What Is Bitcoin Cash (BCH)? All You Need To Know

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Key Takeaways

  • Bitcoin Cash (BCH) is a cryptocurrency created in 2017 as a spin-off of Bitcoin (BTC). It emerged due to disagreements within the Bitcoin community about the future of Bitcoin’s protocol.
  • Bitcoin Cash shares many similarities with Bitcoin, including its decentralized nature and finite supply. However, they differ in their technical specifications and philosophies.
  • Some merchants use BCH as a payment option due to its lower transaction fees than traditional payment methods.

What Is Bitcoin Cash (BCH)?

Bitcoin Cash (BCH) is a cryptocurrency born from a 2017 split in the original Bitcoin blockchain. The creators of Bitcoin Cash believed that Bitcoin was straying from its initial vision of being a widely used electronic cash system. They aimed to make Bitcoin Cash more scalable and suitable for everyday transactions by increasing the block size on the blockchain, allowing for faster transaction processing and lower fees.

How Does Bitcoin Cash (BCH) Work?

Core Functionalities

Like Bitcoin, BCH facilitates direct individual transactions without intermediaries like banks and centralized entities.

Technical Underpinnings

BCH miners compete to solve complex puzzles to validate transactions and secure the network. They are rewarded in BCH for their efforts.

Additional Points

BCH has undergone further forks, resulting in other cryptocurrencies like Bitcoin Cash ABC (later renamed eCash) and Bitcoin SV (Satoshi Vision).

Bitcoin Cash (BCH) Token And Tokenomics

Tokenomics

BCH functions similarly to Bitcoin, using a proof-of-work (PoW) mining consensus mechanism and having a capped total supply of 21 million coins. However, it differs in several key aspects:

  1. BCH blocks can hold significantly more transactions than Bitcoin blocks, allowing faster transaction processing and potentially lower fees.
  1. BCH adjusts its mining difficulty more frequently than Bitcoin intended to maintain consistent block times.

Token Details

Total Supply 21,000,000 BCH

Circulating Supply 19,685,313 BCH

Current Price $696.85

Market Capitalization $13,657,842,471

This information is current as of April 2nd, 2024, and the token’s price, market value, and available supply may fluctuate.

Distribution

The initial distribution of BCH tokens occurred in August 2017, when all Bitcoin holders received an equal amount of BCH. This means that if you held 1 BTC at the time of the fork, you would have also received 1 BCH.

Since then, new BCH tokens have been created through mining, similar to how new Bitcoins are created. The mining reward for BCH halves roughly every four years, following the same schedule as Bitcoin.

Where Can I Buy Bitcoin Cash (BCH)?

Binance Binance is a major exchange offering a wide range of cryptocurrencies. It offers multiple ways to buy crypto, including credit cards, debit cards, and peer-to-peer (P2P) trading.

Bybit This exchange is known for its derivatives and margin trading features, but you can also use the platform for spot trading.

Coinbase Coinbase is an American-based cryptocurrency exchange that allows you to buy cryptocurrencies using various payment methods, including bank transfers, debit cards, and wire transfers.

Is Bitcoin Cash (BCH) A Good Investment?

Pros

  • Faster and cheaper transactions – BCH boasts significantly lower transaction fees than Bitcoin (BTC), often costing less than a penny. Additionally, it has the potential to process more transactions per second, leading to faster confirmation times.
  • Scalability – BCH addresses Bitcoin’s scalability limitations by increasing the block size. This allows the network to handle more transactions without compromising efficiency.
  • Accessibility – As a well-established cryptocurrency with a lower price point than Bitcoin, BCH is considered more accessible to a wider range of users, particularly in regions with limited financial resources.

Cons

  • Weaker security – BCH’s increased block size comes at the cost of potentially weaker security. Because less mining power is required to verify transactions, the network might be more susceptible to attacks than Bitcoin’s robust security measures.
  • Lower network effect – BCH has a significantly smaller network effect than Bitcoin despite being an established cryptocurrency. This translates to lower adoption by users and merchants, potentially hindering its long-term growth and mainstream usability.
  • Branding challenges – Following the contentious fork from Bitcoin, BCH faced branding difficulties as the community debated which coin would gain wider acceptance.

Final Thoughts

BCH remains a relevant player with a devoted community. Whether it can overcome its challenges and achieve widespread adoption depends on technological advancements, community growth, and how the cryptocurrency landscape evolves. As with any investment, careful research and a measured approach are crucial before considering BCH for your portfolio.

Via: 2Usethebitcoin.com

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