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What is Bitcoin Cash? Comprehensive Buying Guide
Bitcoin Cash is one of the most popular cryptocurrencies in existence due to its roots as a fork of the Bitcoin blockchain back in 2017. The altcoin was created as a way to implement lower transaction fees for cryptocurrency users while also holding onto some aspects of Bitcoin’s original legacy.
Right now, you probably have two questions:
- What is Bitcoin Cash?
- How do I buy Bitcoin Cash?
You’ll never believe this, but we have the answers. Okay, you probably will believe it since you’ve found CryptoVantage and know that we’re industry experts here to help you navigate your cryptocurrency journey – whatever that journey may be.
Bitcoin Cash Pros & Cons
A larger block size limit allows the Bitcoin Cash network to process more on-chain transactions per second
The excess block space available on the Bitcoin Cash network means users pay lower fees
Bitcoin Cash developers have implemented additional functionality for more advanced smart contracts
Bitcoin Cash benefits from the “Bitcoin” branding in its name
Early Bitcoin adopter Roger Ver has thrown a large amount of support behind Bitcoin Cash
There are some security concerns around Bitcoin Cash
The increased block size limit on Bitcoin Cash increases the costs of operating a full node on the network
Bitcoin Cash does not contain the SegWit (Segregated Witness) upgrade found in Bitcoin
Bitcoin Cash has faced some mining-related issues related to its alternative difficulty adjustment algorithm
Our Favorite Cryptocurrency Exchange for Bitcoin Cash
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Bitcoin Cash Ratings
All Time Low : $75.03 (Dec 15, 2018)
All Time High : $4,355.62 USD (Dec. 20, 2017)
All Time High: $66,171,059,189 (Dec. 20, 2017)
Current : 18,226,913 BCH
Max: 21,000,000 BCH
High (116+ tx/s)
Reason: The distribution of Bitcoin Cash coins on the blockchain is normal for the cryptocurrency world. More than 50% of all Bitcoin Cash is held by less than 2,000 addresses; however, this is not that uncommon for altcoins. This is a bit more centralized than the distribution found in Bitcoin and roughly the same sort of level seen in Bitcoin SV.
Bitcoin Cash has a developer community that has been working on innovations around privacy, smart contracts, and scaling, among other innovations. However, a key benefit for developers in the Bitcoin Cash ecosystem has been the grants offered to these developers by entities such as Bitmain and Bitcoin.com.
Due to its origins as what effectively is a side project to Bitcoin, Bitcoin Cash has been able to achieve high volumes of trading on exchanges. Bitcoin Cash can usually be found in the top ten in terms of 24-hour trading volume, and it is rated even higher in terms of market cap. That said, the trading levels seen in Bitcoin Cash do not come anywhere near the levels seen in Bitcoin.
What is Bitcoin Cash: A Brief History
The Bitcoin Cash network launched on August 1, 2017 as a community driven project with a focus on increasing Bitcoin’s base block size limit. Some Bitcoin users had given up on this hard-forking change being implemented on Bitcoin itself, which is why the alternative network was launched. In addition to increasing the block size limit, the Bitcoin Cash network did not adopt the Segregated Witness improvement, which was activated on Bitcoin around the same time.
While Bitcoin Cash did not gain much attention at first, the altcoin gained greater appeal after the collapse of the SegWit2x plan for Bitcoin. A collection of miners, exchanges, wallets, and other notable entities in the Bitcoin ecosystem had agreed to activate SegWit and then implement a doubling of the block size limit later in the year, but consensus for the block size limit increase fell apart after SegWit had been activated. At this point, Bitcoin Cash became appealing to some cryptocurrency enthusiasts as a version of Bitcoin with a much higher block size limit.
In late 2018, the Bitcoin Cash network faced a crisis when consensus could not be reached on the future development path for the project. Two competing hard forks of the Bitcoin Cash network were eventually activated at the same time. The end result was the continuation of the Bitcoin Cash network and the creation of Bitcoin SV. Notably, Bitcoin SV is the cryptocurrency backed by the self-proclaimed (and highly disputed) creator of Bitcoin, Craig Wright.
How Do I Buy Bitcoin Cash?
Where to buy Bitcoin Cash? Like Bitcoin, it is easily purchased on a cryptocurrency exchange. As the most popular fork of Bitcoin, BCH is available on almost every exchange including all of the following:
Advantages of Bitcoin Cash
The main advantage of Bitcoin Cash that is continuously mentioned by its committed user base is its lower on-chain transaction fees (as compared to Bitcoin). After all, this is why the alternative cryptocurrency network was created in the first place.
Bitcoin Cash also benefits greatly from early Bitcoin adopter Roger Ver’s strong support for the project. The biggest support system over the years has come in the form of his Bitcoin.com website, where Bitcoin Cash is often compared favorably to the Bitcoin network. However, Ver has also been criticized for using his domain in a manner that could be seen as misleading to new cryptocurrency users. This is something that we take issue with since misleading new crypto adopters is a big problem. Cryptocurrency is easy to adapt and factor into your spending once you understand how it works. We do not want newbies getting misinformation about Bitcoin Cash or any other digital asset for that matter.
Disadvantages of Bitcoin Cash
The main disadvantage of Bitcoin Cash is that its name puts it in direct competition with the much larger and popular Bitcoin network. Although Bitcoin Cash was able to attain a sizable chunk of the cryptocurrency market at first, it has now dwindled down to less than 5% of the size of Bitcoin in terms of key metrics such as market cap and hashrate.
While it’s true that Bitcoin Cash tends to have longer on-chain fees than Bitcoin, the reality is the Bitcoin network has also enabled instant, cheap transactions by way of a secondary protocol layer known as the Lightning Network.
Additionally, the smaller network effects around Bitcoin Cash as a form of money have led to greater levels of volatility for Bitcoin Cash holders and a severe decline against Bitcoin itself over the past couple of years.
Finally, the relatively small chunk SHA-256 mining devices are pointed at the Bitcoin Cash network, which can be viewed as a security concern. It would only take a small fraction of Bitcoin miners to move over to the Bitcoin Cash network in an effort to disrupt the blockchain via a 51% attack.
Ledger Nano X
Best hardware wallet for storing BCH
Bitcoin Cash Frequently Asked Questions
Whether you should use Bitcoin or Bitcoin Cash depends on your use case. If you are looking to hold a cryptocurrency as a store of value, then Bitcoin is likely the better option. If you are looking to make an online payment via a cryptocurrency for one reason or another, then Bitcoin Cash could be considered, although Bitcoin’s Lightning Network can also be useful for these sorts of transactions.
Bitcoin Cash is available on most exchanges due to its relative popular in the altcoin space. The cryptocurrency is available for trade on well-known platforms like Binance and Coinbase.
Bitcoin Cash is listed as BCH on exchanges to make sure that it is not confused for the real Bitcoin, which uses the ticker symbol BTC. Some exchanges also list Bitcoin Cash as BCHABC due to the split of the network that led to thecreation of BSV back in 2018.
Yes, you can transfer your Bitcoin Cash holdings to your bank account via an exchange. In terms of altcoins, this cryptocurrency is easy to convert to currency in your local bank account due to its prevalence on various exchanges around the world.
The only places where the use of Bitcoin Cash is illegal are Bolivia, Columbia, and Ecuador. Having said that, there may be limitations on the use of Bitcoin Cash in other countries.
Bitcoin Cash is good for making small, low cost payments online. However, Bitcoin’s Lightning Network technology can also be used for these sorts of transactions.
Bitcoin Cash is not the same as Bitcoin SV. Bitcoin SV was created during a dispute regarding the developmental roadmap for the Bitcoin Cash project. These are two separate cryptocurrency networks, and Bitcoin SV is the project promoted by the self-proclaimed (but highly disputed) creator of Bitcoin, Craig Wright.
It should also be noted that Bitcoin Cash is separate from Bitcoin as well.
While it is technically possible to mine Bitcoin Cash, the reality is this sort of activity requires heavy investment, as cryptocurrency mining has become a highly-specialized industry over the years. In other words, you likely won’t make a profit if you’re simply plugging in some mining equipment in your home or apartment.