What is Bitcoin Cash (BCH)?
Bitcoin Cash is the result of a hard fork. But what is a hard fork? A hard fork is an event that comes from a change. A fork is a separation of a blockchain into several parts.
There are two main categories of changes. Either the changes are backward compatible with the software, and therefore it is possible to implement them directly without changing much, in this case, it is called a soft fork. In case the update is more complex, and the community is divided, then we call it a hard fork.
A hard fork results in the creation of a new blockchain. We have seen this, for example, with Ethereum and the Ethereum Classic. Following the hack of a contract on Ethereum, the community decided to create a new blockchain without accounting for the money that had been stolen by the hacker. Another well-known example is Bitcoin and Bitcoin Cash.
Bitcoin Bitcoin Cash, the story
In August 2017, when Bitcoin started to really make news in the media, we noticed that on the Bitcoin network congestion and, therefore, transactions that, instead of taking between 1 and 10 minutes, were taking between 1.5 and 3 hours. The fees, instead of costing between 1 and 5 dollars, were costing between 10 and 30 dollars. The Bitcoin community split in two, with one side wanting to keep the code the same. The second wanted to improve the code to be more efficient. So Bitcoin Cash was created.
Bitcoin Cash is a kind of new Bitcoin where the block sizes are larger than on Bitcoin; therefore, it is possible to make more transactions per second.
Today in Bitcoin Cash, there are new conflicts that could lead to new hard forks. This would mean that, once again, the source code would be copied.
Should you invest in Bitcoin or Bitcoin Cash?
Bitcoin Cash is not the new Bitcoin or the original Bitcoin. In fact, some people would rather call it BCash.
Where there is a big debate is who was for the creation of Bitcoin Cash. It seems that there was not a majority of the Bitcoin community. However, a minority had many shares of the mining power. This allowed them to be very strong in negotiations. In particular, there was a stakeholder named Bitmain, along with other well-known players in the crypto world, who came out in favor of Bitcoin Cash.
Bitcoin Cash fees are lower than Bitcoin fees. This is well illustrated by the site txstreet. That said, Bitcoin's Lightning Network technology makes it possible to conduct transactions almost instantaneously and with very low fees.
Bitcoin Cash first proposed increasing the block size to 8MB, and it is now at 32MB.
What we have to tell ourselves when we choose investment support is not only a question of looking at who is going to be the best. This is a criterion but not the only one. What we need is a strategy. For example, a diversification strategy. You also need to spread your risk.
We won't go into all the technical details that separate Bitcoin from Bitcoin Cash in this article.
What you should know is that when there was this fork, all Bitcoin holders were automatically allocated Bitcoin Cash. During hard forks, there are often risks related to liquidity. Hard forks often generate volatility. A soft fork does not generate the creation of a new token.
Many people see Bitcoin Cash as simply an opportunity for some to create a new cryptocurrency. Bitcoin and Bitcoin Cash share the same roots and operate in very similar ways. The main difference between Bitcoin and Bitcoin Cash is the block size, which is 1MB for Bitcoin versus 32MB for Bitcoin Cash. We at Bitget are non-judgmental and leave our customers free to choose which crypto they want to use.
Disclaimer: All products and projects listed in this article are not endorsements and are provided for informational purposes only.
- Ice Network (ICE): Decentralizing Governance, Storage, and Connectivity for AllCryptocurrency2024-02-27 | 3 minutes
- IQ (IQ): Where Blockchain Meets AI for a Smarter TomorrowCryptocurrency2024-02-26 | 3 minutes
- Autonolas (OLAS): Rediscovering LEGO The Crypto WayCryptocurrency2024-02-22 | 3 minutes