Bitcoin Cash – How Is it Different from Bitcoin?
Cryptocurrency is a decentralized asset that might be the future of money – or it might be a fad. That’s what everyone thought up until 2017, and the Bitcoin price reached $20,000 per coin. Suddenly, the attention of the world was on the crypto space, and everyone wanted a piece of the next ICO.
The 1st August 2017 was the date of the first Bitcoin “fork,” launching a new cryptocurrency off the back of BTC. Bitcoin Cash (BCH) was the first alternative of Bitcoin, where developers tried to improve the utility of Bitcoin for commerce.
Some 3-years later, and Bitcoin Cash is still going strong, with almost every exchange offering it on their platform. In this review, we’ll unpack everything you need to know about this alternative asset.
What is Bitcoin Cash?
Bitcoin Cash came out of the need to speed up transaction times on the Blockchain. The Blockchain is the global interlinked ledger that records every Bitcoin transaction. Unfortunately, inefficiencies in the Blockchain were starting to create chokepoints in the protocol that were beginning to cause problems with transactions.
In some cases, mining fees for sending Bitcoin in early 2017 were through the roof, making it impractical for anyone to use the currency. In December of 2017, the cryptocurrency reached a peak in transaction fees of $55. That’s a staggering cost of using Bitcoin. On top of that, problems with transaction times also started to cause issues. Some transactions were taking as long as 2-days to confirm on the Blockchain in 2017.
In later 2017, it was clear that Bitcoin was running into some serious issues.
To compensate, developers decided to create a new Bitcoin product born out of the original protocol. Bitcoin Cash was to feature 8MB blocks over Bitcoin Originals 1MB blocks. As a result, both transaction costs and timeframes would improve dramatically.
Today, BTC transaction fees are around $1, and it averages around 4-hours for a transaction to process. That’s partially thanks to the implementation of the Bitcoin Cash protocol that cleared up plenty of the problems affecting the leader of the cryptocurrency sector.
How Does It Work?
Bitcoin Cash makes it cheaper to send transaction s because it works in “satoshis-per-byte.” Using this method allows the accurate measurement of transaction fees in satoshis, not in US Dollars. Bitcoin is the world’s most popular crypto, and due to the high demand, but small block size, there is always a queue waiting in the transaction line.
Transaction times would vary depending on the time of the week or the time of the day. You could be waiting for as long as a few days for your crypto transaction to clear. Think of it like a customs line trying to get into the United States. There are hundreds of people waiting for hours to gain access to the country.
With Bitcoin Cash, you have a bigger block size, which accommodates more transactions. Therefore, you don’t have the same problem as the border crossing issue above. In this case, the borders are down., and traffic flows freely in an unregulated environment.
You get transaction confirmations as fast as a few minutes, and the costs are significantly cheaper.
What are the Features of Bitcoin Cash?
The invention of Bitcoin Cash was to help make changes in the crypto-ecosystem affecting the utility of Bitcoin. People didn’t enjoy the long transaction times and expensive transaction fees associated with moving money around using the Blockchain. As a result, Bitcoin Cash was the saving grace of the currency, resolving all the utility challenges facing Bitcoin at the time.
On its launch, proponents of Bitcoin Cash stated that Bitcoin was doomed and that BCH was now the future of crypto. However, it turns out that developers eventually created a solution that improved transaction times and costs dramatically for BTC.
Therefore, you might say that BCH is not outdated and obsolete because the solution that it offered no longer has a problem to solve.
What are the Advantages and Disadvantages of Bitcoin Cash?
With Bitcoin Cash, you get a better protocol. It’s a faster and more efficient way to transact on the Blockchain. If you’re buying Bitcoin or other cryptos for transactional value, then you’ll want to spend them with the platform that offers you the lowest fees and the fastest confirmation times.
It was those principles of speed and efficiency that made BCH a viable alternative to BTC on its launch. However, it seems that the market didn’t agree. It turns out that after development teams fixed the issues with transaction times and the high costs of sending BTC to other wallets, there was no flight from BTC at all.
How do I Buy Bitcoin Cash?
You can buy Bitcoin Cash on several platforms, including the large US-facing brokers like Coinbase and Kraken. There are BCH markets on almost all exchanges, and it’s the 5th largest cryptocurrency by market cap, with $4.46-billion, and daily trading volumes approaching $3.5-billion.
US-facing exchanges will allow you to make deposits for your BCH using credit cards or with wire or bank transfers. Please note that credit card deposits will incur additional charges on these platforms.
What are the Recommended Exchanges for Trading Bitcoin Cash?
The top exchanges for trading Bitcoin Cash include Kraken, Binance (non-US residents), Bitfinex, CEX.io, and many more.