What is Bitcoin Cash (BCH) ? A Beginners’ Definition

What is Bitcoin Cash (BCH) ? A Beginners’ Definition

  • 9 October 2020
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What is Bitcoin Cash is a popular question after releasing this coin. Bitcoin Cash that is known as Bcash, was created in August 2017 to solve Bitcoin problems. This digital currency acts as a payment network, and the BCH token is its transaction unit.
Bitcoin Cash is a peer-to-peer digital currency for the Internet that does not require any central bank or trusted third parties to operate and is completely decentralized. The blockchain of Bcash is large enough. So it can handle many more transactions, and this feature keeps its costs as low as possible even when used a lot.

what is bitcoin cash

What is BCH

Bitcoin Cash history

BCH is a fork of Bitcoin. The difference of opinion among BTC developers led to the creation of BCH. According to the BCH community, this disagreement arose over methods of increasing transaction speeds and reducing fees.
In August 2017, the BCH team released their ideas about “what is Bitcoin Cash” as a proposal for introducing this cryptocurrency. They proposed to increase the scale of blocks to between 8 MB and 32 MB, therefore providing processing of more business deals per block. This cryptocurrency uses the SHA-256 algorithm. This cryptocurrency is a fork of Bitcoin, and in November 2018 again Bcash forked into Bitcoin ABC and Bitcoin SV (Satoshi Vision).

What are the similarities and differences between Bitcoin and Bitcoin Cash?

In response to “What is Bitcoin Cash similarity to Bitcoin”, it should be said that both of them have several similarities in technical issues. As following:

  • They use a general agreement among nodes as a “consensus agreement.”
  • Their supply is limited to 21 million coins.
  • They are peer-to-peer cryptocurrencies that can be sent directly to anyone anywhere in the world and without intermediaries.

As explained in what is BCH, there are some main differences between the two currencies, as following:

  • The most significant dissimilarity between them is that BTC and BCH are fundamentally different in their philosophical goals.
  • As mentioned in “What is Bitcoin Cash”, BTC has a much higher value than BCH, so more people use it more than Bcash.
  • Bitcoin Cash has a larger block size, which commonly leads to faster transactions and low transfer costs.
  • It has a block size of 32 MB, while the Bitcoin block size is 1 MB.
  • The median number of transactions per block on Bitcoin is between 1,000 and 1,500, but this number for Bcash through a stress test in Sep 2018 which was about 25,000 per block.

what is bitcoin cash

BCH market cap

Which features of BCH are better than Bitcoin?

BCH has technical differences that make it cheaper to use than Bitcoin. In particular, as explained in “What is Bitcoin Cash”, BCH has a block size of 32 times that the bitcoin block size. It means that the BCH blockchain can handle many more transactions, and this feature keeps costs low even when used a lot.
In contrast, the bitcoin blockchain fills up during high activity. That’s why transactions have to wait in line, which slows down transfer time and raises costs. In short, as mentioned in “What is Bitcoin Cash”, BCH digital currency is much faster and cheaper than BTC.

What makes Bitcoin better than Bitcoin Cash?

The main technical problem with larger blocks is that they are harder for miners to grasp. As explained in “What is Bitcoin Cash”, it can lead to problems such as incorrectly splitting the blockchain into multiple branches. Of course, it is an advantage for miners who can receive and send them. As a result, the risk of blockchain concentrating on this group of miners increases.
Fortunately, it is more theoretically true of this digital currency, as the size of 32 MB is not large enough to cause this kind of problem. Bitcoin Cash has not yet fully utilized its block size.
As mentioned in “What is Bitcoin Cash”, the main reason that bitcoin is better than bitcoin cash is that bitcoin has much more value. So people tend to use it more. In cryptocurrencies, the value of a coin is functionally very important.

Bitcoin and BCH

What is Bitcoin Cash utilization?

In reply to “what is Bitcoin Cash utilizing”, it can be used in several cases:

  1. Send and receive funds;

An important feature of Bitcoin Cash is that you can receive it directly from one person or send it to another person (at a very low transaction cost). You do not need a trusted third party such as a bank or intermediary to transfer it. It is important when you are planning to send money anywhere in the world despite all the restrictions.

  1. Payment Method;
    As explained in “What is Bitcoin Cash”, just like Bitcoin, you can use this cryptocurrency as a payment method. Whereas Bitcoin Cash is a relatively new currency compared to BTC, it has received little acceptance, and its use as a payment method has not yet become common.
  2. Investment;
    Finally, an investment opportunity comes along with this cryptocurrency. The price of this cryptocurrency, like many other digital currencies, rises and falls regularly. So short-term investors can take advantage of this opportunity to make money. Always remember, invest only as much as you can afford to lose.

Bitcoin Cash mining

The answer to the “what is Bitcoin Cash mining” question is that Bcash uses the Proof of Work (PoW) consensus method to mine new coins, as BTC does. In this method, the devices that want to gain new BCH as a bonus should check and approve the transactions. They have done these transactions as their efforts for mining on the network via the Internet. PoW mining is using much electrical power for solving mathematics functions.
As mentioned in “What is Bitcoin Cash mining”, mining is the act of producing a new coin because it is like extracting gold by digging in the ground. Of course, in this activity, the miners approve the deals and get coins. BCH also uses the difficulty algorithm, named Emergency Difficulty Adjustment (EDA) that regulates the severity of every 2016 block every two weeks. All of these operations also use the services of the Miner-land cryptocurrency mining platform.

What to consider before buying Bitcoin Cash?

As explained in “What is Bitcoin Cash”, Bitcoin Cash performs much better than Bitcoin, and its larger block size has not caused any problems so far. But is that enough? When examining this cryptocurrency, pay attention to the following points:

  • As a store of value;
    As mentioned in “What is Bitcoin Cash”, by looking at the cryptocurrency market, you can see that Bitcoin has a priority over this cryptocurrency. Despite the functional advantages of this cryptocurrency, this currency has fewer users than Bitcoin. If we look at these two currencies from a value storage perspective, bitcoin seems to have an advantage.
  • As a digital currency;
    The capabilities of payment-oriented cryptocurrencies such as this digital currency are limited due to their fluctuations. On the other hand, stable coins have fewer problems because of their backing. So they are usually an alternative to such cryptocurrencies. But on the other hand, the fluctuations of this digital currency are considered an advantage for those who want a currency that is independent of the value of Fiat currencies.
  • In terms of support;
    This cryptocurrency has a relatively small development team, which has limited the speed and scope of development of this program on the blockchain.

what is bitcoin cash

Buying BCH

Bitcoin cash’s history price?

As mentioned in “What is Bitcoin Cash”, its abbreviation is BCH and it is a form of a digital asset. BCH as a cryptocurrency has a market value of about $ 9.39 billion, ranking 8th and accounting for 0.89% of the total market.
Each unit of BCH will be traded on January 14, 2021, for $ 504.81. Its daily trading volume is $ 5.77 billion. The price has increased by 5.77% in the last 24 hours.
The highest price of Bitcoin Cash on December 20, 2017, was equal to $ 3,923.07, which is now 87.13% lower than those days. Bitcoin Cash price changes in the last two years are 282.25%.
The number of BCH units in circulation will be 18.6 million and the total number of units will be 21 million. Currently, on January 14, 2021, the most active exchange in which BCH is traded is ZG.com with 4.98% of the daily trading volume.

BCH chart

What is the Bitcoin Cash wallet?

As explained in “What is Bitcoin Cash”, both BCH and BTC are based on a public blockchain network. Almost all major cryptocurrency wallets support Bitcoin deposits. So it is possible to save the asset in the same wallets. The following wallets are at a high level of security and ease of use.

  • Exodus wallet is a hot wallet and software for storing Bitcoin, BCH, and other cryptocurrencies.
  • Coinbase is the best software wallet for this digital currency.
  • Coinomi is a wallet for the hot storage of cryptocurrencies. Android mobile and desktop versions including Windows, Linux, and MacQuinomi are now available.
  • KeepKey is a hardware wallet at a reasonable price.
  • Ledger wallets in the kind of Ledger Nano S, or Ledger Nano X, are the best hardware wallets for their reliability and security.
  • Trezor Wallet is a hardware wallet. It is not necessary to connect Trezor to the Internet. So hackers can’t hack it virtually.

What are the benefits of BCH?

As explained in “What is Bitcoin Cash”, it has good specifications as following:

  • Accepted in popular crypto exchanges ;
    This digital currency is accepted in almost all top cryptocurrency exchanges, and this shows the ease of use and ease of buying and selling this coin.
  • Lower cost;
    This cryptocurrency has a low transaction fee. It is about $ 0.20 per transaction.
  • Bitcoin Cash efficiency;
    As mentioned in “What is Bitcoin Cash”, the maximum bitcoin block size is 1 MB, and this cryptocurrency is 8 MB. Naturally, having a larger block allows transactions to be verified and processed more quickly.
  • Shorter transfer time;
    It performs transactions faster compared to BTC. Like Bitcoin, you no longer have to wait 10 minutes to confirm a transaction. As a result, this cryptocurrency can manage more transactions per second.

The benefits of BCH

What are the disadvantages of Bitcoin Cash?

As mentioned in “What is Bitcoin Cash”, it has some disadvantages as following:

  • BCH is very centralized, and the number of pools is currently limited. The future of this currency depends on these few pools.
  • Because of its name, this coin has not yet been able to differentiate itself from Bitcoin. It has eroded investors’ confidence in the cryptocurrency.
  • Investors still do not consider this currency as a long-term asset. They use it more as a short-term tool. For this reason, this cryptocurrency currently has an uncertain future.
  • As mentioned in “What is Bitcoin Cash”, this currency has a lower acceptance rate and audience than Bitcoin, and it has led to fewer trading pairs of Bitcoins during transactions.

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