Bitcoin Cash Review
To increase number of transactions per block, to decrease transaction fees, to reduce the size of individual transactions
Pros & Cons
- Facilitates more transactions per block
- Reduces size of each individual transaction
- Reduces time taken for confirmation
- Reduces transaction fees
- System becomes more scalable
- Creation of Bitcoin Cash led to a split in the Bitcoin community
- Some exchanges and wallets do not support Bitcoin Cash
- Bitcoin continues to enjoy more popularity and acceptance than Bitcoin Cash
- Fast transactions that last just a few seconds
- Reliable and unclogged network
- International fund transfer for low fees
- Easy to use
- Stable system of making payments
- Works on the blockchain technology
Bitcoin Cash Info
- Satoshi Nakamoto
- GitHub Last Updated
- Jan 6, 2018, 12:11 p.m. GMT +5.30
Bitcoin Cash is a brand new digital coin that was created during a hard fork in the original Bitcoin blockchain in August 2017. Since it increases block size, a larger number of transactions can be processed.
According to the official website of Bitcoin Cash, it “brings sound money to the world,” thereby fulfilling all the promises that the original Bitcoin made. Some of the biggest advantages are reliable confirmations and low transaction fees. Since it has the potential to grow without restrictions and can be adopted at the international level, its future can be said to be secure. Bitcoin Cash welcomes everybody to join its community.
History of Bitcoin Cash
To understand the history of Bitcoin Cash, you must understand some of the shortcomings of Bitcoin. Many in the Bitcoin community were worried about the fact that the block size in the original Bitcoin blockchain would drastically reduce the transaction fees and thus have an adverse effect on the popularity of Bitcoin. The limit on block size was imposed when the value of Bitcoins was low, but this turned out to be a disadvantage when the value of Bitcoins increased. As a result, the transaction time turned out to be too long.
Over the years, several solutions to this problem were suggested, but any change to the Bitcoin code requires the consensus of miners and developers, which could take time. As a result, groups of miners forked the code and created blockchain ledgers of their own. Bitcoin Cash is the result of such a fork that turned out to be very successful unlike similar forks such as Bitcoin Unlimited and Bitcoin XT.
When the 478,558th block was formed on the Bitcoin blockchain, Bitcoin Cash miners and Bitcoin miners went their separate ways. It took Bitcoin Cash miners nearly six hours to create the first block on the Bitcoin Cash blockchain. Once this happened, the split became official. Initially, there were some problems on the network, but ultimately, all these problems were resolved. Later, wipeout protection and replay protection were enforced on the Bitcoin Cash blockchain.
However, Bitcoin Cash still needs a lot of infrastructure support. Several exchanges and wallets are yet to introduce support for Bitcoin Cash, but all this may change in the near future.
Reasons to Use Bitcoin Cash
Bitcoin Cash has several advantages over Bitcoin, and here are a few of these advantages:
Bitcoin Cash is Scalable: Unlike its predecessor Bitcoin, Bitcoin Cash is more scalable. The first step to increase scalability was taken when the limit on the size of each block on the blockchain was increased to 8MB.
SigHash: A new and improved type of transaction signature improves the security of the hardware wallet, gives replay protection, and eliminates the problem of quadratic hashing.
Difficult Adjustment Algorithm (DAA): This algorithm makes it easy for miners to migrate from the original Bitcoin blockchain whenever they desire. It also protects against fluctuations in the hash rates.
Decentralization: Bitcoin Cash is 100% decentralized as it features several independent developers contributing to its software. Moreover, political and social changes have no effect on it and no project, individual, or group can establish control over it.
How Bitcoin Cash Works
According to the official website of the Bitcoin Cash project: “Bitcoin Cash is a peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.” There are a number of similarities between Bitcoin and Bitcoin Cash, but there are some differences too.
Unlike Bitcoin, the size of each block on the Bitcoin Cash blockchain is 8 MB. Bitcoin Cash will not have any segwit or features such as “replace by fee.” But it comes with full protection against wipeout and replay. It is capable of adjusting difficulties related to “proof of work” faster than it happens in Bitcoin.
Since Bitcoin Cash comes from a hard fork in the Bitcoin blockchain, all those who owned Bitcoins received an equal amount of Bitcoin Cash coins provided they stored their Bitcoins in wallets and not in exchanges.
Bitcoin Cash has addressed the problem of replay attack better than any other cryptocurrency in the industry. Replay attacks are defined as data transmission that is delayed or repeated with malicious intent. Bitcoin Cash uses redefined algorithms to protect against replay attacks.
The success of a cryptocurrency depends a great deal on its miners, and Bitcoin Cash is no exception to this rule. Recently, Bitcoin Cash’s hash rate has greatly increased because the large number of miners it has attracted. The cryptocurrency succeeded in attracting miners because it decreased the proof of work difficulty rate.
The proof of work difficulty rate continues to adjust according to the number of miners on the blockchain. The rate goes down when the number of miners is smaller. When Bitcoin Cash was just created, it hardly had any miners. As a result of this, its proof of work difficulty rate plummeted, a fact that attracted a number of miners who saw the lucrative opportunities. As a result, a large number of miners migrated to the Bitcoin Cash blockchain from the Bitcoin blockchain. When this happened, Bitcoin’s hashing power decreased by 50 percent, increasing its transaction fees and decreasing its transaction time.
Value of Bitcoin Cash
The value of Bitcoin Cash had shot up to US$3000 before dropping to US$2500 in the middle of January 2018. Some people felt that the price will drop further to US$2000, but that did not happen, indicating the fact that Bitcoin Cash is still in a good position.
Future of Bitcoin Cash
I cannot predict the future of Bitcoin Cash in certainty. In fact, no one can. Nobody knows how the new cryptocurrency will fare in the future. Nobody knows its long-term effects on Bitcoin. However, a number of experts are absolutely sure that Bitcoin Cash is the result of the most successful hard fork ever on the Bitcoin blockchain.
Bitcoin Cash is definitely an experiment, the results of which will provide valuable lessons in blockchain technology. Right now, everybody is happy about the block size of 8 MB, but nobody knows what impact this increased size will have on miners in the future. We still cannot say if the hard fork will definitely solve all the problems of the Bitcoin blockchain. It is also too early to say if Bitcoin Cash will race ahead of Bitcoin and assume the position it currently enjoys.
How to Buy Bitcoin Cash
The following are a few methods to get hold of some Bitcoin Cash:
Method #1: If you already had some Bitcoins in your wallet when the hard fork took place, you will automatically receive Bitcoin Cash coins equal to the number of Bitcoins in your wallet. On the downside, you will find it difficult to withdraw your Bitcoin Cash coins because wallets and exchanges are still confused about the hard fork. You may have to wait several months for the issues to get resolved.
Right now, a number of exchanges such as Bithumb, CEO.IX, and Kraken have realized the potential of Bitcoin Cash and make it very easy for people to purchase and sell Bitcoin Cash.
Method #2: Investors can just visit an exchange such as Bittrex, Kraken, and CEO.IX and purchase the required number of Bitcoin Cash. These exchanges not only facilitate Bitcoin Cash trading, but are also reporting an increase in trading volume. These exchanges not only display information about demand and supply, but also provide the latest Bitcoin Cash prices, making it easy for you to purchase as many as you wish.
Using the Bitcoin Cash: You can use your Bitcoin Cash by either spending it on other altcoins or by converting them into Bitcoins. However, you should take into consideration the following fact while spending Bitcoin Cash. The addresses for Bitcoin Cash and Bitcoin are similar and this leads to a lot of confusion at present. If you reveal the address of one, you will be automatically revealing the address of the other, and this could create privacy and security issues.
Best Bitcoin Cash Wallets
You can choose from a number of Bitcoin Cash wallets, but I would like to recommend the following five:
Coinomi: This is a mobile wallet that features support for multiple cryptocurrencies. You can use it to store a variety of altcoins along with your Bitcoins. Coinomi has support for the largest number of cryptocurrencies at present. Since Coinomi is Hierarchical Deterministic (HD), you are in complete control of private keys. Moreover, when you register at Coinomi, you will receive a seed phrase with 15 words, which you must use in order to restore your Coinomi wallet whenever required. Right now, Coinomi supports only Android devices, but plans to support iOS devices as well.
Electron Cash: Since this is a light wallet, you don’t have to download Bitcoin Cash’s complete node. It was created by a fork in Electrum, a wallet that is popular among owners of Litecoins. Electron Cash supports desktops and Android devices. The wallet also provides a seed phrase, which can be used to back it up.
BU Bitcoin Cash Client: The Bitcoin Unlimited (BU) community has released the latest edition of Bitcoin Cash, which will be offered “unofficially” till the members of the community decide whether they should approve the hard fork. This is a wallet with full support for Bitcoin Cash and is compatible with operating systems such as Mac, Linux, and Windows.
KeepKey: This is a hardware wallet that now supports Bitcoin Cash. Although it isn’t a lightweight wallet, it cannot be denied that it is doing a great job by supporting 5+ cryptocurrencies. You won’t be disappointed if you use KeepKey, but you will find better products in hardware wallets such as Ledger Nano S and Trezor, which are not only convenient, but also offer high-speed integration for cryptocurrencies.
Bitcoin Classic UAHF Client: This wallet has been Bitcoin Cash compatible right from its launch. When you install it, you can easily follow the blockchain ledger of Bitcoin Cash. The wallet is compatible with operating systems such as Windows, Mac, and Linux.
You can use the following resources to stay updated on the latest happenings on the Bitcoin Cash blockchain: