You've probably heard of Bitcoin, the digital currency that took the world by storm. So, what is this Bitcoin Cash all about then? 🤷
Just as the name suggests, Bitcoin Cash is a cryptocurrency in its own right. Based on the original Bitcoin, this new currency aims to replace cash altogether. Here is everything you need to know about it:
Who created Bitcoin Cash? 🧐
Also known by its ticker BCH, Bitcoin Cash was created by a group of developers who were originally part of Bitcoin. Because these developers weren’t happy with the direction that the original currency was heading in, they decided to implement a 'Fork' to the bitcoin code, which marked the beginning of Bitcoin Cash.
When was it launched? 📆
Launched in August 2017, Bitcoin Cash was created by miners and developers after disagreements within the bitcoin community over how best to scale Bitcoin to support future transaction volumes.
The new currency's sole purpose as is to provide a fast, cheap way of sending money across the globe. This was also the reason Bitcoin Cash has powerful supporters like Roger Ver of Bitcoin.com backing it.
Why were some developers not happy with Bitcoin? 👩🏼💻
As the first mainstream cryptocurrency, Bitcoin was intended to replace fiat money (the Pound, the Euro etc.). The original currency was meant to do so by providing a fast, safe and secure type of electronic money which could be sent instantly, in any amount, anywhere in the world.
But some 8 years after Bitcoin’s creation, it was pretty clear the cryptocurrency was becoming more and more impractical for everyday use and instead, it was being used more as a type of digital investment, similar to buying and holding gold, for example.
Bitcoin was meant to replace fiat currencies by becoming the world's first decentralised digital currency that actually worked, but somewhere down the line something changed. 🕵🏻♂️
By May last year, a single Bitcoin transaction could take up to 4 days to complete and had an average cost of $28. In comparison, sending money abroad via a SWIFT transfer costs roughly the same amount and in some cases, takes less time to arrive in the recipient’s account.
Was this signalling the end of Bitcoin? 🔚
Not really - seeing that more and more people were using Bitcoin (BTC) to store value rather than use it for its intended purpose as a transactional currency, part of the development community decided to change bitcoin's code, in order to cut fees and speed up transaction times.
In the community's view, this update to the code would put Bitcoin (BTC) back on its original path of becoming the world's first fully decentralised digital currency.
But some developers weren’t so happy about the proposed changes and wanted to maintain the current codebase - after all, developing and maintaining the original code was done with pride and patience. The solution was to split Bitcoin into two different cryptocurrencies.
A fork in the Bitcoin Blockchain 🍴
So, after much controversy and debate within the crypto community, this change, also known as a hard fork, came into effect on the 1st of August 2017, and effectively split the Bitcoin blockchain into two separate ones – the original Bitcoin (BTC) and the newly created Bitcoin Cash (BCH).
A change in a cryptocurrency’s code is known as a hard fork because the blockchain (the ledger holding the currency’s entire transaction history) branches out to form a new one, thus giving birth to a new crypto offspring. Think of a 'hard fork' as a fork in the road and you're there!
So what exactly makes BCH special? 🤔
While Bitcoin Cash has many things in common with the original cryptocurrency (BTC), it also differentiates itself by offering a number of improvements in key areas such as:
- Increased blocksize - 32Mb as of 15th May (upgraded from 8Mb previously)
- No SegWit integration - the controversial upgrade that was added to Bitcoin (BTC) to allow for more transactions to be processed.
- Different transaction signature hashing algorithm - added to provide replay protection for Bitcoin Cash transactions against the Bitcoin chain
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