What is Bitcoin Cash(BCH)?
Bitcoin Cash(BCH) is a currency created from Bitcoin Fork in August 2017. Bitcoin Cash has increased block size, allowed more transactions to be processed, and improved scalability. Simply put, some miners and developers launched what is known as a hard fork and created a new currency called BCH. One of the problems with the Bitcoin blockchain is its scalability. This means that as Bitcoin becomes more popular, transaction speeds decrease and transactions increase.
Therefore, this currency is not suitable for daily payments. Activists and bitcoin enthusiasts were divided into two groups. Some of them felt that they needed to use alternatives like Segwit to speed up transactions and reduce fees. SegWit stores transaction information or metadata in a block. Typically, all details of a transaction are stored in a block. Another group of bitcoin fans made changes to the bitcoin rules, which eventually led to the creation of Bitcoin cash.
Bitcoin vs. Bitcoin cash
These two currencies are structurally different from each other. In the following, we will discuss the difference between Bitcoin and bitcoin cash.
-Differences in block size and transaction fees
The maximum size of a Bitcoin Cash block is 8 MB, which is larger than the size of a bitcoin block. Bitcoin performs 3-7 transactions per second, while Bitcoin Cash can process about 200 transactions per second. This reduces the cost of each transaction and improves the speed and reliability of the transaction. Bitcoin cash transactions usually cost less than a penny. For comparison, average Bitcoin (BTC) transaction costs have been in the $ 1 range since 2020.
-Smart contract support
Bitcoin cash developers can use smart contract languages such as Cashscript (a programming language). This allows for “decentralized financial” schemes such as the synthetic derivatives trade. Other uses include private payments with tools such as CashShuffle and CashFusion.
The digital signature design allows for a more sophisticated signature. Transactions that accept Schnorr digital signatures require less space and less cost. Although currently supported by the Bitcoin Cash Protocol, digital signatures are not yet widely accepted by wallet providers. Once digital signature approval is widely accepted, it is possible to increase network privacy by improving the usability of passwords.
Who developed Bitcoin cash?
Roger Ver is actually the one who created Bitcoin cash and specifically supported it. He is one of the first Bitcoin investors and CEO of Bitcoin.com. Roger Ware is also known as one of the five creators of the Bitcoin Foundation. Roger Keith Ver was born on January 27, 1979, in San Jose, California. He attended Valley Christian High School, a private Christian high school. Ver then entered the University of DeAnza, but after a year of study, he left the university and pursued his business interests. Prior to his interest in currencies and blockchain technology, he was one of the most successful entrepreneurs. For example, he founded Agilestar, which became a world leader in optical receivers.
In October 2017, Roger announced support for Bitcoin Cash, along with other members of the crypto community. This new currency uses the same bitcoin blockchain but its block is 8 times larger. Initially, Roger supported the SegWit2x Bitcoin hard fork. However, Roger told the world that the Bitcoin Cash hard fork also solved the problems of SegWit2x. Therefore, he started supporting Bitcoin Cash.
What are the advantages of Bitcoin Cash over Bitcoin?
Bitcoin Cash has technical differences and is cheaper to use than Bitcoin. Specifically, the block size of Bitcoin Cash is 32MB, while the bitcoin block size is 1 MB. This means that the Bitcoin Cash blockchain is able to handle many more transactions, and this feature keeps costs low. In contrast, the bitcoin blockchain fills up during high activity and transactions have to wait in line, which slows down transfer time and raises costs. In short, BCH is much faster and cheaper than BTC.
What are the disadvantages of Bitcoin Cash over Bitcoin?
The main technical drawback of larger blocks is that they are harder for miners to grasp, and this can lead to problems such as incorrectly separating the blockchain into multiple branches. However, this is an advantage for miners who are able to receive them, and as a result the risk of blockchain concentration increases.
Fortunately, this is more theoretically true for this currency, as 32 MB is not big enough to cause this kind of problem (Bitcoin Cash has not yet fully utilized its block size). The main reason Bitcoin is superior to Bitcoin Cash is that Bitcoin is much more valuable and therefore more people are using it. In cryptocurrency, the functional value of a coin is very important as it determines the security and reliability of the network.
Is an increase in the price of a Bitcoin Cash the same as an increase in the price of a bitcoin?
Analysts have proposed two theories for the higher value of bitcoin compared to Bitcoin Cash:
Economic theory: This theory holds that higher costs and slower transfers are actually beneficial in maintaining the value of assets. These high costs and slow transfers encourage people to keep their bitcoins instead of spending, and this has reduced the total number of bitcoins on the market.
Social theory: This theory holds that as bitcoin is much more valuable, more people are attracted to it. BTC also has the original name of Bitcoin, which has led to an increase in brand awareness.
Bitcoin Cash is a currency created in August 2017 from Bitcoin Fork. Bitcoin Cash has increased block size compared to Bitcoin and allows more transactions to be processed. Bitcoin Cash has proven to be a good investment option by being among the top 10 currencies in the currency table. There are many similarities between bitcoin and Bitcoin Cash.
Both use a proof-of-work mechanism. So new coins can be mined. In addition, they both use the same hash algorithm (SHA-256). In addition to these points, we tried to talk about the details of this currency during the article, including its history, how it works, its strengths and weaknesses, as well as its differences with Bitcoin.
Source: The Pipsafe Team