the possibility of migrations as long as they are protected against hash rate fluctuations.
- Bitcoin (Classic) does not have such a provision on its blockchain.
New transaction signatures
- The bitcoin cash cryptocurrency signs all transactions with their new SigHash protocol and not SigWit as is with Bitcoin.
- There is a provision for replay protection which is not on Bitcoin
- Unlike with the classic network, BCH uses the sighash to eliminate quadratic problems associated with hashing.
Decentralized blockchain development
- Bitcoin cash seeks to have in place several teams of independent developers who would provide network software adjustments.
- No single group of people would have the power to do that as is the case with bitcoin.
- Bitcoin cash cryptocurrency wants to ensure the network can securely resist political and social interference.
Bitcoin cash market
- Bitcoin cash came about on the 1st of August, 2017 after Bitcoin experienced a hard fork.
- Bitcoin cash ranks as the 4th most valuable coin according to market capitalization. Only bitcoin, Ethereum, and Ripple are bigger.
- One factor that contributes to its soaring value is the fast transaction time the bitcoin cash network takes to secure and verify blocks.
- By increasing the size of each block to 8MB, BCH makes transactions be completed in just 2.5 minutes which is faster and cheaper.
- The bitcoin cash cryptocurrency market capitalization at the time of this article stands at $9,469,007,794.
- Like the Bitcoin classic, BCH will have a maximum supply of 21,000,000 BCH.
Bitcoin Cash provides much-needed relief to users with an immediate increase of the block size limit to 8MB.
- On January 11, 2018, the price of bitcoin cash was 2460.99 USD
- Bitcoin cash has traded for about 153 days since it splintered from Bitcoin.
What has led to the rise in the value of bitcoin cash?
- Bitcoin Cash has gained credibility after several exchange websites agreed to list it on their trading or buying/selling websites.
- A large number of miners have joined bitcoin cash mining due to the reward system and ease of verifying transactions.
- The expanded block size of 8MB has attracted more investors who help to push its price higher.
What can we say about the future of Bitcoin Cash cryptocurrency?
It is not easy to say with confidence what the future will be like for Bitcoin cash. The current projections about price movements and volatility suggest bitcoin cash will continue to gain in value alongside BTC. One very attractive aspect of BCH that could help its future prospects is the 8MB block. If transactions become faster and cheaper, many investors could opt for it.
Can bitcoin cash be mined?
If you are asking whether Bitcoin cash can be mined, then the simple answer would be yes. Like most other cryptocurrencies, Bitcoin cash can also be mined.
To mine bitcoin cash, you can join a mining pool or do it alone. Here is a brief explanation of what happens:
- Miners use computers to secure and complete a block of transaction
- The network uses the ‘proof-of-work’ consensus to add the new block to the blockchain.
- Miner(s) who discover the transaction and verify it get rewarded 12.5 bitcoins.
- The miners charge a fee if they are responsible for the transaction.
Bitcoin cash mining pool
What is a mining pool?
A mining pool consists of a group of miners who ‘pool’ resources in-order for them to mine a cryptocurrency. When the mining difficulty increases, the computational power a node requires to mine a block also increases. The process then may become too expensive for solo mining leading to the formation of mining pools.
How does a Bitcoin Cash mining pool work?
- When mining, computers or nodes locate and secure pending Bitcoin cash transactions.
- The process takes place after every 2.5 minutes.
- The transactions which are in the form of complex cryptographic puzzles should be solved by the nodes (in this case the pool).
- The pool solves the algorithmic problem and gets the reward of 12.5 BCH.
- Miners in the pool share the reward according to their pay per share agreement.
What to consider before joining a bitcoin cash mining pool
To get value out of a given mining pool, consider these factors:
- Profitability – how profitable is the pool? Knowing this will help you determine if it is worthwhile.
- The hash rate- look for a pool with a higher hash rate because this increases your chances of securing and verifying a transaction/block.
- Location of mining servers– it helps to know this so as to avoid getting into mining in countries that have banned it or will do it.
- Fees – consider how much the pool charges new miners to join and how much you can make in profits.
- Reputation – consider whether the mining pool rates well or it has scammers within it.
Bitcoin cash wallet
A bitcoin wallet is a software that allows storing the BCH after you mine or purchase them, as well as send or receive the bitcoin cash.
What should you check before using a BCH wallet?
Before you choose a given wallet, consider the parameters below:
- Safety- how secure is the wallet to store your BCH. Find if there are features like encryption.
- Rating- how well does the wallet rate in the market from user reviews.
- Reliability- a reliable Bitcoin cash wallet is one that offers you all the features you want.
- Fees (this is also called gas) – how much are you charged store and transact on the wallet?
- Ease of use- a wallet that has an easy UI is better than a complicated one.
Which wallets support Bitcoin Cash?
This is a very popular hardware wallet, designed to give maximum security to the storage of bitcoins. It is designed like a flash drive, allowing you to connect to your PC.
- Durable- has a strong metallic case.
- One of the safest option today.
- Offline, thus extremely safe and un-hackable.
- Can store most of the leading cryptocurrencies.
- Easy to carry around.
- It is excellent for new users of bitcoin cash because it is easy to use.
- It is expensive.
- You cannot sell/buy unless you activate the device.
KeepKey is an advanced cold storage wallet that is very simple to set up. It’s a hardware wallet. It is widely regarded as being a premium wallet because of the advanced security it offers.
- It is the most secure cold storage wallet currently available.
- It comes with some advanced features like digital screen & metal body
- It is the most expensive amongst the hardware wallets.
Jaxx is a leading multi-asset HD wallet that is easy to use and is very reliable. It has a seed backup key that helps you restore crypto assets if you accidentally damage or lose it.
- Has backup key.
- No verifications before use.
- It allows you to use private keys registered elsewhere.
- You can import bitcoin cash from paper wallets to your Jaxx wallet.
- Risk of hacking.
- Negative reviews.
Freewallet’s BCH wallet
This mobile wallet allows you to buy and send bitcoin cash. It is sync-ready, meaning you can use it at short notice. The display is easy to use and generally, the wallet is good for beginners.
Pros: Fast transactions, Freeze option if you lose the device, Easy to use, Supports a range of cryptocurrencies.
Cons: No backup option, Not safe.
BTC.com bitcoin cash wallet
This is a popular wallet for web and mobile use. It is a reliable tool for storing your Bitcoin cash. The BTC.com wallet has all the hallmarks of a secure wallet that is compatible with several OS.
Pros: Easy access to BCH, Supports web and mobile, Reliable.
Cons: vulnerable to hacking.
In a Nutshell
Bitcoin Cash has been gaining in value since the fork that led to its split from Bitcoin classic. It is the first in terms of successful forking and it is interesting to watch how this will progress in the future.
The key question is whether BCH can really go on to overtake Bitcoin. Meanwhile, we will keep you updated with reviews and guides on how each performs in the market.
Thank you for checking out this article, and hope to see you again on our website.