What is Bitcoin Cash – expert advice
Bitcoin Cash is a cryptocurrency designed to provide users with a fast and inexpensive electronic payment system. The coin is an alternative to Bitcoin offering a scaling solution. It is currently one of the largest currencies by market capitalization.
Bitcoin Cash (BCH) cryptocurrency – what is it and why is it needed
Bitcoin Cash (BCH) was the result of a fork of the Bitcoin blockchain. Its appearance is dated August 1, 2017. It uses the same underlying blockchain technology as Bitcoin.
The coin’s creation followed a controversy in the Bitcoin community. A group of influential miners, developers and investors supported a protocol called SegWit2x, which was supposed to be implemented on the network in August 2017. Those who disagreed with this protocol participated in the creation of Bitcoin Cash. Bitcoin Cash proponents believed it was more like the original version of Satoshi Nakamoto.
Bitcoin Cash prefers to directly increase the size of its blocks in order to group more transactions. Bitcoin had 1MB blocks, while Bitcoin Cash increased them to 8MB, and today it is 32MB.
Bitcoin Cash is halved every 210,000 blocks. The goal is to reduce rewards. The latest halving to date occurred on April 8, 2020.
- Unit of value: BCH; coin, mining is possible.
- Bitcoin Cash rate for August 2021 – $ 628.54
- Number of coins: 21 million on time and decreases until about 2148.
- Distribution: On the occasion of the fork of the Bitcoin blockchain on August 1, 2017, on block 478558, BTC holders were credited with BCH up to 1 to 1.
- The remaining BCH (approximately 4 million) is now distributed as a mining reward.
- Consensus rules: Proof of Work.
- Algorithm: SHA-256.
- Trading platforms: Binance, Bitfinex, Bittrex, Coinbase, GDAX and others.
BCH also shares a large number of applications with Bitcoin. It allows you to:
- Send and receive peers without an intermediary, with minimal transaction fees and the ability to manage your own funds.
- Use coins as a means of payment, although very few companies are willing to accept because of its novelty status.
- Buying tokens to store them and reselling them at the right time allows you to achieve capital gains.
- How Bitcoin Cash differs from other cryptocurrencies and their hard forks
Characteristics of the two most important virtual currencies on the market.
|Date of creation||January 3, 2009||August 1, 2017|
|Market capitalization||520 billion euros||7 billion euros|
|Amount in circulation||18.6 million||18.6 million|
|Maximum number of issues||21 million||21 million|
There are other differences as well.
Block size. As Bitcoin becomes more popular, it takes longer to process a transaction. Hence the limitation of the size of each block to 1MB. To increase the size to 2 MB, the SegWit2x protocol was developed.
Bitcoin Cash does not have SegWit and was originally 8MB in block size. This made it possible to process transactions faster. Then the limit was increased to 32 MB and may increase in the future.
Algorithm. The coin has a different algorithm from bitcoin. Duplication between two blockchains is no longer possible. In the event of a fork, Bitcoin Cash, two chains can exist with a minimum gap between them.
Difficulty adjustment. BCH uses an algorithm that allows the blockchain to function normally, even when the number of miners changes. This indicates the stability of the cryptocurrency.
Bitcoin Cash Prospects and How to Mine
Basically, Bitcoin Cash uses the same underlying blockchain technology as Bitcoin. The decentralized network, developed by Satoshi Nakamoto in 2008, consists of many nodes, each of which contains a copy of the complete history of all transactions performed on its network. Thus, every transaction performed, in particular at a peer (peer) node, will be validated by the network prior to registration. Miners receive a reward for each confirmed block.
In order to start mining bitcoin cash you will need:
- Bitcoin Cash wallet.
- Mining software (for example, CGminer or BFGminer).
- Special computer equipment.
You can mine the coin alone or join a pool. Pools do charge operating costs, however.
Bitcoin Cash, based on a proof of work algorithm with SHA-256 function, will require a computer to perform complex calculations. In order to test new blocks, it will have to provide the blockchain with significant computing power, therefore, it is necessary to have the right hardware.
Building mining farms is very expensive and requires electricity. If it is not possible to buy your own mining equipment and install it in a suitable location, you can use the computing power of cloud services.
Unfortunately, there is no real tool for determining the prospects for bitcoin cash, which remains a very volatile asset, but many actively trade it on various platforms.
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