Bitcoin Cash is one of the most popular cryptocurrency in terms of market capitalization. It currently ranked 4th with circulating supply of 17,240,788 BCH at the moment. Overshadowed by the popularity of Bitcoin there are still important things you need to know about Bitcoin Cash if you are planning to purchase some.
- What is Bitcoin Cash?
Bitcoin cash is the product of the hard work and persistence of developers who wanted to increase Bitcoin (BTC) block size limit by creating a code change called hard fork. BCH or Bitcoin cash was introduced last 1st of August 2017, and it was the time when bitcoin ledger known as blockchain and cryptocurrency separate in two.
- Bitcoin Cash Scalability
One of the biggest issues for cryptocurrencies has always been its scalability or its ability to expand its feature so as to accommodate the needs and demands of cryptocoins owners. 1MB is the limited or regular size of the block of transactions which caused a substantial delay in transactions processing time.
The 1MB size of a block also limits the number of transactions the network can process. And that applies to the major cryptocurrency known as Bitcoin. On the other hand, BCH was a different thing because it allowed to increase the block size from 1MB to 8MB.
- Why Increase the BCH scalability?
The 1MB to 8MB increase of Bitcoin Cash block size was a bold move to compete with the volume of transactions like industry giants PayPal and Visa transaction per second.
Visa is able to process up to 24,000 transaction per second compared to the 4,000 transaction per second by Bitcoin. The maximum capacity of 1MB/block size is able to process only 3-7 transactions/seconds. Bitcoin cash on the other hand with eight times larger block size is able to process around 61 transactions/seconds.
Even with the increase of block size it doesn’t even comes close to the existing centralized payment processing company Visa.
- Why Bitcoin Cash was created?
The story behind the hard fork BCH is to increase the block size and process more transactions per second. The 1MB limit for the size of every block was originally implemented to lower the possibility of potential spam and security issues. As the BTC grew more popular, the limit start causing blocks to pile up which extended transaction time.
The situation got out of hand when in May of 2017, a user reported that he was waiting for confirmation that extended up to 4 days.
Users had a chance to pay high transaction fees to speed up the confirmation. But this approach basically prevent BTC to be a convenient payment method especially to smaller transactions.
For instance, paying for a sandwich or a cup of coffee with $3 value will have to be on a queue longer but if you want to speed up the process, you need to pay an additional $20 for the transaction fee. It causes hysteria and nobody wanted charges bigger than your purchase. That is the reason why the Bitcoin community came up with the possible solution to this situation, and they called it a segregated witness or a segwit.
- What is a segwit for BCH?
The segregated witness solution or segwit implied storing some of the information in separate files outside of the blockchain. Developers claim that it would free up a lot of storage space. The block will feed more transactions and the confirmation time will decrease significantly.
The general public believed it was just a more complicated and temporary solution. When compared to the Bitcoin white paper that build super electronic cash system as unlimited approach. A team of developers decided to abandon the sacred protocol and increase the block size limit to 8MB from 1MB.
- What is a BCH Hard Fork?
A hard Fork is the currently known method for developers to update Bitcoin software. Developers split the network and essentially create a new blockchain with a different rule.
The original and forked version of cryptocurrencies have identical blockchain all the way up to the split. Accurate from their own, the two networks exist independently.
After the split happened, everyone who held bitcoins before the hard fork received the same amount of bitcoin cash tokens.
- Best part of Bitcoin Cash
The Bitcoin cash is much cheaper to use than Bitcoin, the very reason why this cryptocurrency was the quickly appreciated and adopted by investors.
Bitcoin cash transaction was 99 percent cheaper than the equivalent transaction on the original Bitcoin network.
- Where to buy and store Bitcoin Cash?
A bitcoin cash is relatively new cryptocurrency not every major exchange support it yet. The most powerful exchange that supports Bitcoin cash is coinbase. A known exchange and wallet where you can store Bitcoin cash and other cryptocurrencies.
You can store Bitcoin cash in various mobile and desktop wallets such as Jack’s and Bitcoin unlimited but the recommend hardware wallets are Ledger Nano ass and Treasurer.