Bitcoin Cash It is a digital currency and a blockchain-based payment network. This digital currency is actually a fork of Bitcoin, which was created in 2017 following a disagreement between Bitcoin activists.
In the rest of this article, we explain that What is Bitcoin Cash? And why did it come about? First, we will review the story of the origin of Bitcoin Cash and you will get acquainted with the concept of fork. Then we explain the differences between Bitcoin Cash and Bitcoin. Finally, after looking at the price history of this digital currency, we will introduce some popular wallets to store it and teach you how to buy Bitcoin Cash.
What is Bitcoin Cash?
Bitcoin Cash (Bitcoin Cash with the symbol BCH) is a digital currency that was introduced in 2017 and in block number 478,559 as hard fork Or there was a fork of Bitcoin. So despite its name being similar to Bitcoin, Bitcoin Cash is one Altcoin It is independent. The purpose of Bitcoin Cash Increasing block size Bitcoin from 1 MB To 32 MB Was. In November 2018, another fork of Bitcoin took place, which led to the birth of Bitcoin SV.
From the first days of Bitcoin's emergence until today, the speed and transaction fees of this digital currency have been one of the most challenging discussions in this field. Bitcoin cannot process more than seven transactions per second, which limits its use for everyday payments.
A group believes that in order to increase the speed of transactions and reduce fees, it is not necessary to change Bitcoin and alternative solutions (such as Lightning or Segwit) should be used.
Another group believes that the main purpose of Bitcoin is to be used as a money and payment method, and to achieve this goal, alternative solutions are useless. Therefore, according to the opinion of the second group, a series of restrictive laws of Bitcoin should be changed to solve the problem of transaction speed and fees. Some of the followers of the second thought took Bitcoin Cash out of the heart of Bitcoin.
Bitcoin Cash introduces itself as “peer-to-peer electronic cash”; Exactly what was mentioned in the title of the Bitcoin Idea article (white paper). Cash means cash in English. In other words, BCH wants to be a Bitcoin that can be used as money by increasing the speed of transactions.
As we said, this digital currency is a fork of Bitcoin. On August 1, 2017, with the creation of block number 478,559 in the Bitcoin blockchain, a new blockchain was created and thus, Bitcoin Cash was officially born. In the following, you will learn more about the meaning of fork.
The main reason for the disagreement in the Bitcoin community that led to the creation of Bitcoin Cash was a fundamental issue: the problem of scalability, or the problem of the slowness of transactions and the increase of their fees over time in the Bitcoin network. By increasing the block size up to a maximum of 32 MB, which is limited to 1 MB in Bitcoin, Bitcoin Cash enables the processing of more transactions.
Apart from ideological differences and block size, there are many similarities between Bitcoin and Bitcoin Cash. Both of them use the Proof of Work (PoW) or mining consensus mechanism to verify transactions and generate new coins, and the total number of units of both is limited to 21 million.
Bitcoin Cash itself was forked in November 2018 and Bitcoin SV was born from it. In the following, you will also read about Bitcoin SV.
Genesis story
Supporters of Bitcoin Cash believe that this digital currency follows the original goals of Bitcoin. According to them, based on the plan of Satoshi Nakamoto, the anonymous creator of Bitcoin, this digital currency network was supposed to be peer-to-peer for financial exchanges.
After about five years have passed since the creation of Bitcoin, with the increase in acceptance of this digital currency among the public and as a result of its price increase, Bitcoin became more of a tool for storing value instead of a currency.
Due to the increase in the number of transactions, it was in 2015 that the Bitcoin blockchain was getting crowded and the problem of scalability became apparent. Bitcoin's block size limit had caused many transactions to wait in the queue for confirmation. Because the blocks could not increase their volume at the same time as the number of transactions grew.
In Bitcoin, the size of blocks is limited to 1 megabyte, and taking into account solutions like Segwit, we can say that each Bitcoin block contains a maximum of about 4,000 transactions. Since a block is created every ten minutes, the Bitcoin network itself cannot process more than 7 transactions per second.
A group of influential people who have been widely active in Bitcoin since the beginning, sought to improve the current situation by proposing to increase the block size from 8 to 32 MB; Because by increasing the block size, the network can process more transactions per second.
The average number of transactions per Bitcoin block is between 1,000 and 1,500. This is despite the fact that during the test conducted in September 2018 on the Bitcoin Cash blockchain, each block of this blockchain is able to record more than 25,000 transactions.
Fork: An option to resolve disputes
As you probably know, a blockchain-based protocol cannot be altered. So if it needs to be updated, or if some people are unhappy with the network, what is the solution? If there is a disagreement about a public blockchain, there are no more than two ways: either a soft fork or a hard fork.
Read more: What is a fork? Simple definition of hard fork, soft fork and their effect on the price
Supporters of the fork
People like Haipo Yang, Roger Ver and Wu Jihan were among the early supporters of Bitcoin. These were the ones who, according to themselves, wanted to adhere to Satoshi Nakamoto's ideal of using Bitcoin as payment, and for this reason, they proposed increasing the size of the Bitcoin block.
But they were never able to bring the entire Bitcoin community with them. Bitcoin proponents believed that with the increase in block size, the volume of the blockchain would increase, and thus many network operators would not be able to continue to store transactions, and this would endanger decentralization. Finally, on August 1, 2017, after a long struggle, the famous Bitcoin hard fork happened and the Bitcoin blockchain split into two parts: Bitcoin and Bitcoin Cash.
After the hard fork, all Bitcoin holders received Bitcoin Cash equal to their Bitcoin holdings and could operate on either of the two networks as they chose.
Fork in fork
About a year after the birth of Bitcoin Cash, in the community of this digital currency, there was a dispute about the goals and block size, which finally caused Bitcoin Cash to undergo a hard fork.
On November 15, 2018, this digital currency was fork and turned into two competing versions, Bitcoin Cash ABC and Bitcoin SV. This split occurred due to disagreement and internal dispute between Roger Ware and Craig Wright along with other figures related to Bitcoin Cash.
The term ABC in Bitcoin Cash ABC, which was also supported by Roger Ware and Jihan Wu, stands for “Adjustable Blocksize Cap” and keeps the block size up to 32 MB.
But the opposite front, led by Craig Wright, presented the software version of Bitcoin SV, which is shortened to “Satoshi Vision”. Craig Wright has long identified himself as Satoshi Nakamoto, the creator of Bitcoin, and claims that Bitcoin's developers have diverted it from its original purpose. Bitcoin SV has increased the block size limit to 128 MB.
The Bitcoin Cash we currently know and call is Bitcoin Cash ABC, which uses the original Bitcoin Cash client.
Similarities and differences between Bitcoin and Bitcoin Cash
Like Bitcoin, Bitcoin Cash has its own blockchain and its security algorithm is proof of work or mining. So by reading the article “How does Bitcoin work?” You will also get a proper understanding of how Bitcoin Cash works.
Since Bitcoin Cash was separated from Bitcoin as a result of a hard fork, it can be seen that the history of transactions and their database are similar to each other. Therefore, it takes 10 minutes to create a block in the Bitcoin Cash blockchain, and its block reward is currently 6.25 BCH units.
Currently, 6.25 Bitcoin Cash units are generated every 10 minutes. The mining reward on the Bitcoin Cash network, like Bitcoin, will be halved approximately every 4 years during an event called a halving.
The time required to calculate and create a new block in Bitcoin Cash, like Bitcoin, is affected by a parameter called “mining difficulty”. If the computing power of miners increases, the time to create a block can be kept constant by increasing the mining difficulty.
Initially, Bitcoin Cash, like Bitcoin, used a Difficulty Adjustment Algorithm (DDA) to ensure that new units were mined every 10 minutes, not sooner or later. Based on this algorithm, the difficulty level is adjusted after every 2,016 blocks (approximately every two weeks). For example, if the processing power of network miners suddenly increases today and new units are mined in 8 minutes instead of 10 minutes, the difficulty of mining will increase two weeks later so that the average block time remains at ten minutes.
But after a short time, the developers came to the conclusion that in order to motivate chain miners and attract more of them, they had to change this mechanism. Besides DAA, they also used the Emergent Stiffness Adjustment Algorithm (EDA). If the time interval between the extraction of 6 blocks was more than 12 hours, this new algorithm would reduce the difficulty of extraction by 20%.
EDA settings interfered with mining difficulty, and as a result, the Bitcoin Cash blockchain moved thousands of blocks ahead of Bitcoin. To fix this problem, Bitcoin Cash developers made a change to the DAA algorithm, such that it adjusted the mining difficulty after every block, not after 2,016 blocks. They also removed the EDA algorithm altogether.
Transaction without verification
A zero confirmation transaction refers to transactions that have not yet been recorded on the blockchain, but the seller of a product or service considers it as received and sells the service. Many people in the digital currency community welcome the idea of transactions without the need for verification; Because it causes transactions and payments to be done more quickly, which is desirable for both sides of the transaction.
However, transaction without verification is highly controversial; Some people think that this feature can be troublesome and dangerous due to the possibility of a “double spend attack”. Under this assumption, one could send a transaction to a seller of a good or service, and after receiving the service, send a transaction back to the network, effectively spending bitcoins twice.
However, businesses accepting Bitcoin Cash can take the no-verification feature as an advantage for micro-transactions (where there is no incentive to spend twice). With this, as soon as the transaction is sent, the customer can receive the goods or services.
Bitcoin Cash can be a good option for providing a transaction feature without the need for verification for the following three main reasons:
- Bitcoin Cash has removed the possibility of “transaction replacement”.
- There is plenty of room for even low-fee transactions.
- Transaction confirmation time is always fixed.
Remove the “transaction replacement” feature.
Since its inception, Bitcoin has supported the feature that an unconfirmed transaction may be modified and re-released to the network. This concept is known as “transaction replacement” because the new transaction replaces the old transaction.
Since no fees are paid for previous transactions that are replaced by new transactions, there is a risk of a Didas attack. Attackers can create as many transactions as they want, while only paying a fee for the final transaction. During this type of attack, the network becomes congested with fake transactions and crashes.
To solve this problem, the Bitcoin community developed the concept of “fee exchange”. Despite such conditions, the user must pay the replaced transaction fee in addition to the replacement fee.
But even the ability to replace with a fee has been criticized. Despite this feature, anyone can retransmit their transaction to the network with a higher fee, and the Bitcoin network will consider the same transaction with a higher fee as the original transaction.
For example, you can pay for your coffee with Bitcoin and as soon as you leave the cafe and before confirming the transaction, you can send your transaction to the network again with a higher fee and transfer the money you paid for the coffee to your wallet. return In fact, this is how you get your coffee money back.
Bitcoin Cash removed this feature from its code, aiming to be used as a digital currency rather than a store of value. For this reason, it is also known as “coffee coin” which means “coffee coin”; Because it can be used to make regular daily payments (which is mostly coffee among the people of the world). With this feature as well as instant transaction confirmation, this digital currency can be considered a safe and fast way to pay.
Creating a separate token
Bitcoin Cash has provided its users with a feature through which anyone can create tokens on the BCH network using the Simple Ledger Protocol (SLP) and wormhole-launched.
SPL is a project that provides the possibility to create tokens, buy, sell and manage them on the Bitcoin Cash blockchain in just a few seconds and at a very low cost. Creating and distributing tokens on the Bitcoin Cash blockchain may be very simple and perhaps somewhat fun, but what matters is adding value to these tokens.
Bitcoin Cash (BCH) price history
After its launch in late 2017, Bitcoin Cash has always been one of the top digital currencies in the market. At the time of updating this article, according to CoinMarketCap, Bitcoin Cash is the 20th largest cryptocurrency by market capitalization, with a market capitalization of over $4.6 billion. Although the cryptocurrency market is known for its extreme volatility, the price of Bitcoin Cash fluctuates even more than the market average.
As you can see in the chart below, the price of BCH was around $360 on the first day of its listing on the exchange, in August 2017, and five months later, on December 20 of the same year, it reached its all-time high of around $4,000. . This rapid and significant growth allowed the investors who invested in it to receive a 1,000% profit in less than six months.
With the arrival of the declining period of digital currencies in 2018, which is also known as the “winter of digital currencies”, the value of Bitcoin Cash also decreased like other digital currencies. After that, the errant brother of Bitcoin could not revive itself properly.
Among the most important factors that can increase the price of this digital currency in the long term, the following can be mentioned:
- Bitcoin's scalability issues
- The movement of miners to mine Bitcoin Cash instead of Bitcoin
- More practical than Bitcoin
In fact, it can be said that the growth of Bitcoin Cash depends on the failure of Bitcoin to achieve its goals. Therefore, if you are not optimistic about the future of Bitcoin, investing in BCH or other forks of this digital currency can be one of your main options.
Bitcoin Cash (BCH) wallets
There are dozens of wallets available for BCH in different names and types. With many free software, you can easily save, receive and send this digital currency on your personal computer, mobile phone or even on the Internet. Some of the best Bitcoin Cash wallets are:
- Trust Wallet
- Coinomi wallet
- Bitcoin.com wallet
- Atomic wallet
- Ledger wallet
- Trezor wallet
| name | type | Download/access link |
|---|---|---|
| Trust Vault | Software/mobile | Download |
| Coinomi | Software / mobile – computer | Download |
| Bitcoin.com wallet | Software / mobile – computer | Download |
| atomic | Software/Mobile – PC | Download |
| Ledger wallet | hardware | Physical – must be purchased from authorized stores |
| Treasure wallet | hardware | Physical – must be purchased from authorized stores |
To avoid the risk of malware and theft, be sure to get wallets from reputable sources and use ones that have a lot of users and have stood the test of time. Also, if you have invested a lot, you can buy a hardware wallet for extra security.
Do not forget to make a backup copy of a digital currency wallet before using it. Wallets usually show the user a set of 12 English words for backup, which should be written down in a safe place.
In case of deletion of wallet or any other problem, user can recover their assets again. If you don't back up your wallet, you'll never be able to recover your assets if your wallet gets deleted, stolen or your device crashes.
Valid software wallets have sufficient security; But as mentioned, if you have significant capital or are looking for higher security, hardware wallets such as Ledger and Trezor are good options for safe storage of your assets.
How to buy Bitcoin Cash (BCH)
To buy Bitcoin Cash, the best way is to visit a digital currency exchange site. Most users living in Iran usually use one of the following two methods:
- Direct purchase from Iranian sites with Rial and bank card
- Buying Bitcoin or Tether from Iranian sites with Rials and then converting it to Bitcoin Cash in foreign exchanges such as Binance (Binance.com)
The second method was very popular in the past. But after authentication was made mandatory in almost all major foreign exchanges, it was removed from the list of suitable options for Iranians.
For example, authentication was not mandatory on Binance in the past. Therefore, Iranian users used this exchange for trading by using a filter breaker and observing special security considerations. But after Binance announced the necessity of authentication, it became practically impossible for Iranians to use this exchange.
Currently, domestic exchanges are the best option for Iranian users. Authentication in these exchanges for Iranians is simply an internet registration, and popular coins and tokens are quickly listed in them.
By searching for the term “buy Bitcoin Cash” on Google, you will come across a large number of exchanges that support this digital currency. We suggest you also use the bitcoin cash purchase page of Erzdigital website. On this page, by specifying the amount and entering information such as national code and phone number, you will be directly transferred to the payment gateway and you can make your purchase.
Frequently asked questions
A disagreement among Bitcoin developers over increasing the block size led to the fork of Bitcoin and the creation of Bitcoin Cash. According to the Bitcoin Cash community, in order to achieve scalability, the cumbersome rules of Bitcoin (such as block size) should be changed.
The most basic difference between Bitcoin and Bitcoin Cash is their block size. Because Bitcoin Cash is a separate fork and chain of Bitcoin, it has many similar features to Bitcoin.
To buy BCH directly, you can visit Iranian exchange sites. You can also buy Bitcoin or Tether and convert it to BCH on international exchanges.
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