Bitcoin Cash

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Bitcoin Cash (BCH) is the crypto currency that appeared on August 1st, 2017 as a Bitcoin branch.

The main difference from the “mother” crypto currency is a bigger block capacity (8 Mb instead of 1 Mb), which affects positively the speed of operations.

History[edit]

The capacity of one block in a Bitcoin blockchain doesn’t exceed 1 Mb. When the number of the network users became big and the number of the fulfilled operations increased rapidly, such capacity was already not enough for checking all transaction. As a solution two options were offered: increasing the block capacity or putting a part of information out of a blockchain by making a free space for new operations.

In June 2017, the situation became critical and the blockchain community chose a compromise solution to introduce a new protocol SegWit2xm, which puts a part of information out of a blockchain, as well as to increase the blocks up to 2 Mb in prospect. 95% miners voted for it.

A group of developers under the leadership of Amaury Séchet, ex-engineer of Facebook, was up for preserving the former structure by increasing the blocks to 8 Mb. They implemented this idea on August 1st, 2017, by withdrawing from the Bitcoin blockchain and naming the new branch Bitcoin Cash.

The last common block of Bitcoin and Bitcoin Cash became block 478558. Block 478559 was already different for each crypto currency. As a result, everyone who had got Bitcoins before block 478559, have become owners of Bitcoin Cash automatically as well.

Initially, Bitcoin Cash were traded at a price of 0.5 Bitcoin. However, as of the end of October 2017, its price fell up to 0.08 BTC. At that, the market capitalization exceeds 6 billion US dollars.

Technical characteristics[edit]

Since the Bitcoin owners before August 1st, 2016 have automatically become Bitcoin Cash owners, to prevent double expenses, the Bitcoin Cash transactions use a new algorithm of signature hashing, which isn’t valid in the Bitcoin Legacy network. It prevents repeated transactions of Bitcoin Cash in the Bitcoin blockchain and vice versa.

Bitcoin authors state that unlike Bitcoin, Bitcoin Cash doesn’t have a unified team of developers: instead of this, there are several independent groups. Such decentralization creates an additional protection degree.

In prospect, the developers consider the possibility to increase the capacity of blocks even more.

Attitude of community and perspectives[edit]

Initially, Coinbase, one of the largest crypto currency exchanges stated that they are not going to work with Bitcoin Cash, however their opinion was changed later, and they promised to start supporting Bitcoin Cash transactions before January 1st, 2018. The exchanges Kraken, Bitfinex and Poloniex also announced their support of the new crypto currency. At the same time BitMEX, Exodus и Bitstamp spoke against Bitcoint Cash.

In October 2017, Bitmain, the largest manufacturer of mining equipment in China, which supplies about two thirds of the entire hash power in the Bitcoin network, announced that they are going to accept only Bitcoin Cash when selling the newest ASIC-miners. The reason lies in the economy: the transaction fee of Bitcoin Cash is significantly lower than in other crypto currencies.

According to the analysts’ estimations, such decision may lead to the rate growth of the new currency.

Sources[edit]

https://www.bitcoincash.org/#about

https://en.wikipedia.org/wiki/Bitcoin_Cash