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Bitcoin Cash (BCH) Cryptocurrency – The Definitive Guide
About this guide: Our Bitcoin Cash guide will tell you everything you need to know. We’ll explain what Bitcoin Cash (BCH) is, what it does and give our insight on the project. We do urge caution before making any cryptocurrency investments and encourage you to do your own research.
What Is Bitcoin Cash?
Bitcoin Cash was born from a hard fork of Bitcoin on August the 1st 2017. The Bitcoin community essentially split in two as there was disagreement on how to scale Bitcoin. The matter of scaling mattered because the Bitcoin community saw the need for the Bitcoin network to process more transactions per second as Bitcoin grew in popularity. After all, a currency that takes days or weeks to make a transaction and charge high fees is pretty useless.
The Bitcoin community favoured an off chain scaling solution whereas Bitcoin Cash supporters favoured an onchain solution. Today, Bitcoin has a block size limit of 2MB and Bitcoin Cash has one set at 8MB with further increases possible. The Bitcoin community think that processing some transactions off the chain is the best solution and have created the lightning network to do this. This lightning network takes transactions off the mainchain for processing and stops the mainchain from being overloaded.
This disagreement creates a confusing situation where we have more than one Bitcoin. The differences are not only technical ideological as the two groups have different visions for the future. The thing to know is that Bitcoin and Bitcoin Cash are two entirely separate cryptocurrencies. Don’t mistake one for the other despite their similar names.
You should know that the two Bitcoin communities do not get along at all. Supporters of either cryptocurrency, commonly play down the other Bitcoin and hype up their own coin. Just take what you read about Bitcoin and Bitcoin Cash with a pinch of salt and make sure you make your own decision when it comes in investing in either cryptocurrency.
A Deep Dive Into The Technical Differences Of Bitcoin & Bitcoin Cash
Bitcoin supporters argue that Bitcoin was never intended for micropayments like buying a MacDonalds. Instead, Bitcoin is for a store and transfer of larger value, similar to the role that gold plays. The Bitcoin Cash side of the community disagreed and argued that Bitcoin should be used like cash. Hence, the name Bitcoin Cash.
Increasing the block size to a larger 8MB means that Bitcoin Cash can process 2 million transactions a day. This can be further increased by raising the block size. Raising the block size may sound like a good idea but it comes with complications. An increased blocksize is essentially ramping up the speed of the network, and bigger blocks means more data to process for each transaction. This means smaller miners processing transactions cannot keep up and bigger players can. The result is that the bigger players take increasing control over the network and it becomes more centralised. No miner is big enough on the Bitcoin network to have 51% control over the network and there are an extraordinary number of miners. On the other hand, with Bitcoin Cash there are only 3 mining pools and together these actors control more than 51% of the network. Bitcoin Cash is therefore much more centralized than Bitcoin. Centralization may not be a bad thing, it just depends on if you trust these actors to behave properly.
What Other Differences Are There?
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Although Bitcoin Cash uses the same code base as Bitcoin, there are some other changes other than the increase in block size.
- Different Hash Algorithm: Bitcoin Cash uses a different one to Bitcoin. This means the two blockchains cannot communicate with each other. Practically this means that if you are sending Bitcoin or Bitcoin Cash to a wallet, be careful you have the correct address. Sending Bitcoin Cash to a Bitcoin wallet address will probably result in you losing your BCH.
- Mining Difficulty Can Be Changed: The mining difficulty for Bitcoin Cash can be changed. With Bitcoin, it is fixed. The idea is that changes can be made based on the number of miners to make the currency more stable.
- Transaction Signatures Are Different: These are different for Bitcoin and Bitcoin Cash.
Bitcoin & Bitcoin Cash: The Difference In Visions
The reason Bitcoin and Bitcoin Cash supporters don’t like each other is political. Bitcoin Cash guys even go as far to say that BCH is the ‘Real Bitcoin’ and is the cryptocurrency most in keeping with Satoshi Nakamoto’s white paper. For those that don’t know who Satoshi is, he is the mysterious inventor of Bitcoin.
Bitcoin Cash supporters argue that the block size should be increased to allow Bitcoin to be used like cash, from large transactions to micropayments for a packet of chewing gum. The reason why BCH supporters don’t like the Lightning Network is that they see it as a form of financial institution. They argue that this will lead to the very corruption and greed that Bitcoin wanted to eliminate in the first place. In fact, some BCH supporters argue that Bitcoin developers have clogged up the Bitcoin blockchain on purpose to ensure they can monetize off chain solutions like the Lightning Network.
Bitcoin supporters accuse Bitcoin Cash as stealing the Bitcoin brand name, being centralised and implementing a less secure network solution. The tribalism between Bitcoin and Bitcoin Cash has become so bad that many Bitcoin Cash supporters believe they are the embodiment of Satoshi Nakamoto and are now the ‘real’ Bitcoin. They actually refuse to call the original cryptocurrency ‘Bitcoin’ now and instead refer to it as ‘Bitcoin Core’. Bitcoin supporters try to disassociate Bitcoin Cash with the Bitcoin brand by calling it ‘BCASH’ and complain that Bitcoin Cash’s website is Bitcoin.com.
Bitcoin Cash Figurehead Roger Ver: Rage Quits Interview After Interviewer Insists On Calling Bitcoin Cash ‘BCASH’.
The Future Of Bitcoin Cash
No one knows if Bitcoin Cash and Bitcoin can co-exist in the future or which one of these cryptocurrencies will triumph. Bitcoin is banking on the Lightning Network as a scaling solution. Bitcoin Cash is banking on increasing the block size as being the correct solution.
If Bitcoin Cash lives up to their vision of being an alternative to regular currency, it could be that you use BCH for everyday transactions. Imagine a world where no matter where you are, a single currency is used. This could wipe out the currency exchange business overnight and instead of exchanging your USD for EUR when going on holiday, you would just bring your Bitcoin Cash wallet.
Bitcoin Cash challenges how we think about money. TotalCrypto cannot wait to see what the future might bring and how money will evolve.
Bitcoin Cash has a network of developers working on the project. TotalCrypto cannot question the talent of the team behind one of the biggest cryptocurrencies. Instead of going through the entire team, we will focus on Bitcoin Cash figurehead Roger Ver. Roger divides opinion in the cryptocurrency space, some love him and others hate him. However, he is the most visible supporter of Bitcoin Cash and is one of the most influential people in cryptocurrency.
Roger Ver: Born in Silicon Valley, it is maybe not surprising that Roger was destined to end up being heavily involved in the technology industry. After starting the successful business MemoryDealers.com and operating the business until 2012, Ver started investing in Bitcoin in 2011.
Roger saw the potential of the technology and it complemented his libertarian values. Indeed, in 2000 he even ran for the California State Assembly as a candidate for the Libertarian party. As a shrewd businessman, Ver started investing in cryptocurrency startups such as Bitpay, Kraken, Ripple and Blockchain.info. His business MemoryDealers.com was the first to accept Bitcoin as a payment method. Roger also owns the domain Bitcoin.com, which is now used as the official Bitcoin Cash website.
It doesn’t matter if you hate Roger Ver or love him. The point is that he was one of the earliest adopters of Bitcoin and invested in cryptocurrency startups when no one else was taking them seriously. Whether people like to admit it or not, the cryptocurrency community owes a lot to Roger and without him cryptocurrency may not be in the position we see ourselves today.
Ver’s early support and adoption of Bitcoin has lead to the nickname ‘Bitcoin Jesus’. There is little doubt that his support for the Bitcoin Cash project will be key to its success.
The Bitcoin Cash ICO
Bitcoin Cash didn’t have an ICO. When Bitcoin split into Bitcoin and Bitcoin Cash in August 2017, Bitcoin holders where given an equal amount of BCH. If you were lucky enough to have held 2.5 Bitcoin when the split happened, then you got an additional 2.5 Bitcoin Cash. Essentially Bitcoin owners got a very valuable cryptocurrency entirely for free.
Should I Invest In BCH?
It’s entirely your decision whether you invest in Bitcoin Cash or not. We are happy to give you our thoughts on the project though:
- Bitcoin Cash is focused on becoming the best form of digital cash possible.
- Transaction times are faster than Bitcoin.
- Transaction fees are cheaper than Bitcoin.
- Bitcoin Cash is focusing on merchant adoption
- Currently, Bitcoin Cash is highly centralised. This poses a danger that key actors will not operate in the best interests of the BCH community.
- The majority of the cryptocurrency community support Bitcoin over Bitcoin Cash as the ‘real’ Bitcoin. However, in time this support could shift over to Bitcoin Cash, but until it does then BCH will always be in Bitcoin’s shadow.
How To Buy Bitcoin Cash (BCH)?
The easiest way to buy Bitcoin Cash is though Coinbase. Here you can buy BCH with regular currency like USD, EUR or GBP. Need some help setting up your Coinbase account? Luckily we have prepared this awesome Coinbase walkthrough and take you through every step.
The TotalCrypto Team are very interested in seeing if Bitcoin Cash can increase adoption levels of cryptocurrency. If Bitcoin Cash becomes the go to peer-to-peer digital currency it is trying to be, then there is no doubt it will be exceptionally valuable. Both Bitcoin and Bitcoin Cash are similar cryptocurrencies. The difference is the levels of support they have, the technological tweaks that have been made to the original code base and vision. Only time will tell if the Bitcoin Cash scaling solution is the right one.
Below we’ve listed some key resources relevant to Bitcoin Cash (BCH).
? Safest BCH Wallets
Hardware wallets are the safest crypto storage solutions available. These wallets store your private keys and do not expose them to the outside world, making your crypto as safe as possible. Maybe you should treat your crypto like the million dollars it could well be worth one day?
Can’t decide if Trezor or Ledger is best for you? Just check out our Ledger Vs Trezor comparison guide.
? Best Free Wallets
? Best Apps To Track Your BCH Investment
Bitcoin Cash supporters believe their coin more closely resembles the Bitcoin laid out in Satochi’s white paper. Read the Bitcoin white paper and decide for yourself.