What is Bitcoin Cash?
Bitcoin Cash is a hard fork of the Bitcoin network. Tired of the scalability issues and SegWit implementation, a part of the BTC’s community decided to fork out in another direction creating another chain in the blocks and a new altcoin – BCH. It is a peer-to-peer electronic cash system with an increased block size of 32MB and a block time of 10 minutes. Unlike Bitcoin, BCH adjusts its difficulty every 600seconds or every block instead of once every 2016 blocks. The supply limit is 21 million BCH and currently, a decision has not been made regarding any subunits. Bitcoin Cash stands out mostly with its implementation of smart contracts.
Advantages
The scalability issues that Bitcoin was facing were one of the crucial hindrances for the network. Bitcoin Cash’s main aim was to rectify that through an increase of the block size. Currently, it is 32MB which allows for up to roughly 200 transactions per second depending on the traffic and amount of funds being transferred. Here are some of the other benefits:
- Customizable and cheap transactions
- Emergency Difficulty Adjustment (EDA)
- Secure and immutable blockchain
Disadvantages
One of the main disadvantages that this coin has experienced is being underrated. Because it’s a fork of the Bitcoin network and shares many aspects with it, users regarded it as a fake coin or a copycat. This is quite far away from the truth as this is a real coin that offers advantages that BTC cannot. I have listed a few of the other notable disadvantages below:
- Has centralized development (BitcoinABC)
- Blockchain size is on the big side (164GB+)
History and Evolution
On the 1st August 2017, the Bitcoin protocol underwent a hard fork splitting the blockchain in two, thus creating Bitcoin Cash. Since the fork was caused by the community, there is no real creator of the new altcoin. One of the well-known figures in the BCH network is Amaury Séchet, who is the founder of Bitcoin ABC. He developed the software necessary to run a full node in the BCH network to keep it functioning. Currently, BCH is one of the best Bitcoin forks on the market. Another fork is expected in November 2018 in which the groundwork for smart contracts will be implemented as well as an increase of the block size to 128MB.
Bitcoin Cash Blockchain
As mentioned before, Bitcoin Cash is a fork of Bitcoin, hence their blockchains are similar in function and architecture. BCH relies on the blockchain open ledger technology to achieve fast transactions, security, immutability, and anonymity. The block size is currently 32MB and new blocks can be found roughly every 10 minutes. Miners still need to use the Proof of Work consensus method and hardware that’s compatible with the SHA-256 hashing algorithm. Currently, the reward for a mined block is 12.5BCH with a 10-minute time between blocks. Rewards get halved every 220 000 blocks while the difficulty adjustment happens after each one, aiming for an average of 144 blocks per day. Bitcoin Cash’s network has a unique feature that no other has – Difficulty Adjustment Algorithm or DAA. It regularly monitors the network and the block count in the last 24 hours, reacting accordingly.
BCH Nodes
Nodes are the backbone of the network. Depending on their function they will need to download a part of the full blockchain history. All users that connect and operate in the blockchain can be considered as a node. There are two types:
- Light Nodes – to be operational, they need just a partial download of the transaction history. They serve no validating functions
- Full Nodes – the most vital ones for the network. To run a full node, you will need to download the whole blockchain transaction history which is currently over 164GB. Also known as Full Validation Nodes, they are the ones that have a final say on the validity of blocks from miners
Forks or Tokens Based on BCH
As mentioned earlier, Bitcoin Cash is a hard fork of the Bitcoin network. It separated on the 1st of August 2017 after the discovery of the 478 558th block. A part of the nodes in the network decided that they would disagree with the rest and caused a split in the blockchain. The reasons why include the rejection of the BIP-91 protocol (also known as SegWitx2) and the plans to increase block size from 1MB to 8MB and later to 32MB. This is how they wanted to resolve the scalability of the network.
Currently, there are no forks or tokens based on the Bitcoin Cash blockchain.
How to Get Bitcoin Cash
I hopefully piqued your interest and you’re eager to learn how to obtain this coin. You can either mine it with hardware that is specialized for the task or buy BCH from exchanges.
Where to Buy BCH
BCH is a very popular coin nowadays and because of that, it is offered on most exchanges that have the option to trade with fiat currency.
| Exchange | Cryptocurrencies | Fiat Money | |
|---|---|---|---|
|
Bitfinex
|
Bitcoin Cash, Bitcoin, Ripple + 50 more | USD, EUR, GBP | Trade now |
|
Coinbase Pro
|
Bitcoin Cash, Ethereum, 0x + 2 more | USD, EUR, GBP | Trade now |
|
Kraken
|
Bitcoin Cash, Zcash, Monero + 13 more | USD, EUR, GBP, JPY | Trade now |
Mining Bitcoin Cash
Mining BCH can be done most efficiently with an Application Specific Integrated Circuit devices (ASIC). These machines have a specially designed architecture of their microchips to mine crypto using a specific hashing function. Тhe best ASIC for mining coins that use the SHA-256 algorithm, like Bitcoin Cash, is the Antminer S9i. Below you’ll find a list of my top recommendations. If you’re interested in learning how to mine Bitcoin Cash, you can find a detailed step-by-step guide.
| Мining Hardware | Hash Rate | Power | Price | |
|---|---|---|---|---|
| Whatsminer M10 ASIC | 33.0 TH/s | 2145W | $ 1,580 | buy now |
| Antminer S9i ASIC | 14.5 TH/s | 1320W | $ 612 | buy now |
| Antminer T9+ ASIC | 10.5 TH/s | 1400W | $ 498 | buy now |
Wallets for Bitcoin Cash
To be able to do anything in a blockchain network, you will need a wallet. What it does is hold your public and private keys that are used to access your funds in the crypto world. The official BCH wallet is BitcoinABC, which acts as a full validation node as well. You can get the latest version at their website.
It supports Windows, Linux, and OSx. For a guide on how to set it up, you can watch this video – https://www.youtube.com/watch?v=KGZIjO1PDFQ
Alternative Wallets
Desktop Wallets
Online Wallets
Mobile Wallets
Hardware Wallets
Bitcoin Cash Security
The main security issue that the BCH network had in the past was the SIGHASH bug. With that bug, the consensus regarding signatures in transactions was loosened and previously invalid transactions could be made valid, thus hard forking the chain. As you can tell, this could’ve caused a lot of trouble for the network, but fortunately, it never passed on to the live version and it was reported swiftly. Despite this bug, BCH is just as secure as its origin chain, Bitcoin.
Future of the BCH Cryptocurrency
The roadmap for Bitcoin Cash is bright and promising. Its developer BitcoinABC is planning to continue improving scalability with an aim to have block sizes of 1TB in the future. Adding smart contracts in 2019 and tokenization of assets to be traded on the chain is really showing their commitment towards creating the best monetary system in the world.
News and Useful Links
To keep track of all developments and news surrounding Bitcoin Cash, I’ve compiled a list of useful sources for your convenience.