Bitcoin Cash (BCH): There’s More Than One Bitcoin?
Bitcoin Cash was created as a practical cryptocurrency for everyday transactions, inspired by a desire to increase Bitcoin’s scalability.
Bitcoin (BTC) is a new technology. Despite its 2009 birth, Bitcoin has already generated a slew of other currencies (altcoins). One of the first altcoins, Bitcoin Cash (BCH), is somewhat controversially named after Bitcoin. But what is Bitcoin Cash (BCH)? Bitcoin Cash, which is based on the original Bitcoin code, makes significant technological changes that have far-reaching effects. BCH was created in response to frustrations with Bitcoin’s scaling issues and was intended to be a more practical cryptocurrency for everyday blockchain transactions. Its larger block size encourages use as a payment system rather than a store of value because it allows for speedier processing.
- Bitcoin Hard Fork: What Is Bitcoin Cash?
- Why Create a Second Bitcoin?
- The Controversy: Bitcoin vs. Bitcoin Cash
Bitcoin Hard Fork: What Is Bitcoin Cash?
The Bitcoin (BTC) system was created in 2008, and the network became live in January 2009 with the mining of the first block on the Bitcoin blockchain, known as the genesis block. The Bitcoin community has evolved from a tiny group of computer scientists and cryptographers to one that is increasingly mainstream. As Bitcoin’s popularity expanded, diverse perspectives and techniques for dealing with it emerged among its core developers.
During the early days of Bitcoin, the network was more than capable of handling the transaction demand of a small group of developers. However, as the network’s popularity rose, it became clogged with an increasing amount of transactions, slowing their processing time. The fear was that if nothing was done, Bitcoin transactions might eventually take days or weeks to settle, necessitating users paying greater fees to speed up the process. Bitcoin’s scalability problem arose from the fact that neither situation was perfect.
Two sides presented solutions: those who wanted to expand block size and those who wanted to maintain block size small. The block size refers to the amount of data that each block in a blockchain can have. Bitcoin’s maximum block size is 1MB, which is not a lot of data by most technological standards. Of doubt, there were advantages and disadvantages on both sides of the discussion, but none were convincing enough to bring the development community together.
A hard fork of the original Bitcoin protocol happened in August 2017 as a result of the core developers’ inability to agree on the best course of action. Developers make an upgrade to the original blockchain in both soft and hard forks, which not all nodes accept. When a hard fork occurs, the nodes that accept the update are moved to a new blockchain, and the currencies on the new blockchain are distinct and distinct from the original coins. As a result, Bitcoin Cash (BCH) was established, complete with its own blockchain and BCH currency.
Why Create a Second Bitcoin?
The scalability, functionality, widespread adoption, and eventual viability of a cryptocurrency are all dependent on transaction speed. Bitcoin can process seven transactions per second on average, whereas Bitcoin Cash can process 116 transactions per second. To put things in perspective, Visa handles 24,000 transactions each second. Seven transactions per second, in the opinion of BCH supporters, was not going to cut it in the long run.
The fundamental motivation for the Bitcoin Cash fork was to improve the amount of transactions that could be processed per second, as seen by BCH’s larger block size. Furthermore, developers took steps to limit the overall quantity of data that had to be checked in each transaction, speeding up the process even more.
The Controversy: Bitcoin vs. Bitcoin Cash
The Bitcoin Cash fork sparked a lot of debate. Early Bitcoin supporters were enthusiastic about the concept and believed in its long-term viability. Both Bitcoin and Bitcoin Cash supporters believed that their path ahead was the best, hence the hard fork was the only way for both factions to move forward.
BTC supporters said that BCH’s larger blocks will make running a node more energy-intensive and expensive. More processing power requirements might conceivably make it difficult for individuals to operate nodes and maintain the network’s decentralized character. As a result, centralized institutions may be able to assume control of the network.
The debate between Bitcoin and Bitcoin Cash is sparked by the latter’s appropriation of the Bitcoin name, in addition to profound ideological differences between the two camps. Despite the fact that BCH is essentially identical to BTC, many people believe that using the Bitcoin name is insulting.
Furthermore, once Satoshi Nakamoto, the founder of Bitcoin, vanished from the Bitcoin community, many speculated on what Satoshi’s initial goal for Bitcoin was. Satoshi’s original purpose, according to various interpretations of his vision, was either more linked with BTC or BCH. When prominent members of the bitcoin community make statements on the subject, the debate becomes even more heated.
For example, “Bitcoin Cash is Bitcoin,” according to Craig Wright (who claims to be Satoshi). Wright’s backing of BCH has stoked the fires on both sides of the BTC vs. BCH argument, with many BCH supporters continuing to distance themselves from Wright as a problematic character with a history of alleged fraud.
Despite the fact that the two cryptocurrencies are diametrically opposed, they serve largely different purposes and share simply a name. They can be used in a variety of ways. BTC is a type of “digital gold” that acts as a store of value, whereas BCH is a type of “digital cash” that seeks to be used as a payment mechanism. Many users are aware of this and are committed to the continued development of both BTC and BCH.