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The Bitcoin Cash One-Stop Guide

Bitcoin (BTC), the first and leading cryptocurrency made its debut almost a decade ago and still remains at the top and continues dominating in terms of performance over other coins. In addition to being the first cryptocurrency, Bitcoin is also the strongest, most valuable and followed digital currency. As with all these, Bitcoin is far from a perfect coin and presents several issues of its own, notably its scalability and the 1 megabyte limit on mined blocks. Bitcoin Cash (BCH), on the other hand, brought more to the table.

BCH Split

Bitcoin Cash differed from other variations due to expanding the size of a block from 1 to 8 MB in size, essentially increasing the amount of BCH mined from a single block.

BCH’s aim was to provide additional transactions and the amount that could occur and be processed by the platform in hopes of competing with other industrial transaction “kings”  like PayPal. Bitcoin Cash was created and launched last year and is currently the most successful split-off from BTC.

Blocks were designed with a 1 MB size limit as a means of cutting down on any risks of a spam attack or a DDoS. With a few numbers of transactions occurring on the platform, the limit had no impact on anything. With BTC growing in favor among its community, increased blocks would start piling and only served to make transactions go on even longer and for no specific reason.

Eventually, this got out of control last year when platform users filed complaints after transactions took up for four entire days to be fully confirmed by the system. Additionally, more fees for the transaction could be paid to accelerate the process although this would prove to be pointless as Bitcoin would become essentially worthless at this rate. As an example for a clearer image, when purchasing a bottle of water with Bitcoin, what would usually cost three USD would eventually become a $15 payment due to the cost of transactions.

In light of this situation, the community banded together for a possible answer to the problem and eventually provided a couple of alternative approaches, Bitcoin Unlimited (BU) and SegWit. BU eliminated the concept of a restriction on a block completely. Cryptocurrency miners reacted more than positively to this due to the fact that blocks would no longer see pile-ups like with BTC first and a no-limit policy on blocks would result in higher fees for the miners. On the other hand, many believed that this would result in a centralized network and small-scale miners would be forced out of business.

SegWit, Segregated Witness, was a solution introduced in which a few files would be stored off-chain. Developers then stated that this would provide more storage on the blockchain and as a result, more transaction and fewer processing times would follow despite the fact that many others believed this was a momentary solution and favored the BTC Unlimited solution to the current issues.

Due to the conflicting opinions among developers, SegWit2x was designed and created. The new protocol would increase blocks from 1 MB to 2 megabytes and store data on the network, two birds with one stone. This new method was added on the 1st of August last year after a massive majority vote by miners for SegWit2x. This solution, however, was viewed as a delay to the actual problem as opposed to a one-time solution.

During a BTC-related event, Amaury Séchet, previously employed at Facebook, announced the initial introduction of BCH as Bitcoin ABC. Séchet and his colleagues had decided to fully forsake SegWit2x and upgrade all blocks to 8 MB. A change of this magnitude demanded a split, or a hard fork, from the BTC network and was scheduled for the 1st of August last year.

What a hard fork means is that a group of individuals will essentially take a part of the blockchain and create an entirely new one with its own set of rules. This method is the only one available for enhancing or updating BTC software. Both blockchains are exactly the same up until the point where the split began and from there, both blockchains are completely separated. In addition, those that chose to operate on Bitcoin Cash were granted the same exact number of coins as they held on Bitcoin’s original blockchain prior to the fork.

BCH was incredibly well received and within just 24 hours of its creation and release, the coin became the third highest ranking crypto in the total market cap, right behind ETH and BTC.

Cost-efficient?

BCH is way more "affordable" than BTC. As seen with Bitcoin, it’s incredibly costly transaction fees and the consistent rise they display was among the leading reasons for the split. As per a test that was conducted last year, research displayed a massive 99 percent lower cost of transactions than on BTC.


During last December, transaction fees had climbed so unbelievable levels, with one user even stating that a $25 transaction ended up costing $16 in fees, essentially acquiring a massive commission fee from just one transaction.


Criticism

A hard fork is never an easy transition in regards to crypto. Many even stated that this violates the very nature of blockchain-tech due to the immutability laws that make up a blockchain.

In light of this very specific hard fork, down talkers expressed concerns related to the CPU power needed for mining large blocks on the chain, stating that this would essentially force out small-scale cryptocurrency miners and may go against the decentralized aspect by placing a majority of the power within bigger companies with better-equipped resources.

Additionally, with BCH granted the exact same number of coins to users as they possessed on BTC prior the split, many were convinced that this act was simply another means of making money by the companies.

Introducing Roger Ver

Ver is a distinguished and well-known investor as well as a very early adopter of BTC. Over a $1M USD have been poured into several BTC-related emerging projects like Ripple, Zcash and more. Additionally, he operates as the chief executive officer of Bitcoin.com and among the five individuals to launch the BTC Foundation, also a recipient of a million USD investment by Ver.

The investor firmly believes that Bitcoin is the answer to acquiring economic liberty. He has shown unprecedented support for BTC, although currently, his support has shifted towards Bitcoin Cash. During an interview, the investor spoke about Bitcoin and BCH, stating that Bitcoin Cash is what Bitcoin had originally intended to be and stating that BCH will possess a larger market cap, increased trading volumes and more in the foreseeable future and also claims to own most of his wealth as Bitcoin Cash, reaffirming his dedication to the coin.

Is Investing in BCH a good idea?

Despite its fairly new entry to the market, BCH has already made a new for itself and provided enough evidence to back its strength as a cryptocurrency. Right now, BCH is fourth in line among ten cryptocurrencies, following directly in the footsteps of Bitcoin, ETH, and XRP.

Many also stated that BCH was everything that Bitcoin intended to be and continues seeing more support and gaining more fans on a daily basis although as with any cryptocurrency or investment in general, thorough research and perhaps professional consulting is strongly suggested before pouring any of your funds into an investment.

Additionally, Bitcoin Cash is not affected by price drop or gain by BTC, however, Bitcoin does remain as the world’s strongest and most influential cryptocurrency and should the first coin drop in any way, this usually entails a drop among all other coins.

Purchasing BCH

As BCH is a newish coin on the market, the asset is available at a handful of exchanges as not every top digital trading platform has listed the coin just yet. A few exchanges like BitMEX, Kraken, Coinbase, and others offering BCH and fiat trading or BCH and crypto trading.

ShapeShift and Changelly, two separate services, also back BCH and grant users instant transactions and trades between digital currencies. LocalBitcoinCash is a P2P trading platform that enables purchases and sales of Bitcoin Cash directly through physical meetings or through their escrow.

Additionally, as with any cryptocurrency purchased, to store those BCH coins, a cryptocurrency wallet must first be created to store these assets safely and securely. Many types of wallets exist based on a user’s personal needs, offering different levels of protection, transaction speed, mobility and more. In most cases, a cryptocurrency exchange will provide any registered client with an exchange-issued wallet. However, some may opt for third-party storage methods, be it a digital or hard wallet.

Hard wallets are physical carry-on wallets specifically designed to provide the most secure method of cryptocurrency storage due to the fact that all storage is done offline and without an internet connection, it cuts down the chances of a hack or malicious attempt at acquiring a user’s stored assets.

In regards to choosing a wallet, make sure to do the proper research and explore the various types to determine which digital wallet is suited for you. If you’re constantly on the move, a mobile wallet may better suit you.

If you decide on storing large amounts of cryptocurrencies, a hard wallet may be the right choice and if looking to overcome the hassle of carrying a physical storage wallet around, online storage can be accessed from anywhere in the world, although at the cost of robust security due to the excess amount of hackers and malicious software circulating the web at any given time.

Utilizing Bitcoin Cash

Bitcoin Cash has become a center of focus for many digital exchanges that are now taking the necessary steps in listing the crypto on their exchanges to allow users to buy, sell, send and receive the coin.

Additionally, many vendors may possibly hop on board and begin accepting BCH although a large number of vendors do not accept the coin just yet, this including those that accept Bitcoin as a payment method.


10 months ago

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