Your own bank on a smartphone or what is Bitcoin Cash and is it a good investment?
This cryptocurrency has many names: Bitcoin Cash, Bitcoin ABC, BCC, BCH, BTCC, Bcash – it’s all the same. There are constant disputes around this cryptocurrency and they do not subside even today. Many cryptocurrency owners still cannot explain the difference between Bitcoin and Bitcoin Cash, but we have figured it out and will explain everything to you.
What is Bitcoin Cash?
Bitcoin Cash (BCH) was launched in August 2017 as a result of a hard fork of the Bitcoin (BTC) blockchain. A hard fork is essentially a blockchain divided into two parts, each of which becomes its own cryptocurrency with its own unique blockchain.
Unlike a soft fork, which is a blockchain update where only one of the parts of the blockchain that is split remains valid. Thus, when a fork occurs, anyone holding BTC will receive the same amount of BCH.
To improve network performance, the Bitcoin community decided to initiate SegWit2x, a mandatory blockchain update that should be supported by more than 95% of miners. At the same time, 1% of miners rejected the decision to update and united in a separate bitcoin fork called Bitcoin ABC. Now this currency with its updates functions in parallel with the original bitcoin.
Since then, the Bitcoin Cash project has evolved rapidly, adding new features and increasing the amount of data that can be stored in each block to 32 MB. (Bitcoin has since moved to a completely different system for calculating its transaction data.)
Bitcoin Cash has also borrowed features from other cryptocurrencies, including functionality that allows users to launch new types of tokens on its blockchain.
What is the difference between Bitcoin and Bitcoin Cash projects?
The most significant difference between Bitcoin and Bitcoin Cash cryptocurrencies is their approach to the overall design concept.
Bitcoin Cash developers generally believe that the growth of the BCH cryptocurrency’s value in the short term is most influenced by consumer payments. Therefore, users may find that it is more suitable for online spending.
The most significant feature of Bitcoin Cash is that the blocks in its blockchain can be larger, allowing it to process more transactions each time one is added. With the extra space available, users can avoid paying the fees used on the Bitcoin platform to prioritize during peak demand.
Advantages and disadvantages of Bitcoin Cash
Creating forks is not only a solution to the problem but also a profitable business. Often, developers are more interested in profit than in solving the real problems of the existing system. In many cases, the rate of new cryptocurrencies jumps after a hard fork, which brings developers a solid income.
Although Bitcoin Cash is one of the most successful forks in this regard, no one doubts the seriousness of this project today. Ranked 4th in the cryptocurrency ranking by capitalization according to CoinMarketCap, the digital currency has every chance of becoming the fastest and most reliable payment system without a blockchain. The obvious advantages of cryptocurrencies play a role here:
- Minuscule fees. In the PoW system, fees play a special role. Bitcoin Cash offers a healthy alternative – less than 1 cent per transaction between any users. At the same time, the transfer time between users’ wallets will be less than 2 minutes.
- The problem of the Bitcoin network is solved. Waiting for confirmation even during busy periods is less than 2 minutes. For example, for Bitcoin, the transfer confirmation time is 1-2 hours, and the global currency transfer system SWIFT takes 10-15 minutes.
- Decentralized technology. Since several independent groups are involved in the development, it is more difficult for large players to influence the transformation of the cryptocurrency protocol. This creates an additional degree of protection against attack 51, as the concentration of power in one person is monitored and warned by the developers in time. At the same time, ordinary users from the Bitcoin community initiate the creation of forks. Each of them is interested in the decentralization of cryptocurrency in his or her own way.
- No waiting queue for confirmation. No matter how many miners are involved in the process of calculating hash amounts, the block processing speed will always remain at the same level.
- System reliability. The first cryptocurrency is considered the most reliable project on the blockchain. It was created and developed by professional cryptographers, mathematicians, and developers. Bitcoin Cash was created on the basis of this system, which incorporated the best aspects of distributed computing and data storage technology. Additional security of the system is provided by the stable audience of the project.
- Pseudonymity and signatures for the hash amount. To speed up the transaction processing process and increase the confidentiality and reliability of the system, the developers have additionally introduced the formation of a digital signature for each hash amount.
- Global perspective. To compete with global banking systems, it is not enough to simply use blockchain technology. Bitcoin Cash offers a universal alternative – the reliability of a blockchain-based system and the speed of the most advanced bank transfers.
How to buy or sell Bitcoin Cash
Buying and exchanging BCH is as easy as buying and exchanging Bitcoin. To place the purchased cryptocurrency somewhere, you need to create a wallet with a bitcoin address. The developers did not create their own wallet, but rather offer to use the Bitcoin Core as the main storage system. This is convenient for both investors and miners – you can simultaneously store both the first cryptocurrency and its promising analog on the same wallet.
If you decide not to waste your energy on mining, there are three ways to buy BCH:
- purchase by individuals on LocalBitcoinCash.org
- using popular cryptocurrency exchangers or ATMs
- buying BCH on exchanges
Conclusion
It is impossible to properly predict the future of Bitcoin Cash. Too many factors of successful development depend on humanity and the state of the global financial system. The possibility of hacker attacks or system vulnerabilities is not excluded.
