What is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency that arises from an update of the Bitcoin blockchain protocol carried out by the community. In a nutshell, it is a hard fork of the Bitcoin blockchain . The main objective of the cryptocurrency was to surpass Bitcoin thanks to its scalability and its great potential as a global payment system.
Bitcoin Cash was born as an alternative to the original Bitcoin due to various changes in the blockchain and structure of this cryptocurrency. Its followers declare that Bitcoin Cash respects the original vision raised in 2008 by Satoshi Nakamoto.
History of Bitcoin Cash
Due to the large increase in users who used Bitcoin , long waiting lines were generated to carry out transactions with this cryptocurrency. This was mainly due to the fact that each one of the blocks of the Bitcoin chain has 1MB of storage and this implies that a maximum of 7/8 transactions are executed per second.
This limitation began to generate conflicts within the Bitcoiner community where two groups with different ideals could be seen:
Those who wanted to increase the block space limit to process about 14 transactions per second.
Those who wanted to keep the current space , since it would raise the costs for the miners.
Finally, part of the community, in favor of expanding the capacity, decided to create a new digital currency called Bitcoin Cash . The name alludes to the fact that BCH seeks to fulfill the original functions proposed by Satoshi Nakamoto of creating digital money that serves as a replacement for cash.
In August 2017, Bitcoin owners saw their balance double due to the creation of this new cryptocurrency, which currently has a maximum capacity limit of 32MB per block, far exceeding Bitcoin.
How does Bitcoin work?
Bitcoin Cash (BCH) uses the same underlying technology as the Bitcoin block chain so it works quite similarly.
The blockchain of this currency also has a copy of the complete history of the transactions made. The nodes are the ones who approve if a new transaction is legitimate or not. When BCH is sent, nodes check to see if the sender has enough Bitcoin Cash to authorize the transaction.
When the nodes approve the legitimacy of the transaction, it will be added to a block by a miner . Because blocks can never be removed from the chain, this is a very important process. Every miner is a node, but every node is not necessarily a miner.
As with Bitcoin, to ensure that only honest entities are able to create a block full of transactions, creating one costs a great deal of computing power .
To fake any data on the chain, you'll need more than 50 percent of the total computing power. Something really impractical because it requires a lot of computational power, the cost of which would not be justified by the profit that can be obtained by falsifying that data.
BHC Mining
Taking into account that the cryptocurrency is a Hard Fork without major modifications, its mining is practically the same as that of the base cryptocurrency, Bitcoin . Both mining protocols use the same consensus, Proof of Work (PoW). Thanks to this, mining equipment for mining Bitcoin can be used for Bitcoin Cash with some modifications.
Initially, both mining were equally complex and unprofitable, however, as Bitcoin Cash turns out to be less attractive , the mining difficulty decreased by 20% when less than 6 blocks are found in 12 hours. In this way, less time and energy will be needed, increasing your profitability.
BHC Wallets
Like any cryptocurrency, to store it you will need a wallet, but not just any wallet, but one enabled for the cryptocurrency you want to store . There are several types of wallets, each with different characteristics that are better or worse suited to the needs of the user.
Among all the options that exist, the most secure, easy to use and compatible wallets with Bitcoin Cash is the Ledger Nano X Wallet . It is a secure hardware wallet compatible with more than a thousand tokens.
Another option is Trezor , a reliable and reputable hardware wallet with support for over 1,800 cryptocurrencies. Its price is around 50 or 60 USD.
You can also opt for wallets that can be adapted to computers and mobile phones, such as exodus, among others. Its interface is simple and it is one of the best to start in the world of cryptocurrencies.
Differences: Bitcoin Cash vs Bitcoin
Although one cryptocurrency comes from the other, which makes them really similar, it does not mean that they are exactly the same. Bitcoin and Bitcoin Cash have notable differences that are worth clarifying:
The main difference is the increase in the block size of Bitcoin Cash with respect to Bitcoin. Thanks to this, the transaction fees in Bitcoin Cash are much lower than in Bitcoin.
While the original cryptocurrency has a block size of 1MB, Bitcoin Cash has a block size of 32MB.
While BCH produces each block at 10-minute intervals and is certainly faster than Bitcoin, its network usage is also considerably less.
