Understanding Bitcoin Cash and the differences between this cryptocurrency and Bitcoin will help you choose the right option for your investment strategy.
Bitcoin Cash has become a popular choice for those seeking faster transactions, lower fees, and a scalable network. In recent years, Bitcoin Cash has emerged as one of the cryptocurrencies with the highest growth potential in this market.
Continue reading to learn everything about Bitcoin Cash—from its fundamentals and how it works to the key differences it has with Bitcoin.
What Is Bitcoin Cash?
Bitcoin Cash (BCH) is a cryptocurrency born from a fork of Bitcoin. This means developers used the same base code but created an independent development to improve it. While it shares many functionalities with Bitcoin, it also has distinct characteristics.
The primary goal behind Bitcoin Cash was to create a blockchain with greater capacity, enabling more transactions in less time. This results in lower fees, improved transactional capacity, and better scalability.
Bitcoin Cash traces its origins to 2017 when Bitcoin miners split into two groups. One faction believed that cryptocurrency security required fewer transactions per minute, while the other group—concerned about rising Bitcoin demand—advocated for higher transaction throughput in shorter timeframes.
Historically, Bitcoin has faced challenges with transaction delays and high fees, as highlighted in a CNBC investigation. Bitcoin Cash, though a fork of Bitcoin, aims to address these shortcomings.
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How Does Bitcoin Cash Work?
At its core, Bitcoin Cash functions similarly to Bitcoin but with key differences—primarily in its blockchain.
While Bitcoin has a 1 MB block size limit, Bitcoin Cash increased this limit to 8 MB (later expanded to 32 MB), allowing it to process more transactions per block. This enables Bitcoin Cash to handle up to 61 transactions per second, compared to Bitcoin’s average of 7 transactions per second.
With larger blocks, Bitcoin Cash offers faster confirmation times and lower transaction fees—especially during peak demand, reducing network congestion and delays.
BCH uses the same blockchain technology as Bitcoin but is optimized for scalability and efficiency. Security is maintained via proof-of-work, where miners use computational power to validate transactions.
What Is Bitcoin Cash Used For?
Despite sharing Bitcoin’s name, Bitcoin Cash is an independent cryptocurrency with similar use cases. It functions as a decentralized asset for payments, transactions, investments, and savings.
However, Bitcoin Cash excels with faster transactions and lower fees. Its larger block size supports higher throughput, making it ideal for quick online payments. BCH also serves as a digital store of value.
According to CoinMarketCap, Bitcoin Cash ranks as the 28th-largest cryptocurrency by market cap ($2.2 billion as of this writing). **Its all-time high price reached $3,900 in December 2017**.
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Key Differences Between Bitcoin and Bitcoin Cash
Here are the critical distinctions between Bitcoin Cash and Bitcoin:
- Block Size: Bitcoin’s 1 MB block size limits transactions per block, while Bitcoin Cash’s 32 MB blocks enable greater scalability.
- Transaction Costs: Bitcoin’s smaller blocks lead to higher fees during peak demand. Bitcoin Cash’s larger blocks keep fees low.
- Transfer Speed: Bitcoin Cash processes transactions faster due to its higher block capacity, reducing wait times.
- Market Position: Bitcoin dominates as the leading cryptocurrency, while Bitcoin Cash is optimized for everyday transactions.
FAQs
Is Bitcoin Cash the same as Bitcoin?
No. Bitcoin Cash is a fork of Bitcoin with technical upgrades for speed and cost-efficiency.
What is Bitcoin Cash’s maximum supply?
Like Bitcoin, BCH has a capped supply of 21 million coins.
Where can I buy Bitcoin Cash?
BCH is available on major exchanges like OKX, Binance, and Coinbase.
Why did Bitcoin Cash split from Bitcoin?
The split (hard fork) occurred due to disagreements over scaling solutions. Bitcoin Cash proponents wanted larger blocks to improve transaction capacity.
Can Bitcoin Cash replace Bitcoin?
While BCH offers advantages for payments, Bitcoin remains the dominant store of value in the crypto market.