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Bitcoin cash is a phenomenal cryptocurrency that came into the picture in August 2017, initially originated from a fork of bitcoin. Bitcoin cash processes more transactions than any other cryptocurrencies due to the increased block size.
Soon after its advent, this cryptocurrency has undergone strides of the fork and segregated into the Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Version). As the name Bitcoin Cash implies, it leverages the original Bitcoin Cash client.
Explanation of Bitcoin Cash
Bitcoin anonymous creator Satoshi Nakamoto designed it to be used as a peer-to-peer electronic cash transfer system for our daily life transactions. Since the price of bitcoin goes up in the past, it has gained too much traction from the mainstream media and technology enthusiasts.
In 2017, Bitcoin gives a whopping return to its investors and such a staggering return convince retail investors to envisage it as a lucrative investment instrument instead of currency.
Initially, the blockchain-driven bitcoin faces a stability concern because it can only handle quite a few numbers of transactions that is nowhere comparable with Visa and Master Card. Additionally, the confirmation time and transaction processing fees on the Bitcoin’s Blockchain network also go up.
The reason for all this inconvenience is that the maximum size limit for each block of the Bitcoin Blockchain network is 1MB. Transactions get accumulated, waiting for the confirmation because the blocks could not tackle an increased number of transactions due to their size constraint.
Bitcoin Cash addresses the scalability concern of the bitcoin smartly by increasing the size of each block and make it between 8MB and 32MB. Correspondingly, more transactions can be processed by each block. As Bitcoin Cash increased the size of each block thereby it can process 10,000 to 15,000 transactions easily.
The transaction processing ability of Bitcoin Cash once escalated to 25,000 per block during the stress time in September 2018.
What makes Bitcoin Cash distinguished from the Bitcoin is that it doesn’t incorporate Segregated Witness (SegWit), another most viable solution put forwarded by the blockchain developers to accommodate more transactions per block.
Bitcoin and Bitcoin Cash are similar in plenty of different ways: Both of them harness the proof-of-work consensus algorithm to mine new digital coins. The supply of both Bitcoin and Bitcoin Cash is restricted to 21 million algorithmically.
Both of them leverage the same difficulty algorithm – Emergency Difficulty Algorithm – which adjusts the difficulty after every 2016 blocks or roughly after every two weeks. But recently Bitcoin Cash has simplified its Emergency Difficulty Algorithm to incentivize its miners.
History of Bitcoin Cash
In 2010, the average size of each block of Blockhain-driven Bitcoin network was 100KB and it doesn’t charge more than a few cents to process each transaction. This made bitcoin more vulnerable to malicious attacks.
To mitigate this risk, the size of each block of Bitcoin’s Blockchain was extended up to 1 MB. The size constraint of each block and the time incurred on the creation of each block of Bitcoin’s Blockchain raises a serious security concern for the Bitcoin.
Due to the awareness about the potential implications of Bitcoin, the number of transactions using it soars. But the Bitcoin network isn’t adequate to address such a large number of transactions thereby unconfirmed transactions start accumulating. On the other hand, the average time to process each transaction also goes up. Eventually, transaction processing fees for Bitcoin also escalates. Therefore, the argument of crypto enthusiasts that Bitcoin is better than the traditional transaction processing systems due to its lowers fees no longer remains valid.
In order to resolve the scalability concern, two solutions were proposed by the Blockchain developers: Increase the block size or eliminate certain parts of a transaction to put more data into the same block. Amidst the implementation of these proposals, Bitcoin Cash came into the picture in July 2017 as the perfect solution to all the solutions facing Bitcoin.
Initially, major cryptocurrency exchanges like Coinbase and ltbit abstain from listing Bitcoin Cash, but it received vital support from the Bitmain, the world’s largest cryptocurrency exchange.
Bitcoin Cash has a team of highly-skilled programmers and software developers who are working very hard to make it adaptable for the massive adoption. Apart from that, the decentralized nature of Bitcoin Cash makes it less prone to political and social attacks.