Bitcoin cash is a cryptocurrency created in 2017. Here is everything you need to know about Bitcoin cash.
Bitcoin has inspired robust innovation since its inception in 2009, and Bitcoin Cash is one of its most notable proteges. Bitcoin cash is a crypto developed in 2017 from a Bitcoin fork. Its introduction alleviated Bitcoin’s scalability problem, increasing the size of blocks on the blockchain. This allowed the network to process more transactions quickly, thereby meeting the growing market demand.
Bitcoin cash also underwent another fork in 2018, splitting into Bitcoin Cash ABC and Bitcoin Cash SV. The fork is known as Bitcoin cash because it builds on the original Bitcoin cash client. Nevertheless, there are a few things you need to know to understand Bitcoin Cash and how it works.
Understanding Bitcoin Cash
The distinction between bitcoin and bitcoin cash is mainly philosophical. Bitcoin Satoshi envisioned Bitcoin as a peer-to-peer cryptocurrency for everyday transactions. However, Bitcoin’s growing mainstream adoption and meteoric growth over the past few years has earned it the status of an investment asset.
Bitcoin’s blockchain is having scalability issues mainly because it couldn’t handle the increased number of transactions. Its block size was limited to only 1 MB. And this has impacted longer payment processing times and higher transaction fees for Bitcoin users.
Bitcoin cash offers a way to solve the situation by increasing the block size between 8M and 32MB. This allows the network to process more transactions per block, reducing latency and costs. At the time of Bitcoin Cash’s debut, Bitcoin was processing an average of 1,000 to 1,500 transactions per block. A Bitcoin cash blockchain stress test in 2018 proved that it could handle up to 25,000 transactions per block.
Many proponents of Bitcoin cash applauded it, saying changing Bitcoin’s block size would promote its use as a medium for everyday transactions. Additionally, they argue that it would help compete with established multinational credit card processors that typically charge higher fees for making cross-border payments. the BitIQ is one of the most reputable platforms for processing international money transfers with Bitcoin.
Bitcoin cash differs from Bitcoin because it does not integrate SegWit (Segregated Witness). SegWit is another proposed solution to increase the number of transactions per block. It keeps small pieces of information related to block transactions.
Similarities Between Bitcoin and Bitcoin Cash
Bitcoin and Bitcoin cash also share several characteristics. For example, both use the PoW (Proof of Work) consensus mechanism to create new tokens. They also rely on Bitmain services, the largest crypto mining platform in the world.
Like Bitcoin, the supply of Bitcoin cash cannot exceed 21 million only. Both cryptocurrencies also started with the same mining difficulty algorithm, known as Emergency Difficulty Adjustment. The algorithm adjusts the crypto mining difficulty levels every block of 2016 or on average every two weeks.
Miners have taken advantage of the similarities between bitcoin and bitcoin cash to alternate their operations. It was profitable, but it also became detrimental to the growing supply of the Bitcoin spot market. This prompted Bitcoin cash to overhaul its EDA algorithm to make it easier for miners to mint new coins.
Bitcoin Cash ABC and Bitcoin Cash SV
Bitcoin cash split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision) in 2018. Bitcoin cash ABC uses the original Bitcoin cash client, but its blockchain has incorporated many changes, such as the CTOR which rearranges transactions in a block to a particular order. Bitcoin cash SV rejected the integration of smart contracts into its ecosystem. Nonetheless, both have attracted significant valuations across major crypto exchanges around the world since their inception.
Overall, Bitcoin Cash promises several improvements over its predecessor. It has delivered on most of those promises so far, but some are still concerned about its relatively smaller block size than Bitcoin’s blockchain.
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