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What’s a Bitcoin Cash(BCH)?
In 2009, the idea of Bitcoin (BTC) is published. Since that year, people have been attracted to cryptocurrencies. Over years, Bitcoin price has risen greatly so, to do transactions a scalability is required and to achieve so, alternative coins (altcoins) were invented. Changes were needed to be happened in Bitcoin. So, in August 2017, the idea of Bitcoin Cash (BCH) pops into heads. Bitcoin Cash is a payment system as well as a store of value. By increasing blockchain’s blocks, Bitcoin Cash becomes more practical than Bitcoin itself. It is also called as a fork of Bitcoin.
Bitcoin Cash forks
In November 2018, another update occurred, it adds another fork called Bitcoin Cash ABC and Bitcoin Cash SV.
Bitcoin ABC (Adjustable Blocksize Cap) is created because it was predicted that in 2018 the scales aren’t as good as it should be. Jihan Wu, Bitmain chief, and Roger Ver, Bitcoin Jesus, are the ones supporting the idea of Bitcoin ABC to increase Bitcoin’s block capacity to 32MB.
Bitcoin SV (Satoshi’s Vision) sounds unbelievable to be true. The controversial Craig Wright and billionaire businessman Calvin Ayre wanted to increase Bitcoin Cash block size to 128MB and name it BSV.
Unfortunately, there were lawsuits against crypto industry members that caused BSV to fail. Bitcoin ABC was adopted by miners and is used in most exchanges. Hence there is no need to relive BSV and doing so, means a waste of money on a feature not affecting much.
In November 2020, Bitcoin underwent another fork. Two new blockchains were created, one is called Bitcoin Cash ABC (BCH ABC), the other is Bitcoin Cash Node (BCHN).
Amauri Sechet wanted to write a Coinbase rule to finance the protocol development. According to his rule 8% of Bitcoin Cash in circulation must be redistributed to Bitcoin Cash ABC.
Not all was in favor of Coinbase rule. In contrast, people like Roger Ver said that Coinbase rule is too good to be true. There was no guarantee of its success and all the critics mentioned that the financial support is not warranted.
The disagreement of both groups, led to creating two different parties. As a result of the support of 80% of miners, BCHN became more successful and that means the Coinbase rule doesn’t worth to come true.
Why BCH was created?
Bitcoin was meant to be a currency not a tool for investment. It wasn’t expected to be that widespread and there was a limitation of 1MB block size. These all, caused Bitcoin to be less efficient. Bitcoin Cash was the solution. By increasing the blocks’ size up to 32MB, the transaction process returned to what it’s meant to be.
The average number of transactions each block can handle is 1000 to 1500, yet it wasn’t enough. So, in September 2018, another update was deployed and the number of transactions raised to 25000 for each block.
Number of solutions were proposed For Bitcoin Cash, one of them was Roger Ver which its origins are from Nakamoto’s original vision. To them it was necessary for Bitcoin to afford daily transactions. It puts back Bitcoin in its competition with multinational credit card processing organizations, like Visa. However, Bitcoin is not as safe as credit card processing organizations, it doesn’t cost you a single more penny to process its transactions.
Another solution was Segregated Witness (SegWit). It proposes an idea of storing all the metadata and information in a block.
Bitcoin vs. Bitcoin Cash
Bitcoin Cash is not that far from Bitcoin, there are also some similarities. Both has as arduous algorithm in mining known as Emergency Difficulty Adjustment (EDA), adjusting difficulty for every 2016 block or every two weeks. Both also shares same services, like the services of Bitmain. Bitmain is the largest miner digging cryptocurrencies. They also use a same mechanism to mine. The mechanism they have in common is Proof of Work (PoW).
Using these similarities, miners earn a noticeable profit just by altering their mining techniques. Moreover, Bitcoin Cash makes a small change on its own EDA algorithm, so, the process of mining would be more efficient.
Like Bitcoin itself, BCH is decentralized and every transaction made via your digital wallet has its own unique identifying code. BCH is as safe as Bitcoin thanks to its unique ids. Albeit from your wallet you can be traced and get tricked surprisingly. To avoid so, do following steps to keep your property safe.
Use a VPN to mask your IP address. Never Publish your information. Store your Bitcoin Cash in multiple wallets. Use a mixer for larger transactions.
A history of Bitcoin Cash
In 2010, the blockchain wasn’t as complicated as it is now. Not being complicated means being vulnerable to malicious threats. The average size of a block was 100KB.
To protect the blockchain, the size of a block reached to 1MB and every 10 minutes a new block is generated. Yet it wasn’t granting the desirable safety, it was possible to build an unconfirmed transaction. In order to stop fraud activities, the time required to confirm a single transaction must be raised, this put Bitcoin behind all its governmental competitors. Despite its time consumed, Bitcoin was still the most profitable currency all around the world.
Fixing the time-consuming problem, Bitcoin Core team, the algorithm designers whose algorithms power Bitcoin, faced two options. One suggesting to summarize the data contained in each block, other suggesting to increase block capacity. Even though Bitcoin Unlimited was created which has a flexible block size, it was hacked by anonymous hackers and it forced Bitcoin Core team to doubt their decision.
You can buy BCH from cryptocurrency exchanges. In a post, we have introduced the best cryptocurrency exchanges.
BCH Cash Wallets
Using Bitcoin Cash requires having a digital wallet. There are cold and hot wallets. Hot wallets are also known as online wallets which stores your data in cloud, and cold wallet is a mobile wallet, which is an offline device built just for cryptocurrencies transaction. Further some Bitcoin Cash wallets are mentioned.
- Ledger Nano S (USB Hardware Wallet)
Ledger Nano S & X are both a USB drive that can be connected to any device and function as a wallet. A user-interface software is created called Ledger Live that allows you to add new wallets for different assets. Ledger is not as safe as it should be and it’s something you should be aware of.
- Trezor (USB Hardware Wallet)
Trezor is a better Ledger. It allows users to do their desired exchanges via web interface. Its USB is also come by a Type-C cable so you can connect it easily to your smartphone. The safety of Trezor is not guaranteed because in 2020 it got hacked by Kraken Labs.
- Cool Wallet S
In 2016, Cool Wallet is presented as the first Bluetooth mobile hardware wallet. It supports every fork of Bitcoin Cash and trading is so much easier while using this app.
- Electron Cash
As a Simplified Payment Verification (SPV) wallet, Electron Cash gives allowance to retain control of your private keys by providing a back up with mnemonic seed phrase. Electron Cash is available on Linux, Windows and OS X systems, and there is also an Android app.
TrustWallet is the most popular software among all mentioned. You can trade, exchange or even stake your cryptocurrencies. It supports every kind of cryptocurrency and is known as multi-coin support.