Bitcoin Cash: History And Purpose

Bitcoin developers always knew that they would one day encounter a scaling issue. More specifically the size of transaction blocks, being limited to 1MB. It’s not news that the issue reached its climax with substantial delays in transaction processing and limitations regarding the number of the transaction the network processes. And what do users, miners and developers do on the onset of such a problem? They look for multiple ways for solutions.

Now, such a situation can turn chaotic, everyone trying to find a side to join. Some stay loyal without question and others jump right in the new boat whenever it shows up. But don’t just join any side without understanding well the repercussions. This article tries to paint a picture of the new side of bitcoin and whether it’s worth trying.

What Is Bitcoin Cash?

It’s the new cryptocurrency denoted as BCH. It was created by a group of influential miners, investors, developers and users who didn’t agree to the consensus BIP-91 OR SegWit2x. The group decided to divide the original bitcoin Blockchain and create a new version of the same known as Bitcoin Cash.

According to the definition from its website, bitcoin cash is a peer to peer electronic cash for the internet. The definition goes on and explains that the currency is fully decentralized with no need for a bank nor a trusted third party to operate.

Features And Benefits Of Bitcoin Cash

Apart from some changes to the original bitcoin, bitcoin Cash has some additional features that make the currency more preferable than the original and even others. The changes as you will see might look small and insignificant but the reality is that these small things have sparked a massive debate in the original currency for years.

A new name. The new name with the suffix cash added to it is an appeal to a section of users who believe that bitcoin should be cash like in terms of straightforwardness in exchange and minimal fee. Therefore suffixing cash in addition to bitcoin in a way encourages its usage.

Block size limit increase. This is perhaps the main issue behind the fork. Now, a group of the original bitcoin users, developers and miners have been advocating for a bigger block in BTC. The new divergence means that the block size has definitely been increased in terms of its limit to 8MB.

A replay and wipeout protection. After the split, both chains now have a well thought out replay and wipeout protection plans. The two currencies can thereafter coexist with each other peacefully.

A new transaction type. Bitcoin cash also introduced a new transaction type as part of the replay protection technology. The new transaction has benefits like input value signing for improved hardware security and the elimination of the quadratic hashing problem.

Will It Be Dependent On Bitcoin’s Price?

No, bitcoin cash is independent and its price is also independent of the original bitcoin. However, bitcoin is still the dominant currency and when it goes up or down, other cryptocurrencies including bitcoin cash may follow the trend.