What Is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency created following a hard fork from the original Bitcoin.
As the popularity of digital currencies like Bitcoin increased and demand grew, some members of the Bitcoin network became more and more concerned about the currency’s capacity to handle increasing levels of transactions.
To prevent transactions from becoming slower and costlier to process they wanted to make changes to the Blockchain code.
Their solution was to increase the size of the blocks on which transactions are processed and stored within the Blockchain. The proposition was a minimum block size of 8Mb, compared to the original coding of 1Mb.
This caused a split of opinion and led to a fork from Bitcoin and the launch of Bitcoin Cash in August 2017. Bitcoin Cash is still a peer-to-peer decentralised cryptocurrency and retains much of the technology and philosophy of Bitcoin.
However, it was designed to increase transaction capacity and improve scalability to meet the increased demand for digital currencies. Those ‘miners’ who held Bitcoin at the time of the fork were entitled to the equivalent value of Bitcoin Cash.
How Does Bitcoin Cash Work?
Bitcoin Cash retains a proof-of -work system to validate and add transactions to the Blockchain. As with Bitcoin this requires ‘miners’ using computers to solve mathematical puzzles to win the chance to update the public ledger.
Their reward for solving the puzzle is to be rewarded with Bitcoin Cash. Therefore the incentive to participate increases when the price of Bitcoin Cash increases in what is already a very competitive field.
As Bitcoin retains the bulk of the cryptocurrency market with a price which is considerably higher, mining for Bitcoin Cash is currently a less profitable affair.
Apart from block size the other main difference between the currencies is Bitcoin Cash does not use the Segregated Witness (SegWit) protocol to increase transactions, with transaction digital signatures validated on the Blockchain itself and not hidden away on an extended block in the chain.
For Bitcoin Cash the purpose of the fork was to be proactive and meet the rising demand in digital currencies and offer a currency which was faster and cheaper to use.
What Are the Use Cases for Bitcoin Cash?
To this end its primary aim of use is to challenge the major transaction processing organisations such as Visa and PayPal.
People using the main processing companies can expect to pay comparatively high transaction fees, which Bitcoin Cash feel they can significantly reduce for their users.
However, Bitcoin Cash is still a relatively new currency which is gradually making its mark and attracting the interest of global investors.
Bitcoin Cash is now accepted by Bit Pay as a legal form of payment. Bit Pay was originally set up to help merchants accept Bitcoin, but this has now been extended to Bitcoin Cash.
Another noteworthy addition to companies accepting payment by Bitcoin Cash is Microsoft. Indeed there are now a number of stores and online sites across different industries such as Seek, Vultr and Coinify who accept Bitcoin Cash as payment.