Many of our account holders ask about Bitcoin Cash (BCH), the affordable alternative to Bitcoin, so let’s dive in.
To begin with, Bitcoin Cash (BCH) is quite a controversial player in the crypto arena. In August of 2017, this coin burst onto the scene due to a hard fork from the original Bitcoin blockchain. A hard fork refers to an event where a new blockchain is created from an already existing one. This gives birth to a new blockchain, thus resulting in two different versions of the same cryptocurrency. One of those chains has a longer history, and the other is new with a much shorter history. This is how Bitcoin Cash was created.
But it wasn’t easy for Bitcoin enthusiasts to accept the new crypto created from the hard fork. It was met with plenty of drama and controversy.
The split was partly driven by a desire to address some of the scalability issues of Bitcoin, such as slow transaction processing times and high fees. But others viewed it as a controversial upstart, with detractors claiming that it is a centralized version of Bitcoin that undermines the very principles of decentralization which cryptocurrencies were founded upon. But regardless of where you stand on the issue, its creation has sparked debates about the role of hard forks in the crypto space.
For all you investors, let’s dig a little deeper into the potential of Bitcoin Cash.
Bitcoin and Bitcoin Cash: The Similarities
Bitcoin Cash works similarly to Bitcoin, as it is based on the same blockchain technology. At its core, the blockchain operates as a decentralized database of transactional records on a network.
Therefore, as long as everyone on the network agrees to abide by the blockchain’s database, the transactions on the network can be verified and confirmed by any node or computer connected to that network. This eliminates the need for banks and intermediaries that often do the work of validating transactions.
Like Bitcoin, Bitcoin Cash transactions are processed by miners, who use their computing power to validate transactions and add them to the blockchain. You can think of miners as nothing more than computers connected to the Bitcoin Cash network with the responsibility of validating and confirming transactions.
Each miner on the network gets randomly picked to validate a block of transactions, and once the transactions are confirmed and validated, that miner receives rewards in the form of BCH coins.
Apart from technical aspects such as block size which we’ll discuss in a moment, Bitcoin Cash still retains most of the characteristics of its parent blockchain. You can think of BCH as the cheaper version of Bitcoin. Like Bitcoin, it has a total supply of 21 million coins, but Bitcoin is the more widely adopted cryptocurrency and has a larger user base compared to Bitcoin Cash. However, BCH also has a large and dedicated following and is traded on most crypto exchanges alongside Bitcoin.
Bitcoin and Bitcoin Cash: The Differences
In terms of popularity, Bitcoin (referred to as both XBT and BTC) is currently the most well-known and widely used cryptocurrency, with a market capitalization of $545 billion as of this writing, as compared to around $2.46 billion USD for Bitcoin Cash (BCH). That’s a pretty significant difference.
Moreover, many more businesses and merchants accept Bitcoin as a form of payment compared to BCH.
When it comes to Bitcoin Cash and Bitcoin, there’s one key difference that sets them apart – the block size.
Bitcoin Cash boasts an impressive block size of 32MB, which allows for lightning-fast transaction processing times and lower fees. This is a stark contrast to Bitcoin’s smaller block size of 1.39MB, which can lead to slower transaction times and higher fees.
You might be wondering – why does block size matter? Well, a larger block size enables more transactions to be processed at once, which can help to reduce congestion in the network and keep fees low. This is especially important as cryptocurrencies become more widely adopted and the demand for faster, cheaper transactions increases.
Why Would Anyone Want to Invest in Bitcoin Cash?
Bitcoin Cash offers several benefits that may appeal to different types of crypto investors and traders, but its future is difficult to predict. It depends on various factors such as adoption, technological advancements, regulatory developments and market trends.
A key factor that could impact the future of Bitcoin Cash is adoption, one of the key drivers of the success of any cryptocurrency. BCH’s larger block size allows for faster transaction processing times and lower fees, and this makes BCH a useful option for merchants and online shoppers who need to make quick and low-cost transactions. Bitcoin Cash is also decentralized and borderless, thus making it ideal for sending and receiving money from anywhere in the world without intermediaries.
There are ongoing debates in the cryptocurrency community about the scalability of BCH and its long-term viability. However, if Bitcoin Cash developers can continue to improve its scalability, security, and user experience, it could potentially increase its adoption and value.
Keep in mind, though, that there are many other cryptocurrencies that aim to be a fast and low-cost payment system. If one or more of them become more popular, it could limit the potential of Bitcoin Cash. And of course, there is always the unknown “government regulation” to consider when investing for the long-term. If the government adopts favorable regulations for cryptocurrencies, it could potentially increase their adoption and value, and conversely, if regulations are strict, it could limit growth and adoption.
If governments adopt favorable regulations for cryptocurrencies, it could potentially increase their adoption and value. Conversely, if governments adopt strict regulations, it could limit their growth and adoption.
So, there you have it. On the plus side, Bitcoin Cash’s use case is a good one. Its larger block size allows for faster transaction processing times and lower fees compared to Bitcoin, but adoption is unpredictable for the long term. And it was created as a fork of Bitcoin; therefore, it boasts all the features that make Bitcoin secure and reliable. What’s more, at its current price, it is one of the more affordable coins in the crypto space.
However, while it has a dedicated following and offers some advantages over Bitcoin, it faces stiff competition and possible regulatory challenges.
These are all important factors to consider when weighing the risks of investing in Bitcoin v. Bitcoin Cash, but whether you choose one or both, Coin IRA is here to make the process of establishing and funding your free account as simple and efficient as possible.