Bitcoin Cash (BCH) is a decentralized cryptocurrency that emerged as a fork of Bitcoin (BTC) in August 2017. It was created to address some of the limitations associated with Bitcoin, particularly focusing on increasing transaction speed and reducing transaction fees by expanding the block size limit.
The origin of Bitcoin Cash
Bitcoin Cash originated from a debate within the Bitcoin community about how to scale the network to accommodate more transactions. This debate centered around the scalability of Bitcoin, which was becoming a significant issue as the network gained popularity and transaction volumes increased. The existing block size limit of 1 MB was causing delays and higher transaction fees.
To address these issues, a group of developers proposed increasing the block size limit. This proposal, however, was met with opposition, leading to a split in the community. The result was the creation of Bitcoin Cash, which implemented an 8 MB block size limit at its inception, allowing more transactions to be processed per block.
Technical aspects of Bitcoin Cash
Block size
One of the primary technical differences between Bitcoin and Bitcoin Cash is the block size limit. Bitcoin Cash initially increased the block size from Bitcoin's 1 MB to 8 MB and later to 32 MB. This increase aims to enable more transactions per block, potentially improving the speed and reducing the cost of transactions on the network.
Transaction speed and fees
By increasing the block size, Bitcoin Cash aims to facilitate faster and cheaper transactions compared to Bitcoin. Larger blocks can handle more transactions, which can reduce congestion and lower the fees required to prioritize a transaction.
Algorithm and mining
Bitcoin Cash utilizes the same SHA-256 proof-of-work (PoW) algorithm as Bitcoin, allowing miners to switch between the two networks with relative ease. This compatibility has led to a shared mining community, although there are differences in the way difficulty adjustments are handled. Bitcoin Cash implements a different difficulty adjustment algorithm, known as the Emergency Difficulty Adjustment (EDA), to ensure a consistent rate of block production.
Adoption and use cases
Merchant adoption
Bitcoin Cash has been adopted by various merchants and platforms as a payment option. Its focus on faster, lower-cost transactions makes it attractive for everyday transactions and micro-payments.
Peer-to-peer transactions
The cryptocurrency is also popular for peer-to-peer transactions, providing users with a means to send money quickly and inexpensively across borders without the need for traditional financial intermediaries.
Development team
Bitcoin Cash is maintained by multiple independent development teams, contributing to its open-source codebase. This decentralized development structure allows for a wide range of input and innovation, although it can also lead to differing opinions on the direction and upgrades of the network.