Bitcoin Cash (BCH) emerged in August 2017 as a result of a contentious hard fork from the original Bitcoin blockchain. Born out of ideological disagreements within the Bitcoin community, BCH was designed to fulfill the vision of a peer-to-peer electronic cash system—offering faster transactions, lower fees, and improved scalability. This article explores the origins, technical features, use cases, and ongoing relevance of Bitcoin Cash in today’s cryptocurrency landscape.
The Origins of Bitcoin Cash
The creation of Bitcoin Cash stemmed from growing dissatisfaction with Bitcoin’s ability to scale effectively. By 2017, Bitcoin users were experiencing long confirmation times and rising transaction fees due to network congestion. These issues contradicted Bitcoin’s original promise of fast, low-cost payments.
A key debate centered on how to increase transaction throughput. One camp supported increasing the block size limit, allowing more transactions per block. The opposing side advocated for off-chain scaling solutions like Segregated Witness (SegWit), which separates signature data from transaction data to free up space.
Since Bitcoin operates on a decentralized consensus model, any protocol change requires broad agreement across miners, developers, and node operators. When consensus couldn’t be reached, a group of developers, miners, and investors—including notable figures like Jihan Wu (co-founder of Bitmain) and Roger Ver (CEO of Bitcoin.com)—executed a hard fork to create Bitcoin Cash.
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Core Technical Features of Bitcoin Cash
Bitcoin Cash shares many foundational elements with Bitcoin but introduces key modifications aimed at enhancing performance and usability.
Increased Block Size
The most significant upgrade in BCH is its larger block size. While Bitcoin maintains a 1 MB block limit (increased effectively via SegWit), Bitcoin Cash initially raised the limit to 8 MB and later expanded it to 32 MB. This allows more transactions to be processed per block, reducing congestion and lowering fees.
Despite this capability, average block sizes have remained well below capacity—often under 1 MB—due to lower transaction volume compared to Bitcoin.
Difficulty Adjustment Algorithm (DAA)
Both networks use Proof of Work (PoW) for consensus, but they differ in how mining difficulty is adjusted. Bitcoin recalibrates difficulty every 2,016 blocks (approximately every two weeks), while Bitcoin Cash adjusts after each block. This dynamic adjustment helps maintain consistent block production times even if hash power fluctuates.
Bitcoin Cash previously used an Emergency Difficulty Adjustment (EDA) mechanism to attract miners during periods of low network activity. However, EDA was removed due to instability and concerns about chain manipulation.
No SegWit, But Schnorr Signatures
Unlike Bitcoin, Bitcoin Cash did not adopt SegWit. Instead, in 2019, it implemented Schnorr Signatures, a cryptographic scheme that improves privacy and efficiency. Schnorr allows multiple signatures to be aggregated into one, reducing data size and increasing transaction throughput—a step toward better scalability without compromising security.
How Bitcoin Cash Compares to Bitcoin
| Feature | Bitcoin (BTC) | Bitcoin Cash (BCH) |
|---|---|---|
| Block Size | ~1–4 MB (with SegWit) | Up to 32 MB |
| Difficulty Adjustment | Every 2,016 blocks | After every block |
| Consensus Mechanism | Proof of Work | Proof of Work |
| Max Supply | 21 million | 21 million |
| SegWit Support | Yes | No |
| Signature Scheme | ECDSA | Schnorr (since 2019) |
While both cryptocurrencies share the same max supply and emission schedule (halving every 210,000 blocks), their philosophies diverge. BTC prioritizes decentralization and security, functioning more as digital gold. BCH emphasizes utility as everyday money.
Use Cases and Adoption
Proponents argue that Bitcoin Cash aligns more closely with Satoshi Nakamoto’s original whitepaper vision: a decentralized electronic cash system for daily transactions. With average fees often below $0.01 and confirmation times under 10 minutes, BCH is practical for microtransactions and retail payments.
Some merchants globally accept BCH through payment processors like BitPay and CoinGate. Platforms such as Bitcoin.com Map list thousands of businesses supporting BCH, though real-world adoption remains limited and inconsistent.
For users, storing BCH requires a compatible wallet. Popular options include Trust Wallet, Ledger, Trezor, and Electrum Cash. It's crucial to remember that BTC and BCH are on separate blockchains—sending one to the other’s address results in permanent loss.
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The Fork That Led to Bitcoin SV
In 2018, another split occurred within the BCH community. Disagreements over development direction led to a hard fork creating Bitcoin Satoshi Vision (BSV), championed by Craig S. Wright and Calvin Ayre. BSV pushed block sizes even further—up to 2 GB—aiming for massive on-chain scaling.
This event, known as the "Hash War," saw intense competition for hash power between BCH and BSV miners. Ultimately, BCH retained stronger community support and market presence, while BSV struggled with credibility issues, particularly due to Wright’s disputed claim of being Satoshi Nakamoto.
Frequently Asked Questions (FAQ)
What is Bitcoin Cash?
Bitcoin Cash (BCH) is a cryptocurrency created in 2017 through a hard fork from Bitcoin. It aims to improve transaction speed and reduce fees by increasing block size, making it more suitable for everyday payments.
Is Bitcoin Cash a scam?
No, Bitcoin Cash is not a scam. It is a legitimate cryptocurrency with active development, mining, and exchange listings. However, like all digital assets, it carries investment risk and should be researched thoroughly before use.
Can I mine Bitcoin Cash?
Yes, Bitcoin Cash uses the same SHA-256 Proof of Work algorithm as Bitcoin, so ASIC miners designed for BTC can also mine BCH. Mining profitability depends on electricity costs, hardware efficiency, and network difficulty.
How do I buy Bitcoin Cash?
You can purchase BCH on major cryptocurrency exchanges such as OKX, Binance, Kraken, and Coinbase. After buying, transfer it to a secure wallet for safekeeping.
Why did Bitcoin Cash fork from Bitcoin?
The fork occurred due to disagreements over scalability. BCH supporters wanted larger blocks to handle more transactions on-chain, while BTC developers favored off-chain solutions like SegWit and the Lightning Network.
Does Bitcoin Cash support smart contracts?
Yes, although not natively at launch, Bitcoin Cash has evolved to support basic smart contract functionality through upgrades like CashScript—a high-level language for writing contracts on the BCH chain.
Final Thoughts
Bitcoin Cash remains one of the most recognized forks in crypto history. While it hasn’t matched Bitcoin’s dominance, it continues to serve a niche as a fast, low-cost payment network. Its focus on usability positions it as a viable alternative for those seeking practical digital cash rather than a store of value.
As blockchain technology evolves, projects like BCH highlight the importance of decentralization and community-driven innovation. Whether you're interested in using cryptocurrency for daily purchases or exploring different visions of decentralized money, understanding Bitcoin Cash offers valuable insight into the broader ecosystem.