What on Earth is Bitcoin Cash? A Comprehensive Guide.
These last few months have been well and truly exciting for investors and enthusiasts alike that are involved in the world of crypto investing. With the big coins rallying well above their previous upper supports, bringing billions of dollars worth of capital with them.
Among these cryptos are a number of altcoins, including some forks of Bitcoin. More specifically, digital assets like Litecoin and, even more specifically - Bitcoin Cash.
The latter has managed to hit headlines of more crypto-focused news platforms in the previous years, as it gained its fair share of technologists, maximalists and investors from when it was first established. But as far as hard forks go, what sets it apart? Why was there a compulsion from its developers to actually break off from Bitcoin?
We'll be digging more into these questions right here.
As we've not so covertly alluded to, Bitcoin Cash is one of the (now many) hard forks of Bitcoin. Having been established very recently in the context of other coins out there, the initial theory behind it is actually partly in the name.
Bitcoin Cash intends to offer its community a real use case as a 'true' digital currency. And originated from internal frustration within the Bitcoin community over the rising cost of fees in order to conduct transactions over the BTC network. This eventually came to a head when core developers and members of the community - such as Roger Ver - decided to split off from Bitcoin in July 2017.
The reason this took place was that the team members of Bitcoin Cash sought to adopt Bitcoin Improvement Proposal 91 (BIP 91), which would address the issue of high transaction fees and poor scalability. It does this through increasing the average block size to 8 Megabytes in stark contrast with Bitcoin fixed size of 1 megabyte at the time (before increasing to 2-4MB). What this allows Bitcoin Cash to do is process more transactions and handle more users.
One point of interest to take from the hard fork of Bitcoin was that those that owned BTC at the time the hard fork took place suddenly became owners of the same amount of BCash.
This split from an already well-known cryptocurrency meant that it could easily start trading with very little time. Which is exactly what happened; it hit a number of exchanges as of August 2017 with a starting price of roughly $280.
One of the other things that sets Bitcoin Cash apart is the fact that it hosted its own internal hard fork back in 2018. To be more specific, two development teams within BCash ended up clashing horns over just how best to update Cash's underlying code.
This resulted in both sides ramping up the level of computing power each used, in order to justify their own approach. The computing power 'drag race' was more commonly known at the time as the 'Nakamoto Consensus,' with the winner being the one that generated the highest computing power.
This proved to be a pretty destructive path for these two teams to take: especially if you were an investor. According to Bloomberg, both teams ended up burning through more than $700,000 on a daily basis, which doesn't include the more than $1 million lost in potential investment.
The end result was a hard fork which split into two new blockchains - Bitcoin SV (Satoshi's Vision) and Bitcoin ABC - with Bitcoin Cash remaining standing on its own.