What Is Bitcoin Cash?

Updated by Giuseppe Faraone verified symbol on August 25, 2022

Bitcoin Cash (BCH) is a blockchain and cryptocurrency created through a hard fork. This term refers to a radical change in a blockchain's network protocol, and the result is always a complete split from the blockchain. Part of the Bitcoin community proceeded with that split to Bitcoin in August 2017, resulting in the creation of Bitcoin Cash.

That's why Bitcoin Cash is pretty similar to Bitcoin. The main difference is the larger block size, which has led to better scalability and the ability to process more transactions

This piece will focus on explaining what all of this means, how BCH works, its history, pros and cons, and the future of BCH. Of course, this guide wouldn't be complete if we didn't talk about how you can buy and use Bitcoin cash. 

Brief History of Bitcoin Cash

To talk about the history of BCH, we first need to start with the coin it was forked out of, Bitcoin

The average size of Bitcoin's block was less than 100 KB in 2010, which effectively meant it was vulnerable to attacks. The size was increased and limited to 1 MB to make it more secure, and each block started being mined every 10 minutes. This added an entirely new layer of security and made the system safer, but it also proved to be a burden. 

As Bitcoin became more mainstream, more transactions were made on the network. However, the average time it took for a transaction to be confirmed started rising with the limited block size. Consequently, this led to an increase in fees. 

Due to that, some Bitcoin developers and miners wanted to increase the block size, thus improving the overall scalability of Bitcoin. However, the Bitcoin Core team didn't want this. Arguments were made on both sides, and they couldn't reach a consensus, which led to the hard fork that gave birth to Bitcoin Cash.

Major crypto exchanges first boycotted BCH, but thanks to the support of Bitmain, one of the top exchanges at the time, Bitcoin Cash eventually came into its own and even soared in price in December 2017 when the value reached $4,091. 

However, the funny thing is that Bitcoin Cash itself underwent a fork. This happened in November 2018, when two new cryptocurrencies were created out of BCH — Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision), but we won't go into details here.

What's the Difference Between Bitcoin and Bitcoin Cash? 

Even though Bitcoin Cash was forked out of Bitcoin and still uses most of what Satoshi Nakamoto envisioned for this cryptocurrency, there are still many differences between these two cryptos regarding block sizes, fees, tokens, and more. Here are the main ones that will help you understand BCH better: 

  • Block size — As we've already mentioned, the main difference between the two is the block size. Bitcoin still has its 1 MB maximum, while the block size of BCH is 32 MB. This means that Bitcoin Cash can handle as many as 200 transactions per second, and transaction fees are less than a single penny. Bitcoin's fees are much higher, and it can only handle seven transactions per second. The same is true in crypto casinos and other platforms where you can spend these two cryptocurrencies. 
  • Difficulty adjustment — Both coins use the same SHA-256 hashing scheme, but BCH has a difficulty adjustment algorithm dubbed aserti3-2d that works according to the exponentially moving target principle. The difficulty is cut in half whenever the blocks are two days behind schedule, and it's doubled when they are two days ahead. This ensures stability in block generation even if the price volatility is high. 
  • Smart contract support — Both cryptos didn't initially support smart contracts. However, BCH has eventually changed to allow the usage of smart contract languages, which gave it some more complex functions. Bitcoin hasn't done that, but some work is underway so that DeFi (decentralized finance) services can be added eventually. 
  • Token issuance — To issue tokens on the BTC blockchain, you must use the Omni layer. On the other hand, BCH has created the Simple Ledger Protocol (SLP). It lets developers issue tokens similarly to what they can do on Ethereum
  • Replace-by-fee — BTC has this kind of fee, which means that transactions can be canceled or double-spent as long as they are unconfirmed. BCH doesn't have this, which makes it more secure in this respect. However, transactions are still only effectively (not 100%) irreversible, and Bitcoin Cash is still not as secure as Bitcoin is

Bitcoin Cash Characteristics

When looking into the characteristics of Bitcoin Cash, most people only consider how it differs from BTC, but we still need to look deeper into the crypto itself to see how it really works. With that in mind, let's look at the main characteristics that make Bitcoin Cash what it is. 

Blockchain

Bitcoin Cash was created through a fork of the Bitcoin blockchain, which means that it uses the same blockchain as BTC. Some proponents of Bitcoin suggested changing some rules of the underlying technology to accommodate a larger volume of payments, and the eventual result was an entirely new solution. However, the new coin still kept the same proof-of-work blockchain and only changed other aspects.

Peer-to-Peer Transactions

Bitcoin was initially intended to be a peer-to-peer electronic cash system, using peer-to-peer technology to remain decentralized. However, some users feel that Bitcoin hasn't managed to achieve this. As a result, they created Bitcoin Cash, which has made transactions faster, more reliable, and much cheaper

Block Size

The block size of Bitcoin Cash is 32 MB. Consequently, Bitcoin Cash can process around 200 transactions per second — more than enough in the long run as the network grows. Furthermore, it also means that the transaction fees on the BCH blockchain are pretty low, usually a fraction of a penny. 

Fixed Supply

Bitcoin Cash has a fixed total supply of coins. It's maxed at 21 million, which is something this blockchain has inherited from Bitcoin. At the moment, more than 19 million have been mined.

Token Protocols

Bitcoin Cash supports token protocols, making it easy for developers to create their own projects backed by tokens. Thanks to the Simple Ledger Protocol, this is achieved, which lets you create, issue, and transfer tokens on the BCH network

Bitcoin Cash Blockchain Explained

Before You Buy Bitcoin Cash

Before buying BCH, you first need to get a crypto wallet if you don't already have one. A crypto wallet will let you store your crypto assets safely, and you'll get to transfer them wherever you want, exchange them, and even trade them if the wallet supports the function.

For instance, you'll need a crypto wallet if you want to use your BCH to gamble in an online casino. You need to have one to make any payment with your crypto.

You can choose between several wallets, including web-based, software, mobile, and hardware wallets. Here's a selection of great Bitcoin wallets, of which most work for BCH. 

Once you've chosen your wallet, you'll only need to set it up by registering an account or following the instructions given by the manufacturer, and you'll be ready to go

How to Buy BCH

You can buy Bitcoin Cash in various crypto exchanges that support it. And since it's one of the top cryptocurrencies in the world, most major ones will offer it. Consider using a reputable exchange like Coinbase, Crypto.com, Gemini, Kraken, or others. 

Once you choose a crypto exchange, here's the simple process you'll need to follow to buy your first BCH:

  1. Enter the crypto exchange and proceed to register an account
  2. Follow the instructions by filling in all the necessary personal information, like your name, address, age, etc. 
  3. Verify your account per the exchange's instructions. You'll likely have to provide a copy of a personal document to verify your identity.
  4. Go to the payment section and pick a deposit method. You'll likely get the chance to use a wide range of popular payment options, including bank transfers, credit cards, e-wallets, and more. 
  5. Follow the instructions to deposit fiat currency. Make sure you fund your account with enough money for the BCH you want to purchase and the exchange trading fees
  6. Once you have the funds, find the corresponding pair and buy the desired amount of BCH.

You can also use a crypto ATM, or Bitcoin ATM, as they are commonly known. They are typically made for Bitcoin, but many will let you buy BCH. Still, bear in mind that the fees are higher than on cryptocurrency exchanges.

How to Use BCH

Using BCH is incredibly simple. All you need is your wallet and the BCH address of the person or merchant to whom you're transferring the BCH. Then, you only need to input the address in the corresponding field in your wallet app and send a specific amount of BCH. Alternatively, you can just scan their QR code and confirm the payment


The only problem is finding a merchant who'll accept BCH. As you can already guess, Bitcoin Cash is not as widely used as Bitcoin, so you'll get to spend it on select websites only, typically for traveling and in certain e-commerce stores. You'll also get to use it for gambling since many of the best online gambling sites accept BCH as a deposit and withdrawal method.

Pros and Cons of Bitcoin Cash

You've learned a lot about Bitcoin Cash, its features, similarities to and differences from Bitcoin, and more. To put all this into perspective and help you decide if you want to become one of the many users of BCH, we have compiled a list of its pros and cons. Take a look!

  • Faster transactions
  • Large number of payments per second
  • Very low fees
  • Highly scalable
  • One of the most accessible cryptos on the market
  • Support for advanced smart contracts
  • Fully decentralized
  • Not widely adopted
  • Doesn't have a strong brand like Bitcoin
  • Somewhat less secure than Bitcoin

The Future of Bitcoin Cash

Bitcoin Cash has improved significantly since its creation, and it's certainly gained a footing in the world of crypto. It has benefited from having many similarities to Bitcoin. At the same time, it also offers faster and cheaper transactions than the King of Cryptocurrency. 

However, this doesn't mean that BCH is better than BTC. On the contrary, it hasn't been as widely adopted as Bitcoin and hasn't managed to replace it as its proponents hoped. 

On top of that, Bitcoin Cash is still just one of the many projects fighting to overthrow Bitcoin. What's more, it's not even the best alternative — Litecoin is likely better, as it's a much stronger cryptocurrency that shares many of the same features.

Bitcoin Cash certainly has a future, as it has many advantages that investors and crypto users can enjoy. But, unfortunately, the chances are it will never be as big as many were initially hoping — just one of the most successful cryptocurrency and blockchain projects out there, and that itself should be more than enough. 

FAQ

What is special about BCH?

The special things about BCH are its similarities to Bitcoin and the differences that are actually its advantages over BTC. For example, Bitcoin Cash has a larger block size, which means that each block can support up to 25,000 transactions compared to Bitcoin's maximum of 1,500 transactions.

Should I buy Bitcoin or Bitcoin Cash?

When you look at the price, it's clear that BCH has had a more steady fall, while BTC has had more of a rise. Even though everything can change at any point, Bitcoin is still a better investment. Plus, BTC is more widely used than Bitcoin Cash. 

Can I trust Bitcoin Cash?

Bitcoin Cash has already been on the market for a long time, and it's already proven it's a legitimate project. Besides the fact that it's one of the top cryptocurrencies on the planet, it was also made by the same people who participated in the continued development of Bitcoin.

Is Bitcoin Cash a good investment?

Like all cryptocurrencies, Bitcoin Cash is extremely volatile, so it's an investment you need to consider carefully. It carries similar risks and benefits as other cryptos, but just as the case goes for all investments, whether or not you invest in it is a decision you need to make on your own.

Why does Bitcoin Cash have a lower value than Bitcoin?

It's hard to say, as there are many reasons. However, the main one is that BCH has never really caught on as Bitcoin has. Plus, it's hard to expect a cryptocurrency to reach a higher value than the King of Crypto. The changes made to BCH were simply not enough to get people to choose it instead of BTC. 

How many total BCH are there?

Bitcoin Cash is maxed out at 21 million coins, just like Bitcoin. More than 19 million of them have been mined, or around 91% of the total number. 

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Giuseppe Faraone
Giuseppe Faraone verified symbol Author
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Based in Valencia, Spain, Giuseppe gave up Milan for sunny shores. New licenses, new casinos, new bonuses, new games - there's always something to write about. Being so close to the action in the gambling industry, he's on top of any new developments the minute they come through the door. Aiming to deliver updates and comprehensive information to you, he does his best to thoroughly test out and rate what he reviews.
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