Understanding Bitcoin Cash – General Overview
Bitcoin cash is a cryptocurrency created in August 2017, from a fork of Bitcoin.1 Bitcoin Cash increased the size of blocks, allowing more transactions to be processed and improving scalability.
The cryptocurrency underwent another fork in November 2018 and split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Bitcoin Cash is referred to as Bitcoin Cash because it uses the original Bitcoin Cash client.
How Does Bitcoin Cash Work?
The difference between Bitcoin and Bitcoin Cash is philosophical.
As proposed by Bitcoin inventor Satoshi Nakamoto, Bitcoin was meant to be a peer-to-peer cryptocurrency that was used for daily transactions. Over the years, as it gained mainstream traction and its price surged, Bitcoin became an investment vehicle instead of a currency. Its blockchain witnessed scalability issues because it could not handle the increased number of transactions. The confirmation time and fees for a transaction on bitcoin’s blockchain surged. This was mainly due to the 1MB block size limitation for bitcoin. Transactions queued up, waiting for confirmation, because blocks could not handle the increase in size for transactions.
Bitcoin Cash proposes to resolve the situation by increasing the size of blocks to between 8 MB and 32 MB, thereby enabling the processing of more transactions per block. The average number of transactions per block on Bitcoin at the time Bitcoin Cash was proposed was between 1,000 and 1,500. The number of transactions on Bitcoin Cash’s blockchain during a stress test in Sep. 2018 surged to 25,000 per block.
Bitcoin Cash Mining – Know The Basics
Just like Bitcoin, a block of transactions is confirmed by the Bitcoin Cash mining community every 10 minutes using a CPU or GPU. Before a block can be confirmed, all the miners on the Bitcoin Cash network must attempt to solve a cryptographic puzzle. This puzzle is so difficult that no human could solve it, instead, it requires a lot of computational power to do so.
Every miner on the Bitcoin Cash network is competing to be the first to solve the puzzle! This is because whoever solves it first, gets the mining reward. The current reward for successfully mining a block is 12.5 BCH, which will remain in place until April 2022. After that, the reward will be halved to 6.25 BCH.
Bitcoin Cash Facts
The value of Bitcoin Cash (BCH) is highly fluctuating, since late 2017, it has fluctuated from $75USD to over $4355 USD.