Bitcoin Cash: Carrying Out Satoshi Nakamoto's Vision For Sound Money
The open and decentralized nature of the Bitcoin protocol’s blockchain technology means that everyone can access the code base. Everyone has the opportunity to use the original code base to create a new chain. When there is a fundamental change applied to a protocol that will transform how it operates at the developmental level, a 'fork' occurs. A soft fork is when the entire community agrees to implement the change, but when they cannot come to a compromise, a hard fork takes place, splitting the chain into two distinct blockchains that share the same past but a different future. A hard fork is how Bitcoin Cash was born. This network was created in August 2017 with the apparent goal of removing bottlenecks like transactional processing and scalability that users experience within the Bitcoin blockchain,
The History of Bitcoin Cash
The history of Bitcoin Cash all started with a community disagreement in the Bitcoin community over network block size and scalability options. A majority of the Bitcoin community thought that block sizes should remain unchanged, but a large subsection wanted to increase block sizes to increase transaction speeds and reduce costs. This group saw these as hurdles that prevented Bitcoin from becoming a viable cash alternative.
By verifying more transactions per block, transaction finality is faster and more cost-effective, but decentralization has to be put on the chopping block, as much more storage space is needed to host the entire distributed ledger as a network validator, leaving out many cryptocurrency miners. The majority of the Biticoin camp saw this as a direct threat to genuine decentralization and thus did not want to enable larger blocks.
A solution was offered to the splintering community in the form of SegWit implementation. Although this solution increased transactional functionality as a layer two solution, the proponents of larger blocks did not think SegWit would increase network capacity enough. This group became known as the Bitcoin Cash community. Some large-scale miners, a few Bitcoin developers, and Roger Ver, the former CEO and current Executive Chairman of Bitcoin.com helped back the hard fork.
BCH Vs. BTC
As a hard fork, or non-unanimous software change to the Bitcoin (BTC) codebase, Bitcoin Cash (BCH) still shares many of the same characteristics as its predecessor. They both have 21 million total coins that the networks will ever issue, with BCH one-to-one airdropped to all BTC holders at the time of the hard fork on August 1, 2017. They also run on the same Proof-of-Work (PoW) algorithm, SHA-256, although BCH mining is significantly less profitable than BTC mining. On top of these commonalities, both cryptocurrencies have a 10 minute block time and both started with 50 BTC/BCH block rewards, featuring the same reward halving schedule every 210,000 blocks.
The main difference lies within the networks' block sizes, or how many transactions can fit inside a single block to be verified at once. Bitcoin has a block size of one megabyte, limiting the amount of data stored and verified every (approximately) ten minutes between new blocks. Initially, Bitcoin Cash started with a block size of eight megabytes, but has upped it significantly since then.
With the launch of Bitcoin Cash coincidentally coinciding with the bull run of late 2017, it started off hot, reaching an all-time high price of over $3500 per coin at its peak, worth 0.2 BTC at the end of December. However, since then, the value has dropped quite a bit.
Forks on Forks on Forks
Somewhat ironically, Bitcoin Cash has been forked numerous times since its inception. This seems to have happened for similar blocksize reasons as the original Bitcoin Cash hard fork, with each new iteration claiming to be the 'real' version of Bitcoin. The first fork occurred in 2018 when BCH forked into Bitcoin SV (BSV), standing for Bitcoin Satoshi's Vision.
The journey continued from there, with more hard forks proceeding to devalue the network as it fragmented further and further. The numbers show that if all of these new Bitcoin-iteration owners stayed with the original cryptocurrency instead of trying to implement their own as the 'real' Bitcoin, they would have retained much more of their wealth. Bitcoin Cash (BCH) and all of its offspring represent a fraction of the price of one Bitcoin (BTC), with the trend for all of them showing year-over-year devaluation against BTC.
Buying and Selling Bitcoin Cash
Bitcoin Cash (BCH) is available on most centralized exchanges (CEXs), as it is the fourteenth most valuable cryptocurrency by total market cap with daily trading volume of almost $2 billion. Huobi, Binance, and Coinbase Pro consistently rank as the top Bitcoin Cash exchanges by 24-hour trading volume.
Like Bitcoin , which Bitcoin Cash supporters have dubbed 'Bitcoin Core', it is harder to buy, sell, or trade Bitcoin Cash (BCH) on decentralized exchanges, as it is mostly incompatible with smart contract platforms. With many of the top decentralized exchanges only hosting Ethereum-based ERC20 tokens, Bitcoin Cash is essentially left out from the decentralized marketplace. One Bitcoin Cash exchange that allows for cross-chain and blockchain-agnostic asset exchange is AtomicDEX, enabling anyone to easily buy, sell, or trade their BCH with many other native blockchain assets. With the support of the BCH community, Komodo has recently raised funds for the integration of the SLP token standard, which is native to the Bitcoin Cash blockchain network. If you are a trader who wants full control over your keys and your coins, a DEX like AtomicDEX could be the right choice. Thousands of assets across dozens of blockchain networks are supported on AtomicDEX, including Bitcoin, Dogecoin, Zcash, Qtum, and many more.
Storing Bitcoin Cash
If you're looking for a Bitcoin Cash wallet, there are many centralized and decentralized crypto storage options, with 23 wallets listed on the Bitcoin Cash website alone. There are two extremely popular wallets for BCH. The first is the Bitcoin.com wallet, cleverly using the moniker of Bitcoin (although some consider to be confusing/misleading) to attract users to BCH. The second is the Electron Cash wallet. These are both hot wallets available on mobile and desktop, and provide good options for users to send and receive BCH.
As one of the largest cryptocurrencies, Bitcoin Cash also has many cold storage and hardware wallet options like Ledger and Trezor. If you are looking for a wallet that provides easy accessibility but better private key ownership and security, you can opt to use the AtomicDEX multi-asset digital wallet.Take Me To AtomicDEX Download
Summary and Future Outlook
If for some reason you are looking for a Bitcoin alternative to act as a more fluid transfer of value, you have many options to choose from, with Bitcoin Cash being only one of them. With block size as a core differentiator, it shows that enormous amounts of value can revolve around independent network factors. Still, in the end, the market shows the true value of each. Anyone can hard fork Bitcoin's codebase, and with so many other options to choose from including altcoins that don't use Bitcoin's codebase, Bitcoin Cash will need to deliver innovation that goes beyond the concept of sound money if it wants to remain as one of the top cryptocurrencies by market cap in the future.