What is Bitcoin Cash (BCH)
Bitcoin Cash (BCH) is a peer-to-peer electronic cash system that is the result of a bitcoin blockchain hard fork. Notably, Bitcoin Cash is by far the most successful Bitcoin hard fork to date. The project entered the market under a cloud of controversy. However after the smoke cleared, Bitcoin Cash emerged as one of the top ten cryptocurrencies in the world in terms of market caps.
Bitcoin Cash is the direct result of scalability issues encountered on the blockchain of Bitcoin. During the 2017 Crypto Craze, these issues took center stage as Bitcoin’s transaction time and fees rose to new heights. This increase in fees and delays was the result of too much network congestion due to larger transaction sizes.
That year the use and value of Bitcoin skyrocketed as more investors learned about this digital asset. In addition, a flood of new investors entered the market eager to get into the digital “gold rush.” These factors pushed Bitcoin’s network to its maximum capabilities.
Simply put, Bitcoin couldn’t handle the increase in usage. It’s one thing to cater to the programming and darknet communities, but it’s a completely different story to meet the demands of the general public. To accomplish this task, Bitcoin would need to be significantly scaled up.
More Data = More Transaction
Bitcoin Cash removes these concerns by increasing the size of the block. These larger blocks are in a position to fit more transactions per block. This strategy increases the network transaction-per-second (tps) rate as a whole. The goal was to allow Bitcoin Cash to function as a medium for day-to-day transactions, as was the original intent of Bitcoin by Satoshi Nakamoto’s Whitepaper.
While increasing the block size in most blockchain’s would not be a major issue, for bitcoinists, changing the coin core protocol is a no-no. To these individuals, known as Bitcoin Core, the size of the 1MB block serves a vital function in the network they argued for.
In the first place, it allows anyone to participate in the network regardless of their computer. However with the advent of ASIC mining rigs, this argument is still under discussion today. It also prevents the network from getting bogged down in spam data.
Bitcoin Cash proponents believed that increasing the size of blocks to between 8 MB and 32 MB was the best way to provide Bitcoin users with the services they need on a daily basis. These larger blocks allow more transactions to be processed per block. Bitcoin users, in turn, could avoid fees and delays.
This increase in transactional throughput allowed Bitcoin Cash to deny the need to incorporate the Segregated Witness (SegWit) protocol. SegWit reduces the amount of data sent to each transaction. It’s part of the core coding of Bitcoin today.