What is Bitcoin Cash? Bitcoin Cash is a cryptocurrency with a decentralized peer-to-peer electronic money system similar to Bitcoin (BTC). Introduced to the public in 2017, Bitcoin Cash (BCH) is now priced at $39,201 as of August 2, 2021 with a market cap of around $736 billion.
History of Bitcoin Cash
Launched in August 2017, Bitcoin Cash was born due to differences of opinion among Bitcoin users regarding the block size in the blockchain. Block size is seen as one of the important factors as it relates to transaction volume processing.
The larger the block size, the more transactions that can be added. However, based on the existing Bitcoin protocol, the size of each transaction block is limited to 1 MB.
At first, the size was never an issue. However, due to the growth in the number of Bitcoin users, the transactions made have also increased. The large number of transactions that must be added and verified makes the block competition even tougher.
Such competition results in higher transaction fees and longer transaction settlement times than usual. Therefore, some have proposed increasing the block size of Bitcoin. However, others also feel the need to maintain the current block size.
Differences of opinion that never met a middle ground eventually resulted in a ‘hard fork‘ condition in the Bitcoin community, namely a condition where there were two different currents..
In order to get rid of the limitations of innovation, the bitcoin community branched out into two different versions. Bitcoin (BTC) with the old block size version and Bitcoin Cash (BCH) with the increased block size version.
Difference between Bitcoin Cash and Bitcoin
In general, the characteristics of Bitcoin Cash are almost similar to Bitcoin (BTC). However, there are several things that distinguish the two, namely:
1. Maximum block capacity
The main difference between Bitcoin and Bitcoin Cash is the block size. While Bitcoin (BTC) followed the old protocol with a maximum block limit of 1 MB, Bitcoin Cash offers a much larger capacity of around 32 MB.
This maximum capacity increase is intended to be able to process larger transaction volumes. Bitcoin has a transaction processing speed of around 3-7 transactions per second, whereas BCH can process up to 200 transactions per second, about 29x more.
With this transaction speed, BCH is able to reduce the tariff per transaction so that it is considered cheaper. Reporting from the Cointelegraph page, BCH has reached more than 9000 transactions per second and recorded 16.4 million transactions in a single block during the first half of 2021.
2. Smart Contract Support
In addition to basic transactions that can be carried out, users can also activate various more complex transaction functions by using Smart Contracts.
3. Schnorr Signature
This digital signature scheme is supported by the Bitcoin Cash protocol, but has not yet been widely adopted. This digital signature is intended to minimize the use of space, so that the transaction costs are also cheaper.
4. Difficulty Adjustment Algorithm
One of the advantages of this cryptocurrency is that it has a difficulty adjustment algorithm in its system. The algorithm is intended to control the addition of new blocks to keep it at a stable rate (every 10 minutes).
The algorithm will adjust the block access difficulty to be faster or easier. It depends on the production of new blocks, faster or slower than the normal block production speed.
Bitcoin Cash Features
Here are some of the advantages that Bitcoin Cash has, including:
This system has no owner and cannot be controlled by certain parties or agencies. Each existing protocol is defined by the users themselves by consensus.
All BCH transactions made by users will be recorded on the blockchain and can be viewed by the public. On the positive side, this system minimizes the risk of fraud and makes it easier for the public to track Bitcoin ownership.
In order to minimize the risk of identity abuse, BCH users can use pseudonyms for their transaction accounts.
4. Safe, Fast, Affordable
Blockchain technology guarantees that transactions that have been added cannot be changed easily. In addition, BCH transaction fees are also more affordable and faster.
How Bitcoin Cash Works
How Bitcoin Cash Works is exactly the same as Bitcoin. The system uses nodes and PoW (Proof-of-Work) algorithms to validate transactions. The only difference lies in the faster BCH operating rate and lower costs.
Bitcoin Cash is also linked to Smart Contracts such as CashShuffle and CashFusion. CashShuffle allows mixing of coins so transactions are more private and difficult to track. This service requires a third party.
Meanwhile, CashFusion works by placing BCH in a large transaction filled with other CashFusion users. Once done, the BCH will be returned to the user’s wallet again.
After reading a little information about Bitcoin Cash, are you interested in trying this crypto asset transaction?