The world of cryptocurrencies keeps evolving at a great pace; the number of coins known to us is also forever growing . Bitcoin cash is an example of a relatively new coin. It was created in 2017. But what is it, and what can you do with it?
Everything about bitcoin cash
- What is Bitcoin Cash?
- How does bitcoin cash work?
- What can you do with bitcoin cash?
- How do you get bitcoin cash?
- What’s the difference between bitcoin cash and bitcoin?
What is Bitcoin Cash?
Bitcoin cash (BCH) has a lot of similarities to bitcoin. The inception of Bitcoin Cash was on August 1st, 2017, the day it forked from Bitcoin. A hard fork is a split in the blockchain. Bitcoin cash and bitcoin therefore share the same transaction history up until August 1st, 2017, but are now completely separate.
The hard fork which created bitcoin cash is the result of a discussion in the crypto community on the subject of scalability. The scaling problem concerns Bitcoin’s struggle to process the large amount of transactions on the Bitcoin network.
Looking for a sustainable solution, the community was divided in two. Unable to find a compromise, a hard fork was implemented:
- Bitcoin Cash believes larger transaction blocks will solve the scaling problem. When more transactions fit into one block, transactions will be processed faster. The block size of bitcoin is 1MB, bitcoin cash initially increased the block size to 8MB. But since May 15, 2018, the block size has increased more so. The current block size is 32MB. This is the biggest fundamental difference between Bitcoin and Bitcoin Cash.
- Bitcoin sees SegWit as the solution. SegWit is a method to separate the signature information from the transaction block. As a result, the space of the transaction blocks is distributed more efficiently, therefore more transactions fit in one block. SegWit also clears the way for applications such as the Lightning Network and Atomic Swaps.
What can you do with bitcoin cash?
Since bitcoin cash shares the same history with bitcoin, its applications are practically the same. Below you can read the uses of bitcoin cash:
Send and receive
An important feature of bitcoin cash is that you can send and receive directly from person to person (peer-to-peer). There is no need for a trusted third party like a bank or a mediator. This comes in handy when you’d like to transfer value to the other side of the world for example; transaction fees are minimal in comparison. With bitcoin cash and cryptocurrencies in general, you manage your own coins.
Just like bitcoin, you can use bitcoin cash as a payment method. Since bitcoin cash is relatively new, there is little adoption and using bitcoin cash as a payment method is not too common. There are some (web)shops that accept cryptocurrencies like bitcoin cash. They often use a service that automatically transfers cryptocurrencies to currencies like euros or dollars. In any case, it’s a first step towards accepting crypto as an actual payment method.
There are also charities that accept bitcoin cash as donation. For example, EatBCH is a project that fights hunger and chooses to accept only bitcoin cash due to the speed of transactions and low transaction fees.
Last but not least, bitcoin cash is a viable investment opportunity. The price experiences high volatility meaning that there are great fluctuations is short periods of time. Investors see this as an opportunity to make money. Investing in cryptocurrencies is investing in the future. Always make sure to only invest an amount that you can afford to lose.
How do you get bitcoin cash?
You now know what bitcoin cash is an what you can do with it. But where can you get bitcoin cash? After you’ve created a wallet in which you can manage your bitcoin cash, there are several ways to acquire bitcoin cash:
- Purchase bitcoin cash through a broker or an exchange
- Accept bitcoin cash as a payment for your goods or services
- Receive (part of) your salary in bitcoin cash
- Start mining bitcoin cash
Purchasing bitcoin cash
You can send and receive bitcoin cash without an intermediary. However, if you wish to exchange euros for bitcoin cash, you can make use of a cryptocurrency broker like BTC Direct. You can pay by bank transfer or a payment card, after which the bitcoin cash are sent to your wallet.
Accepting bitcoin cash
Bitcoin cash is designed as a payment system. This means it’s possible to accept bitcoin cash when you provide goods or services. The speed of a transaction is a great advantage: if someone pays in bitcoin cash, you will receive it in your digital wallet instantly.
Bitcoin cash salary
Since June 2018, BTC Direct employees receive part of their salary in bitcoin. The employees choose how much of their salary they want to receive in bitcoin. At the end of the month, BTC Direct buys the coins at the current price and sends them to the employees’ digital wallets. Of course, this service could also be applicable to bitcoin cash.
Mining bitcoin cash
A more technical way to obtain bitcoin cash is to mine it. If you mine bitcoin cash, your computer verifies new transactions and collects them in a transaction block. This way you help maintaining the bitcoin cash blockchain, and as a reward you get paid in bitcoin cash. Mining bitcoin cash takes time and effort. It requires extensive knowledge about how the network works and you will have to invest in the right technical equipment.
What’s the difference between bitcoin cash and bitcoin?
Both bitcoin and bitcoin cash aim to be a worldwide accepted decentralised currency, but there are some important technical differences.
|SegWit, Lightning Network
|Increased block size
|Soon to be implemented using Rootstock
|Proof of Work, SHA-256
|Proof of Work, SHA-256
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You’ve done your homework! You now know what bitcoin cash is- it’s a cryptocurrency just like bitcoin. It has a shared transaction history with bitcoin, but it’s not entirely the same. It has a different solution to the scaling problem, namely larger transaction blocks.
You can accept bitcoin cash as payment or mine bitcoin cash, but the easiest way to obtain bitcoin cash is to buy it at a cryptocurrency broker like BTC Direct.