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Bitcoin Cash is a fork of Bitcoin that seeks to solve Bitcoin’s scalability problems. The inventor of Bitcoin envisioned a cryptocurrency that was usable for small day-to-day transactions, but the Bitcoin network has been limited by its small block size. Block size determines the amount of data that can be added to the blockchain with each new block.
Bitcoin’s 1 MB blocks are too small to handle a large number of transactions, so Bitcoin has become a store of value rather than an easily usable currency. Bitcoin Cash is similar to Bitcoin, with each currency having a capped maximum supply of 21 million. Both use a similar proof-of-work (PoW) mining system to mint new coins. However, Bitcoin Cash offers a larger block size limit, so it can handle more transactions in the same amount of time.
Not everyone sees Bitcoin Cash as an improvement to Bitcoin, with some arguing that the larger blocks make mining more difficult without expensive equipment and could lead to big mining operations controlling the currency. Is Bitcoin Cash a good investment? Learn more now with Benginga’s guide.
What Is Bitcoin Cash (BCH)?
BCH is the native asset of the Bitcoin Cash blockchain. Bitcoin Cash seeks to function as a mechanism for peer-to-peer payment and improves upon Bitcoin by offering the potential of increased scalability. Bitcoin Cash is a hard fork of the Bitcoin blockchain.
Those who supported the fork wanted to improve Bitcoin’s scalability and develop a new currency. Bitcoin Cash is now essentially a faster and cheaper version of the Bitcoin network. A scaling testnet for Bitcoin Cash fit a whopping 16.4 million transactions into a single block in early 2021, and the network has at times processed as many as 9,000 transactions per second.
However, those who stood against the fork did so for a variety of reasons. Bitcoin Cash has larger blocks that make it possible to quickly process more transactions; however, this aspect also makes the blocks more difficult to mine.
Many argue that the increase in the required processing power to mine these blocks means that only large mining firms can afford the needed equipment. This change could result in a more centralized currency where only large mining firms have control and smaller miners can’t meaningfully compete.
Additionally, at the time of the fork, those who held Bitcoin were given the equivalent amount in Bitcoin Cash, which was criticized by some to be a scheme to rapidly reward adopters.
Bitcoin Cash was forced into Bitcoin SV and Bitcoin Cash ABC, which rebranded to ECash. Bitcoin SV looks back to the original Bitcoin whitepaper and seeks to eliminate the use of Layer 2 solutions like the Lightning Network.
Bitcoin Cash (BCH) Price
Bitcoin Cash (BCH) shares the same number of total tokens as Bitcoin (BTC), 21 million. As of October 2021, approximately 90% of the 21 million tokens are currently circulating, with the remaining 10% yet to be mined. Mining gets more difficult as time goes on due to a halving schedule.
Bitcoin Cash debuted with an extremely high price when it forked from BTC in 2017. In the recent bull market in 2021, BCH has stayed approximately below the levels it was at in the 2017 bull market.
Bitcoin Cash currently sits in the top 20 coins by market capitalization, which measures the size of a cryptocurrency by multiplying the price of a token by the total number of circulating tokens. While Bitcoin Cash is a major player in the cryptocurrency space, it doesn’t come close to BTC, which it was intended to improve upon.
Bitcoin Cash (BCH) Competition
Bitcoin Cash seeks to be the best evolution of Bitcoin. While BCH offers distinct advantages, BTC remains the largest cryptocurrency by market capitalization. BTC is well known by the general public and is covered heavily in the news media, while BCH has little recognition outside of the cryptocurrency community.
Additionally, BCH competes with even more evolved forks of BTC such as ECash (previously Bitcoin Cash ABC). The ECash (XEC) team claims that the project is combining the core tech behind Bitcoin’s success — the same fixed supply, halving schedule and genesis block — with the latest PoS consensus and protocol governance. By using the Avalanche consensus algorithm, the team believes that decentralized governance can occur without resulting in contentious forks that have wiped large amounts of value out of other projects.
Notably, the XEC team promises to incorporate both PoS and PoW as it continues to improve XEC. This union would ensure that both miners and holders can participate in maintaining the network.
As with many other modern cryptocurrency networks, the eCash network allows anyone to make their own token on the network for an extremely low fee. What is unique about XEC is the incorporation of CashFusion, a privacy protocol that lumps transactions together and creates obfuscation and anonymity among users.
With ECash and other Bitcoin forks continuing to build upon the original technology of BTC, the argument can be made that BCH, while an improvement from BTC, is not the final form of the technology. BCH will continue to see stiff competition from these other forks.
How to Buy BCH Crypto
BCH is among the top 20 cryptocurrencies by market capitalization, so it is available on many major exchanges. Follow Benzinga’s steps to buy Bitcoin Cash crypto.
Step 1: Open an online account
The first step in purchasing BCH is opening an account on a well-regarded cryptocurrency exchange. This process usually involves setting up an email and password. Exchanges usually allow users to enable additional security factors, such as 2-factor authentication. Many U.S.-based exchanges employ Know Your Customer (KYC) standards that verify customer identities and financial profiles.
BTC is offered on Coinbase Global Inc. (NASDAQ: COIN), which features an easy-to-use interface and an extensive selection of currencies.
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Step 2: Buy a wallet
Wallets are hugely important for securing your cryptocurrency as well as being able to send cryptocurrency to other places in the ecosystem. Leaving cryptocurrency on an exchange can be risky; wallets offer a better level of security.
Best Hardware Wallet: Ledger
Hardware wallets store cryptocurrencies offline. The user’s private keys, which are used to authorize transactions, are stored on the Ledger device. This process keeps the keys offline and away from hackers who could access the keys from an online location.
Best Software Wallet: ZenGo
ZenGo is a free mobile application that offers a non-custodial wallet to store private keys. In addition to being a wallet, ZenGo allows users to buy cryptocurrencies in the application.
Step 3: Make your purchase.
On Coinbase’s exchange, search for BCH. When you have located the currency, follow the steps to buy the cryptocurrency directly or exchange another cryptocurrency for it. You can then store the cryptocurrency in your wallet on Coinbase, or you can send the currency to another wallet that is either a software or hardware wallet.
Current Crypto Prices
The total cryptocurrency market capitalization sits around $2 trillion as the cryptocurrency market overall continues to grow in size. Bitcoin continues to command a high price, making a strong recovery from a summertime dip, and a Bitcoin Futures ETF has been approved by the U.S. Securities and Exchange Commission (SEC).
Is BCH a Good Investment?
If you believe that cryptocurrency will continue to grow, then you would also believe that Bitcoin will become less and less usable for typical transactions. If you think that Bitcoin Cash and its workable solution to the scaling problem are the future of peer-to-peer transactions, then Bitcoin Cash is a wise investment choice.