As the Bitcoin network gained more users, the speed of transactions of the protocol declined. This became a roadblock to global adoption. Further, transaction fees increased significantly as the Bitcoin network faced more congestion. These issues faced by Bitcoin users birthed Bitcoin Cash.
Bitcoin Cash was introduced to the crypto ecosystem to solve the problem of transaction speed and high fees on the Bitcoin network. The BCH network went live in 2017 and complemented Bitcoin. While BCH is primarily used for payment, it has other amazing use cases.
What is Bitcoin Cash (BCH)?
BCH is a cryptocurrency that was forked from Bitcoin. The creation of BCH is attributed to Bitman, who proposed the Bitcoin fork in 2016. Another notable contributor to the development of BCH is Roger Ver, a famous crypto figure who started investing in cryptocurrencies in 2011.
The crypto asset was created to sync with Satoshi Nakamoto’s vision. When Satoshi Nakamoto created Bitcoin in 2008, the Bitcoin whitepaper contained the main goals of the then-new cryptocurrency. Bitcoin was to serve as a peer-to-peer electronic cash that the government would not control. While the government has never controlled Bitcoin, the flagship cryptocurrency failed to satisfy users as the ultimate electronic cash.
Network congestion caused transactions to lag, and transaction fees were higher than that on traditional payment platforms or systems. These issues led Bitman, a mining hardware manufacturer, to propose a hard fork for BTC. The Bitcoin community proceeded with the proposal, and BCH was created in 2017.
How Does BCH Work?
BCH has a similar working model to Bitcoin, its parent blockchain. It utilizes the proof of work consensus mechanism, and BCH tokens are created through mining. The proof of work mechanism and BCH mining are briefly explained below:
The Proof of Work Consensus Mechanism
This is the process used to validate mined blocks. It involves miners who compete to solve complex problems on the blockchain. The miners are rewarded with BCH tokens for solving these problems and securing the network.
BCH Mining
BCH mining involves confirming new BCH transactions on the network. Miners use computers to participate in the BCH network. Typically, the more advanced a mining system is, the greater the BCH rewards miners earn. The more miners the network has, the more secure the network is.
The Bitcoin Cash Coin (BCH)
BCH coins are mined just like BTC. BCH uses the proof-of-work validation model. The more miners the BCH network has, the lesser the coins miners earn for validation blocks. However, the BCH network is more secure with more miners.
BCH’s primary use is as a means of payment. Transaction fees on the BCH network can be as low as 1/10 of a cent. Also, since BCH has a block size larger than that of BTC, transactions are faster. BCH can also be traded against BTC or USDT for profits. Many trading platforms like Gate.io and Binance support leverage trading for BCH.
BCH has a maximum supply of 21 million BCH tokens. Currently, 19,393,950 BCH tokens have been mined. There’s less than 8% of BCH left to be mined.
When BCH first launched, it was distributed to all Bitcoin holders at a one-to-one ratio. Currently, about 92.5% of BCH is in circulation. According to data from Coincarp, over 17 million different wallet addresses hold BCH. The largest wallet currently holds about 4.26% of the circulating supply.
BCH: Recent Developments
The most recent development in the BCH ecosystem is its listing on the EDX exchange. Just 24 hours after the listing, BCH’s price surged by 34%. That same week, BCH gained over 100%, boasting the highest gains amongst all four listed cryptocurrencies. Perhaps, what made the exchange listing unique is the fact that Fidelity, Schwab, and Citadel back the new exchange. Additionally, BCH was one of the four cryptocurrencies listed on the exchange.
Out of the 20,000+ cryptocurrencies in the crypto market, the EDX exchange noted that Bitcoin, Ethereum, Litecoin, and Bitcoin Cash are viewed as commodities. Hence, regulatory bodies like the US Securities and Exchange Commission (SEC) would have little to no basis for igniting a legal battle against EDX markets in the future.
BCH: Future Expansion Plans
BCH miners currently earn an average reward of 6.25 BCH per block. In the near future, BCH mining rewards will reduce. The next BCH halving is expected to occur sometime in January 2024. After the halving, BCH mining rewards will reduce to 3.125 BCH per block. The halving event is typically followed by a new positive valuation in the coming months.
FAQs
How is Bitcoin Cash Different From BSV?
BCH was forked from Bitcoin in 2017, while BSV is Bitcoin Cash Satoshi Version, a fork of BCH. The Development of BSV was championed by Craig Wright, who proposed that neither Bitcoin nor its forks meet up with the goals of Satoshi Nakamoto in the Bitcoin whitepaper. According to Craig Wright, BSV is the “perfect Bitcoin” and is a more technologically advanced version of BTC.
Is BCH Better than BTC?
In terms of transaction speed and network fees, BCH is better than BTC. However, BTC is the most decentralized cryptocurrency, and not even Ethereum comes close. The level of decentralization on the Bitcoin network makes it secure for transactions.
How do I Buy and Trade BCH?
You can easily buy and store BCH on some leading cryptocurrency exchanges like Binance and Gate.io have a high trading volume for BCH. Other trading exchanges that sell BCH include Coinbase, KuCoin, Kraken, Bitget, and Bitmart.
