Bitcoin Cash—represented by the BCH ticker symbol—launched in mid-2017 after a Bitcoin hard fork.
The token aims to favor those who want to use it as a real-world currency rather than as an investment vehicle.
But who’s behind Bitcoin Cash? How does it work? And what are its key strengths?
What Is Bitcoin Cash?
Bitcoin Cash grew out of the desire to rectify one of Bitcoin’s most commonly-cited problems: scalability.
Specifically, there are on-going concerns about the number of transactions that the Bitcoin network can handle at a given time. The 1MB block size—which is the root of the problem—leads to long processing delays.
By May 2017, there were reports of some users waiting for up to four days for their transactions to clear. Transaction fees were also spiraling out of control. It became impossible to use Bitcoin to pay small bills; the transaction fees would dwarf the cost of the purchased product.
In response to the growing problem, a group led by Roger Ver and Amaury Séchet decided to hard fork Bitcoin’s blockchain and launch a new token. Bitcoin Cash was born, and all existing Bitcoin holders immediately received the same number of tokens in Bitcoin Cash.
Today, the development team consists of a decentralized group of engineers from projects such as Bitcoin Unlimited, Bitcoin XT, and Parity Bitcoin.
The first new block on the Bitcoin Cash blockchain was dated 1 August 2017. On its first day, Bitcoin Cash traded for $240. At the time, Bitcoin was valued at $2,700.
Bitcoin Cash hit the headlines in late 2018 after undergoing another fork. The new coin became Bitcoin SV; it currently trades for around $60.
Check out our article on the Bitcoin Cash hard fork if you would like to learn more.
How Does Bitcoin Cash Work?
Bitcoin’s 1MB block size means it has the ability to process around seven transactions per second. For comparison, Visa can handle around 24,000.
Bitcoin Cash increased the block size to 8MB, thus allowing about 70 transactions per second. Nowhere near Visa’s levels, but enough to reduce transaction speeds down to seconds and simultaneously slash processing fees.
More importantly, Bitcoin Cash will be possible to scale in the future. As demand grows, the transactions per second could theoretically be scaled to millions.
Because it is a Bitcoin fork, much about the way Bitcoin Cash works is identical to its big brother. That includes 10-minute block intervals, bi-weekly difficulty adjustment, and use of an SHA-256 proof-of-work algorithm.
If you want to learn more about how Bitcoin works, read our complete Bitcoin guide.
The Bitcoin Cash White Paper
Curiously, Bitcoin Cash does not have its own whitepaper. Instead, it relies on the original Bitcoin whitepaper that Satoshi Nakamoto published in October 2008.
It might sound odd to use Bitcoin’s whitepaper—but that’s by design. Many people will be surprised to learn that Bitcoin Cash follows Nakamoto’s original whitepaper far more closely than the original Bitcoin now does.
For example, Bitcoin scaled off-chain using the lightning network, and the Bitcoin blockchain uses a SegWit-compatible transaction and incentive structure that the Bitcoin Core team developed. Neither of those things is in the original Bitcoin whitepaper.
How Much Does Bitcoin Cash Cost?
At the time of writing in March 2019, a unit of Bitcoin Cash is worth $160. Bitcoin is trading at $4,000.
Bitcoin Cash’s all-time high occurred on 20 December 2017 when the value hit $3,785.82. It is currently down 95.9 percent from that figure.
Based on the current price, Bitcoin Cash has a market cap of $2.7 billion. That makes it the sixth largest crypto in the world, behind Bitcoin, Ethereum, Ripple, Litecoin, and EOS.
Like Bitcoin, the total supply of Bitcoin Cash is capped at 21 million. At the moment, there are 17.6 million Bitcoin Cash tokens in circulation.
Where to Buy Bitcoin Cash
Despite its inauspicious beginnings and recent dramas, Bitcoin Cash has grown into one of the most popular cryptocurrencies in the world.
Because of its popularity, you can buy Bitcoin Cash on all the major exchanges, Coinbase, Binance, HitBTC, and Kraken.
In 2019, the average daily trading volume has been around $380 million. The biggest market is the BTC/BCH pairing on P2PB2B; it sees about $30 million traded per day. The BCH/USD pairing on the same market has $25 million of volume.
The other largest Bitcoin Cash markets are on ZBG, HitBTC, and LBank.
Buying a bag of Bitcoin Cash? Sign-up for a Coinbase account using our link to make your first BCH purchase. If you buy or sell $100 using our Coinbase link, Coinbase will give you an $10 in your account. Free money!
What’s Bitcoin Cash’s Future Potential?
The crypto space is a volatile one. It would be foolish to try and predict what will be successful in a month, let alone what the landscape might look like in five years’ time.
Nonetheless, the Bitcoin Cash developers appear to have a clear vision of what they want to token to look like in the future.
In the coin’s official roadmap, the plans are divided into three broad categories:
- Scalability: Create the necessary technical improvements that will allow BCH to scale to five million transactions per second.
- Usability: Make Bitcoin Cash easier and more enjoyable to use, with specific improvements to the payment experience.
- Extensibility: Provide an extensible protocol that becomes a reliable bedrock for businesses and developers.
Join the Bitcoin Cash Community
If you’d like to learn more about Bitcoin Cash, you should join the online community. You can find conversations happening in all the usual places:
Make sure you let us know about other online Bitcoin Cash communities in the comments below.
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