Bitcoin Cash
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In the digital age, cryptocurrencies have stirred a revolution in the economic world, with Bitcoin leading the pack. The cryptocurrency Bitcoin Cash (BTC) was created in 2017 as one of the first Bitcoin spin-offs. In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV.
Launched in August 2017, Bitcoin Cash was the brainchild of Bitcoin miners and developers concerned about the future of the Bitcoin cryptocurrency and its ability to scale effectively.
The advent of Bitcoin Cash was an important milestone in the evolution of digital currencies, as this cryptocurrency was created as an appealing alternative for those who want to use cryptocurrencies but are concerned about Bitcoin´s scalability and transaction fees.
With its larger block size and lower transaction fees, Bitcoin Cash presents a viable solution to some of the scaling issues that some other cryptocurrencies, including Bitcoin, face. The challenge, however, lies in convincing more vendors and platforms to adopt Bitcoin Cash, which would further cement its presence in the market.
In the ever-evolving landscape of cryptocurrencies, Bitcoin Cash is poised to play a significant role. It’s a promising alternative for anyone interested in the benefits of cryptocurrencies, with quicker transactions and lower fees. The future of Bitcoin Cash looks bright as it continues to evolve and adapt to market needs.
Creation and early trading
The fork that created Bitcoin Cash took place on 1 August, 2017. At the time, anyone owning Bitcoin came into possession of the same number of Bitcoin Cash units.
On 1 August, 2017, Bitcoin was trading at about 2,700 USD, and Bitcoin Cash commenced trading at around 240 USD. After reaching an intraday high of 4,355.62 USD on 20 December 2017, Bitcoin Cash began to decline, reaching 519.12 on 23 August 2018.
Understanding Bitcoin Cash
Bitcoin Cash is an offshoot of the original Bitcoin blockchain, created through a process known as ‘forking.’ This process splits the existing software into two, resulting in two versions of the blockchain. The resulting cryptocurrency, Bitcoin Cash, was created to handle more transactions than Bitcoin, offering both faster and more flexible transactions.
Just as with many other cryptocurrencies, the long-term success of Bitcoin Cash will ultimately depend on its adoption as a medium of exchange rather than chiefly being used for exchange-rate speculation. With its promising user-friendly features, Bitcoin Cash is certainly worth watching for anyone curious about the future of cryptocurrencies.
Short Facts about Bitcoin Cash
Implementation: Bitcoin Unlimited
Ledger start: 3 January, 2009
Split from: Bitcoin
Split ratio: 1 to 1
Abbreviation / code: BCH
Precision: 10−8
Timestamping scheme: Proof-of-work (partial hash inversion)
Hash function: SHA-256
Block reward: 6.25 BCH
Block time: 10 minutes
Issuance schedule: Initially BCH 50 per block, halved every 210,000 blocks. The supply will approach but never reach 21 million BCH. Issuance will permanently halt at 20,999,999.9769.
The Value of Bitcoin Cash
The value of Bitcoin Cash fluctuates based on market conditions. One of the factors that have influenced its value significantly is its acceptance among users and vendors. Many platforms and merchants now accept Bitcoin Cash, which has helped its growth and has established it as a strong contender in the cryptocurrency market. Bitcoin Cash payments are supported by payment service providers such as BitPay, Coinify and GoCoin.
Bitcoin Cash vs. Bitcoin: The Key Differences
One might wonder, why was there a need for Bitcoin Cash when we already had Bitcoin? Simply put, Bitcoin Cash was created in response to the limitations of Bitcoin. The major differences lie in their block size. Bitcoin has a 1MB block size limit, while Bitcoin Cash offers a much larger block size of 8MB, enabling faster transaction times.
Also, Bitcoin Cash does away with the Segregated Witness protocol, a feature implemented in Bitcoin to increase the number of transactions a block can carry. This fundamental difference between Bitcoin and Bitcoin Cash creates room for more transactions and lowers potential fees.
The EDA
Bitcoin and Bitcoin Cash use the same proof-of-work algorithm to timestamp every new block, and they both target a new block to be generated eveyr 10 minutes on average. To keep the average block generation time at 10 minutes, both use an algorithm that will adjust the mining difficulty parametre – the difficulty adjustment algorithm (DAA). If mining power increases, the DAA will increase mining difficulty and vice versa.
Originally, both Bitcoin and Bitcoin Cash only used DAA, and the mining difficulty for both was adjusted every 2016 blocks. The two cryptocurrencies became more different from each other on 1 August, 2017, when Bitcoin Cash added an Emergency Difficulty Adjustment (EDA) algorithm to work alongside the original DAA in the Bitcoin Cash system. This EDA for Bitcoin Cash was designed to decrease the mining difficulty of Bitcoin Cash by 20% if the time difference between 6 successive blocks was greater than 12 hours. After a while, it became clear that the EDA was causing instabilities in the Bitcoin Cash system, and soon Bitcoin Cash was thousands of blocks ahead of Bitcoin. To remedy the problem, the Bitcoin Cash DAA was altered and the EDA was removed on 13 November, 2017. The new DAA adjusts the mining difficulty after each block, and to calculate the difficulty for a new block, it utilizes a moving window of the most recent 144 blocks.
The creation of Bitcoin SV
Abbreviation / code: BSV
Project fork of: Bitcoin Cash
Timestamping scheme: Proof-of-work
Block reward: 6.25 BSV
Block time: 10 minutes
On 15 November, 2018, a hard fork chain split of Bitcoin Cash occured between two rival groups called Bitcoin Cash and Bitcoin SV. Bitcoin SV is short for Bitcoin Satoshi Vision. The split was the result of a ”civil war” within the Bitcoin Cash community.
On 14 November, 2018, Bitcoin Cash was trading at roughly 425 USD.
On 15 November, 2018, Bitcoin Cash dropped to circa 289 USD, and Bitcoin SV commenced trading at around 96 USD.
Background
Part of the Bitcoin Cash community, including entrepreneur Roger Ver and Jihan Wu of Bitmain, was lobbying for the activation of the software Bitcoin ABC (Adjustable Blocksize Cap) which would lock the blocksize for Bitcoin Cash at 32 MB. They ran into significant opposition from a group spearheaded by computer scientist Craig Steven Wright and billionaire Calvin Ayre. The rift lead to Wright and Ayre launching a competing software version, the Bitcoin SV, where the block size cap is 128 MB.