Bitcoin Cash (COIN: $BCH) emerged in 2017 as a cryptocurrency that “forked” from Bitcoin (BTC), the world’s largest cryptocurrency, primarily due to a schism in the vision for the blockchain’s future. What does this mean?
A fork materializes when a community decides to introduce alterations to the blockchain’s protocol, the fundamental set of rules governing it, resulting in the creation of a new blockchain.
In the case of Bitcoin Cash, the community’s aim was to devise a cryptocurrency that excelled in facilitating cost-effective, day-to-day transactions when compared to Bitcoin.
Bitcoin, despite its original designation as “Peer-to-Peer Electronic Cash” in its 2009 whitepaper, encountered hurdles in functioning as everyday cash primarily due to high transaction fees.
As of May 10, 2021, the median cost of sending a Bitcoin transaction was around $8.00. Buying a cup of coffee with Bitcoin would be impractical at such costs.
While “second layer” solutions, such as the Lightning Network, promised reduced fees, Bitcoin transaction fees remained substantial (as of December 2021, Bitcoin fees had fallen to less than $1.00 per transaction, whereas Bitcoin Cash fees typically amounted to less than $0.01 per transaction).
In 2017, as Bitcoin’s popularity surged and network fees escalated, a faction of Bitcoin developers proposed a technical remedy to enhance Bitcoin’s suitability for smaller transactions.
Essentially, these developers introduced a fresh version of Bitcoin’s software, which expanded the size of Bitcoin’s blockchain, thereby enabling the processing of more transactions.
However, a majority of Bitcoin developers and users disagreed with this software proposal, leading to a “fork” that birthed Bitcoin Cash as a separate blockchain.
Nevertheless, Bitcoin Cash preserved certain core attributes of Bitcoin, such as the capped supply of 21 million coins.
The rejection of Bitcoin Cash’s technology by many Bitcoin developers and users stemmed from the critical trade-off associated with a larger blockchain.
While it could support a greater number of transactions, thus enabling lower transaction costs, a larger blockchain posed challenges in terms of validation and storage on the thousands of computers distributed globally, which underpin Bitcoin’s decentralized nature.
This decentralization ensures that no single entity can manipulate Bitcoin’s core blockchain.
Bitcoin Cash (BCH) Price Today.
As of today, Bitcoin Cash price (BCH) is trading at $213.18, with a 24-hour trading volume totaling $127,647,349.02. Over the past 24 hours, BCH has experienced a modest price decrease of -0.37%, and in the previous week, it has seen a decline of -7.71%.
With a circulating supply of 20 million BCH, Bitcoin Cash currently holds a market capitalization of $4,166,030,107.
Difference Between Bitcoin Cash And Bitcoin?
Bitcoin Cash was hailed by some enthusiasts as the authentic embodiment of Satoshi Nakamoto’s original vision for Bitcoin as a decentralized, peer-to-peer electronic cash system.
Notably, when the blockchain split occurred at block 478,558, all existing Bitcoin holders automatically found themselves holding Bitcoin Cash as well.
From a technical standpoint, Bitcoin Cash closely mirrors the Bitcoin algorithm in several key aspects.
Both cryptocurrencies uphold a strict cap of 21 million coins, employing a Proof-of-Work (PoW) consensus mechanism alongside nodes to validate transactions.
However, Bitcoin Cash distinguishes itself from Bitcoin (BTC) in its pursuit of scalability to fulfill the requirements of a global payment network. At the time of the fork, Bitcoin Cash impressively increased its block size from 1MB to 8MB.
This amplified block size significantly augments the network’s transaction-processing capacity, enabling a greater number of transactions per second (TPS), all while maintaining remarkably low transaction fees.
This development effectively addresses the challenges of payment delays and high fees that some Bitcoin (BTC) users encountered.
As of 2023, Bitcoin Cash has further increased its block size to 32MB, a notable contrast to Bitcoin’s enduring 1MB block size.
How Does BCH Work?
Bitcoin Cash (BCH) operates with improved speed and reduced transaction costs, thanks to its larger block size. Additionally, it embraces smart contracts and ecosystem applications.
With a limited total supply of 21 million coins, Bitcoin Cash is inherently scarce, akin to physical cash, facilitating easy spending. Transactions are swift, typically incurring fees less than one-tenth of a cent.
Bitcoin Cash boasts a diverse range of applications. Beyond facilitating peer-to-peer transactions among individuals, it serves as a means to pay participating vendors for their products and services, both in physical stores and online.
Its minimal fees open the door to micro-transactions, like content creator tips and small rewards for app users. Furthermore, Bitcoin Cash streamlines remittances and international trade by reducing costs and settlement times.
It also supports various other functions, such as tokens, simplified smart contracts, and private payments through tools like CashShuffle and CashFusion.
How Do You Mine $BCH?
Mining involves the verification of new Bitcoin Cash transactions and the addition of fresh blocks to the blockchain.
Miners harness computational power and electricity to tackle intricate puzzles, resulting in the creation of new transaction blocks. If the network accepts one of their blocks, the miner or mining pool is rewarded with newly-issued Bitcoin Cash.
This mining process is intensely competitive. When the market value of Bitcoin Cash rises, it entices more miners to contribute additional hash rate to the continually escalating competition for block production and acceptance within the Bitcoin Cash network.
The greater number of miners heightens blockchain security by amplifying and dispersing the hash rate. This collective effort ensures that no single miner can wield control over the network, preserving its decentralized nature.
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