Bitcoin Cash is a decentralized peer-to-peer payment system, a cryptocurrency that emerged as the hard fork of Bitcoin.
History and the reasons for Bitcoin Cash emergence
Bitcoin Cash (BCH) appeared on August 1, 2017. Its appearance was directly related to the problems accumulated in Bitcoin: limited block size (1 MB) and long delays of transactions. The Bitcoin community considered two solutions: either to increase the block size or to implement the SegWit update.
The first way was supported by miners because the total transactions fees are higher in a larger block. But other users were against this - this would lead to the need for more powerful equipment and network centralization by ousting small miners.
95% voted for the SegWit protocol that would relieve the Bitcoin network.
But a group of developers headed by former Facebook engineer Amaury Sechet didn't agree with it. As the result, at the 478558 block, the hard fork of Bitcoin happened, and the separate Bitcoin Cash blockchain appeared. Block № 478558 was the last common block for them.
The difference between Bitcoin Cash and Bitcoin
- The block size of BCH was 8 MB after the hard fork, and since May 2018 it is already 32 MB. In the BTC, it is still 1 MB.
- BCH developers desired to make the hash rate recalculation more flexible, for which they implemented EDA - Emergency Difficulty Adjustment. The idea was the hash rate recalculation each time when less than 6 blocks were created in 12 hours. This led to a high fluctuation in the hash rate, especially in the first months.
- The mechanism of transactions in BCH is more perfect - protection against erasing and replication of transactions were added.
Bitcoin Cash after the hard fork
The reaction of crypto community to the new coin was ambiguous. Many supported the "new Bitcoin", but there were those who considered BCH an empty shell.
The main supporter of Bitcoin Cash was Roger Ver - a serial IT entrepreneur and millionaire, one of the first adepts of Bitcoin and a high-profile figure in the crypto community. R. Ver has invested in the development of BCH and is promoting the new coin by all his power.
R. Ver proclaimed BCH "the true Bitcoin": "Bitcoin Cash is not an offshoot of Bitcoin. It is the original Bitcoin with the original functionality restored”. R. Ver has always been a fierce opponent of “BCash” name believing that Bitcoin Cash will replace Bitcoin and get rid of “Cash”. This caused the aggression of those who remained faithful to the traditional Bitcoin.
Despite the disagreements, BCH has become a very popular coin. On the launch day BCH cost ~ 280 $, the next day it was already 500 $. In the first month, the price jumped to 1000 $, and in the following months, the rate fluctuated in the range of 300 - 500 $. Since November 2017, BCH began to grow rapidly against the background of the general trend; the price rose to 5,000 $. In 2018, the BCH rate fluctuated within the general trend of the crypto market.
Interesting facts about Bitcoin Cash
- The owners of Bitcoins who switched to BCH, not only kept all the BTC at the time of the hard fork, but automatically received the same number of BCH. This was the so-called “double spending” effect.
- Large mining pools viaBTC and Bitmain might have been interested in creating BCH. In this regard, Bitcoin Cash presumably is more centralized than Bitcoin.
- On September 1, 2018, Bitcoin Cash successfully passed a stress test organized by the community. BCH perfectly coped with the network load and processed about 2.1 mln transactions per day; the average speed was 23 transactions per second. And the transaction fee remained very low.