Updated: Dec 20, 2019
Bitcoin Cash is a cryptocurrency, created as a hard fork (altcoin version) of Bitcoin, in 2017. It increases the blockchain sizes, allowing more transactions to be processed in less time. It quickly achieved the mantle of being the third most successful cryptocurrency, after Bitcoin and Ethereum, upon its conception.
This guide will talk about why Bitcoin Cash was created, the developers behind it, how it works, and what are the various applications.
What is Bitcoin Cash Designed For?
Bitcoin had a 1 MB limitation, which resulted in numerous transaction delays. Bitcoin Cash addressed this issue by increasing the potential size of a block, which in turn helped in enabling a greater number of possible transactions. The scale of the cryptocurrency grew, as a result, allowing it to compete with other traditional cryptocurrency platforms.
In spite of Bitcoin Cash having a higher transaction rate, the cryptocurrency is not accepted or acknowledged by as many vendors and partners as Ethereum and Bitcoin. Further, various disagreements in the developer community, caused Bitcoin Cash to be labeled more of an investment option, rather than currency.
Who Is the Team Behind Bitcoin Cash?
Bitcoin Cash was the result of a hard-fork led by a part of the Bitcoin community, including Roger Ver who felt that the rising fee on the existing Bitcoin network was not justified. Ver is popularly known as the "Bitcoin Jesus" for his prominent support in Bitcoin and related startups, including Ripple, Bloackchain.com, and Z.Cash.
Ver was also the CEO of Bitcoin.com, before being replaced by Stefan Rust. Ver was one of the earliest Bitcoin promoters who wholeheartedly supported the proposed split in 2017, in the form of the altcoin Bitcoin Cash.
How Does Bitcoin Cash Work?
Bitcoin Cash is a very interesting experiment since it is one of the first hard forks of the original Bitcoin. The primary distinguishing factor between a hard and a soft fork is the absence of backward compatibility in a hard fork. Think of it as upgrading to Playstation 4 from Playstation 3, where you cannot play PS3 games on PS4.
Bitcoin Cash works exactly like Bitcoin. It uses blockchain technology to process transactions, which are certified by credible miners. You will need an address and a wallet, which shall contain your private key. This key is proof that you authenticated the transaction.
Bitcoin Cash was created, as the users were unhappy about the transaction time and miner fee required to complete the transaction. This is one of the reasons why Bitcoin Cash has proposed to employ 8MB to 32MB blocks, as opposed to 1MB of Bitcoin.
Over the years, Bitcoin Cash has also experienced increased scalability as compared to Bitcoin, allowing the number of transactions to surge to 25,000 per block, as opposed to just 1,500 in Bitcoin.
What are Current and Future Applications of Bitcoin Cash?
Many cryptocurrency exchanges have taken the necessary steps to incorporate Bitcoin Cash in their framework. You can now easily use the cryptocurrency, to buy and sell other cryptocurrency or transfer and receive funds.
Bitcoin Cash continues to grow, and merchants along with service providers are expected to follow suit regarding integration. However, since the cryptocurrency is in its early days, there are not many service providers and merchants that are listed on the network or accept BCH, as a mode of payment.
This holds especially true when compared to the expansive network of Bitcoin. However, BCH is fast-gaining the mantle of becoming more popular than Bitcoin, as more and more merchants realize its true value.
For instance, you can use Bitcoin Cash to pay for music, accommodation, fitness products, perfume, clothes and so much more. South Africans even pay their legal fees in Bitcoin Cash.
The main purpose of BCH continues to be used as a payment system. This means that, as the original Bitcoin Client, you can use it to process payments in a network, which is not only faster but also has lower transaction fees.
Being listed on the Coinbase exchange has added credibility to this altcoin. Coinbase is one of the world’s largest and well-known cryptocurrency brokers. The fact that they only have 4 other cryptocurrencies, improves awareness around Bitcoin Cash.
The future of Bitcoin Cash is uncertain because of the existing civil war dubbed the “Hash War” between two factions. That being said, the 8MB block size is a very alluring aspect, which is expected to benefit both the miners and the users.