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Explanation of Bitcoin Cash... for normal people

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Written by   1183
7 months ago (Last updated: 2 weeks ago)

Bitcoin Cash is "you are your own bank" money. It exists solely on the Internet.

It's the money that nobody can print out of thin air destroying your savings.

It's the money that can't be taken away from you by anyone without you cooperating.

It's the money that you can hide in your brain.

It's the money that can be moved in billions in seconds for less than one US cent.

It's the money that nobody can forbid you to give to somebody via sanctions, border controls or banking rules.

Bitcoin Cash is definitely a revolution in money.

Why? Let's compare it to the most popular currency - the US Dollar.

Comparison to the US dollar in simple terms

Situation 1: QE/Inflation

Let's say you have saved $10'000 and put it into a bank.

Five years later the government comes in and says: "Hey, your bank is broke. You can't withdraw money from it anymore. Worry not, we have a plan - we will just start a 'QE' program, creating(printing) one billion new US dollars, we will give it to the bank and you can withdraw your money again."

Whew! Saved!

Right?..

Not so fast! The money that was created is a huge problem here.

The bank got the money. The bank won't give this money away, but rather will start "investing" it, for example by buying houses and apartments. The sellers of the houses will see that the houses are selling well and will start increasing prices until the bank doesn't feel like buying houses anymore.

What happened?

The government created (printed) new money and some time later the house prices rose.

What happens next?

The sellers of the houses got somewhat richer, so they can afford to spend somewhat more on other things, like groceries.

Suddenly, the grocery shops see that people can afford to spend a little more and start to increase the prices.

What happened? The government created new money and... some time later the groceries prices rose.

Now, the bread that you could have bought for $10 before, costs $11.

What happened to your savings?

You had $10'000 before and you have $10'000 now.

How many loafs of bread could your savings buy you before the creation of money? 1000 loafs of bread.

And after the creation of money? Only 909 loafs.

$10'000 / $10 = 1'000
$10'000 / $11 = 909.09

The money was created and suddenly you can afford less, therefore, even though you have the same amount of money - you are now poorer.

Creation of money creates the inflation most of the time (unless economy grows faster than money is created) which leads to you losing your savings.

Bitcoin Cash prevents this by having a predictable creation schedule. Nobody in the World can come in and say that tomorrow we'll have created a billion new Bitcoin Cash. It's impossible. Some very advanced math guarantees it.

Current new money creation schedule in Bitcoin Cash is about 4% new money per year and is about to become about 2% in mid-2020.

Situation #2: Withdrawing money from your bank

You have $50'000 in the bank. You come in and you tell the cashier that you want to take it home in cash.

Most of the time the cashier would tell you that you need to wait a few days.

But sometimes you'll stumble into a fact that you can't withdraw such big amounts at all. It happened to a lot of people in the US, the UK, all over the World.

You can move this amount between banks sometimes, but withdrawing is not always possible. You'll be given a lot of reasons, like the withdrawal being suspicious, needing an explanation of why you need such a big amount, etc...

The problem is that it's your money! You shouldn't ask for permission to use it. The bank just keeps it there. You must be able to withdraw it at all times.

(There are reasons why this happens and often the reason is that the bank doesn't have the money, due to something called "fractional reserve banking", which all banks do)

With regular money this situation is possible, with Bitcoin Cash this situation is impossible. You control your money at all times and nobody, except you, can move it. Not governments, not your bank, not your enemies (unless you cooperate).

Situation #3. Accepting money

Let's say you are a merchant (a shop) that wants to accept money.

You can of course, accept cash, that seemingly costs nothing, but there are associated processes that you need to do, like bringing your cash to the bank yourself or have the armed guards do that. This costs time and money.

For example: You need to deposit the daily cash receipts into the bank, but you have your employees do it. That employee must be paid for the time it takes for them to perform this business activity. There is also a chance that an employee steals from the till.

With Bitcoin Cash you can accept any number of transactions for free. If you want to put your money away into the "bank" (so-called "cold storage"), it costs less than one US cent and you don't need the armed guard, just a smartphone or sometimes even an usual SMS-capable phone will suffice.

You can accept credit cards, but it will cost you 3-4% of the amount and you'll get the money in about a week.

With Bitcoin Cash - accepting money is free and immediate. With big amounts you might decide to wait 10-20 minutes to be absolutely sure that the money is yours. For small amounts money arrives immediately.

Credit card payments can lead to fraud. A customer might leave and then do a chargeback.

With Bitcoin Cash all transactions are final and irreversible. As soon as you have your money (again, for big amounts it might be 10 minutes) - the customer can't take it away.

Situation #4. Moving money

Let's say you want to send your money to a friend that you met a few years back at a conference. He's from Some Asian Country. You'll find that sending money to Some Asian Country is impossible, because it's under some sanctions. It's your money. You must be able to give it to whomever you want.

With Bitcoin Cash this situation is impossible. You will always be able to give the money to anyone, anywhere.

Ok, let's say your friend is in the neighboring country. How much would it cost to send the money there? Usually it's about $20. How fast would it be? Probably about 3 workdays.

With Bitcoin Cash it's less than one US cent and immediate, in some cases the recipient of the money would need to wait about 10 minutes for the money to "settle" if the amount is big enough.

So, you've decided to bring your money to your friend anyway during your visit to a new conference. Your friend wants to start a new business and you want to bring $100'000 to him as an investor.

You're going to face a few problems. First, $100'000 is a big amount. You can be robbed on your journey. Second, you might face the problems with customs both in your own country and in the destination country. For example, if you don't declare the money properly - you might get the whole amount confiscated.

With Bitcoin Cash all you need to do is remember 12 words or store them somewhere safe online, so that you can access them upon arrival. As soon as you have these 12 words - you control your money again - nothing else is needed. So, now you can travel to other countries with billions... in your brain!

Situation #5. Opening a bank account

You just came to a new country. You want to open an account. But the bank tells you that it's impossible, because you don't have certain documents.

Or maybe you live in a country, where banking isn't even available to everybody, just like about a billion people live.

With Bitcoin Cash it's impossible. Everyone can open as many accounts as soon as he wants. Opening is immediate and nobody can prevent you from doing so.

Innovative nature

Bitcoin Cash is also programmable money. It can do things that regular money cannot. For example, you can send a specially constructed tip to a friend and if the friend doesn't claim the tip - you can take it back after some time. (This doesn't make the transaction reversible, if your friend takes the money - it's gone)

You can lock your money away from yourself for some time (to avoid spending it), if you want to.

You can allow your money to only be spent if two of your business partners agree that the money should be spent on something.

Wow! Is everything better about this magic Internet money?

Not quite. The good news is that all the troubles are temporary, even if they are going to take a few years to be sorted out, all the benefits are permanent.

Bitcoin Cash is absolutely usable now and secure, but at the time of this writing in 2019 Bitcoin Cash is just two years old, so not too many people know about it and use it.

Due to the relatively low popularity it has a few problems, which all are going to disappear once more people start to accept it.

Acceptance

Since Bitcoin Cash is young - it won't be accepted everywhere. There are thousands of places that accept Bitcoin Cash both online and offline and the numbers are increasing, but your local butcher probably haven't even heard of Bitcoin Cash.

You can see an incomplete list of major places accepting Bitcoin Cash here.

Exchange rate

Until Bitcoin Cash is accepted by more merchants, who can pay their vendors in Bitcoin Cash, thereby creating a closed economy, the exchange rate of Bitcoin Cash to local currencies like US Dollars is going to be dominated by day-traders on internet currency exchanges.

This means that the exchange rate of Bitcoin Cash to US Dollar and other national currencies can move up and down pretty fast.

This is both the good news and the bad news.

The bad news is that during the stable times in the economy sometimes you're going to see the exchange rate move downward, due to people preferring national currencies. This means that if you want to exchange your Bitcoin Cash to national currency later - you'll get less money than if you had exchanged earlier.

The good news is that in case of a major economy failure, you are going to see the exchange rate of Bitcoin Cash surge (get very high), thereby saving you from devastating effects of hyperinflation (=money losing value fast).

We see Bitcoin Cash as a hedge (a protection) against a catastrophic collapse of national currencies and national banking systems around the World, just like what happened in 2008. This has a very high chance of happening again ...and soon.

We didn't have Bitcoin Cash in 2008, so we don't know what would have happened. However, the common sense tells us that if one money can be created on a whim (national currencies) or is currently going through hyperinflation (where the prices might double or triple daily) and the other money is created slowly without creating inflation, people would flock to the second form of money immediately.

It might just so happen that after a major failure nobody would even want to leave the Bitcoin Cash and convert back, thereby creating a new economy. In that case, any people who had Bitcoin Cash before the collapse might become very rich. It will also mean that all the prices are going to be in Bitcoin Cash, thereby making exchange rate obsolete.

You can always exchange your local currency to Bitcoin Cash and back using local.bitcoin.com.

How does Bitcoin Cash relate to Bitcoin?

Bitcoin and Bitcoin Cash have a common history until 2017, but they are two different incompatible projects now.

Three biggest differences that you should know are:

  1. With Bitcoin, you can't sometimes know for sure how much to pay when you want to move Bitcoin.
    You can't sometimes know for sure how long it's going to take.

    The price that you need to pay when you need to move your Bitcoin Cash is always about $0.01 or less. The money arrives instantly, but if you transfer huge amounts of money - you might need to wait anywhere from 10 minutes to an hour to avoid a potential fraud (called "double-spending" - it's very expensive to do after about 10 minutes - see more details here if you are interested).

    With Bitcoin, due to the legacy design of the fee structure, you can expect to pay ten to thousand times more to move your money.

    In November 2017, the typical transaction fee (cost to move your money) reached $35 (that's just to move your money). That happens always when Bitcoin gets attention. Also, the waiting times for your transaction to be processed can be up to two weeks in Bitcoin sometimes. You can't predict when.

    There are none of those problems with Bitcoin Cash.

    At the peak of popularity in December 2018 Bitcoin has processed 490 thousands transactions in a single day and was fully congested (transactions taking weeks to finish, fee to move your money: $35+). Bitcoin Cash run a test in September 2018, where it has processed 2.1 million transactions and was not congested at any moment (transactions taking seconds to finish, fee to move your money: $0.01 or less).

  2. Bitcoin transactions are sometimes reversible (called "replace-by-fee"). A customer can send you a special transaction that he/she can take away from you especially during the popularity peaks of Bitcoin. You can a video here how easy it is to cheat merchants using "replace-by-fee" (note: "Bitcoin Core" referenced in the video is "Bitcoin".) This is an unacceptable risk for merchants.

  3. Bitcoin has stopped its technological advancement. Many new features that are available in Bitcoin Cash (such as privacy technologies CashShuffle and CashFusion, which prevent people from snooping what you are doing with your money, or non-custodial exchanges that can't steal your money, like local.bitcoin.com) required changes called "hard forks" that Bitcoin agreed to never do anymore. Therefore, Bitcoin doesn't have many of the things that make Bitcoin Cash great and doesn't even plan to implement it. These are just a few examples.

Bitcoin is sometimes referred to as "BTC".
Bitcoin Cash is sometimes referred to as "BCH".

Conclusion

Hopefully, after reading this, you now understand a bit about Bitcoin Cash and why we think it's revolutionary and brings you back the freedoms you should have had from the beginning. The freedom to use your money however you want.

We think that everybody should have at least some small amount of Bitcoin Cash. You can try to earn it by writing articles on read.cash or inviting other people to use read.cash. It's not a guaranteed way.

There are other ways, of course. You can simply buy it with local currency.

In the next parts (being written) we're going to try to use this new form of money, find out how to convert your national currency to Bitcoin Cash and back, how to accept it if you are a merchant and even a bit about how it works inside.

See you later.

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Written by   1183
7 months ago (Last updated: 2 weeks ago)
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Comments

good explanation, this can help people understand

$ 0.00
10 hours ago

Thanks for bitcoin cash😊😊 But i hope here in our country will increase the change of bch so that we have more earnings to receive😊😊 thanks a lot😊

$ 0.00
1 week ago

To a layman's understanding it's very easy to comprehend. Follow every bit of the information helped me to understand it both quantitatively and qualitatively,..This is a very nice article

$ 0.00
2 weeks ago

I try to figure out which info is still updated. If I send money with my bank it arrives at the same moment within my country, within Europe the same day too unless it's weekend.

Is this "With Bitcoin Cash - accepting money is free and immediate" still true? And what about sending? I only see fees. Might depend on the country and it's law. 🤔

$ 0.50
2 weeks ago

Here's the thing. As soon as you send Bitcoin Cash - it is sent, the receiver has it. Anywhere in the world, even in countries that are under sanctions (you can't for example send money to a friend in Iran). But there are a few problems with cryptocurrencies. One of them is double spending possibility. Basically, the sender can do a nasty trick that's very hard to pull, but possible, where he sends money to you and then immediately tries to send the same money back to himself. Sometimes (<1% of attempts with Bitcoin Cash) he suceeds. That's why exchanges and companies often wait for "confirmations". A confirmation is when a block happens. Basically a company that spent a lot of electricity PROVES that you own these coins. With each confirmation (happens approx. every 10 minutes) it gets progressively harder to pull off. After six confirmations it might be practically impossible to change. That's why if you're selling a Lamborhini it might be worthy to wait an hour for 6 confirmations, but if you're sending a $1 tip - there's no need to wait for anything, especially with Bitcoin Cash. That's why when I send you a tip of $1 - you get it immediately - as soon as I sent it. Each second that passes gives you more assurance that the coins are there.

Banks? They can double-spend too! Within a few weeks they can take the money you got and send it back without asking you! A chargeback can happen 3-6 months after you got money. It's impossible with Bitcoin Cash. After one hour practically NOBODY in the world, even country leaders can take your money away from you. That's why exchanges require confirmations and wait for about an hour. But again, after one hour with Bitcoin Cash - the money is only yours. After one hour with bank transfer - the bank can still take your money away from you. For months!

$ 0.00
2 weeks ago

Thank you for taking the time to explain this. Fee or not this is a way safer method. My granny would have liked it. She learned me to always check your bank account because too frequently money is "gone". I have experiences with dirty tricks of scammers and the only solution (the bank refused to help me) was to give up my account. Something I could do with a mouse click. I'll save your answer. Happy weekend. 🍀💕👍

$ 0.00
2 weeks ago

Yeah, I mean cryptocurrencies are hard and volatile, but they solve the main problem - control of your own money. This has never been previously possible with fiat money (Dollars, Euros, Pesos, Rupees, etc...), it was previously possible with gold, but it's really hard to transport gold and divide it... Cryptocurrencies solve that too. But the learning curve is steep. People need to understand many things to use cryptocurrencies effectively.

$ 0.00
2 weeks ago

I'm a Bitcoin Cash lover. I really choose BCH among the other crypto currency. Go up for BitcoinCash! Upvote to Bitcoin Cash!

$ 0.00
2 weeks ago

Great article

$ 0.00
2 weeks ago

Thanks @Read.Cash for upvoting my article (Ancient Greek) with $2 in BCH

$ 0.00
2 weeks ago

Well structured explanation and made simple for ordinary people that are new to understand the difference between Bitcoin and Bitcoin cash with variety of information on how such transactions take place. I like the way its explained. Well done and thumbs up for the good write up.

$ 0.00
1 month ago

@ Read.Cash Hello! Here is also a special case, I say I do not know; that everything increases incredibly without any apparent justification despite the fact that the government has not created new money in a long time, when merchants base the economy on the value of the US dollar that rises, rises, rises every day and does not stop. In this case BCH can be a solution avoiding the increase in products.

This is a google translation, I hope you understand what I'm trying to say.

$ 0.00
1 month ago

Well written learned a lot from the article about bitcoin cash.

$ 0.00
2 weeks ago

What do you mean by "for normal people", are those who have little or some other knowledge about it abnormal..?

Your context is great and would appreciate getting more of this to improve ourselves but you see that title.. that's not for me, cause I am abnormal. Keep the good work up..

$ 0.00
1 week ago

Even if the main idea of the article is not that, here is the better explanation of inflation effect that i ever see, thanks

$ 0.00
3 weeks ago

Will help alot for beginers. some of my article is this too. Hope they can read it too.

$ 0.00
1 week ago

Good explanation) However I would call it explanation for newbies, not for normal people. As we (as crypto-ethusiats in broad term) are normal people too! Moreover I'm sure soon it will be not normal to avoid using crypto.

$ 0.00
1 week ago

You read the title incorrectly, it's about the fact that most of the explanations are written for uber-geeks (blocks, hashes, digital signatures, mining process, inflation schedule - the stuff that only deeply technical people care about). That's why this one is for normal people.

$ 0.00
1 week ago

Yes, I said it's good explanation. I will bookmark this post to refer crypto-newcomers to it. I just meant that it's normal to be a geek)

$ 0.00
1 week ago

quality article. everything is concise, on the topic. very interesting.

$ 0.00
6 days ago

Semoga beruntung

$ 0.00
1 week ago

Nice article, the video just exposed me to things I don't know..thank you.. indeed bch is the future

$ 0.00
1 week ago

Nice and clear. Yesterday, on the beach, I tried to explain to someone how BCH works but I am not sure he understood it all. If I see him again today, I will provide him this link.

$ 0.00
1 week ago

thanks for sharing , i like to read and get new information

$ 0.00
1 week ago

Thanks for share THIS nice information about bitcoin clash..it help me lot to understand what bch is actuall... I have tried to invest on btc before but Don't did because i was afraid

$ 0.00
1 week ago

Personally I have zero investment in BTC and I wouldn't recommend it, because the fees are unpredictable https://bitcoinfees.cash/ I don't want to pay a few dollars each time I want to move my money. Bitcoin Cash solves it.

$ 0.00
1 week ago

Good post Thank you for such an informative post

$ 0.00
2 weeks ago

Your writing vision is very unique. Thank you very much for such helpful post. This article is about bitcoin. Thanks.

$ 0.00
3 weeks ago

That's a great idea. Nice idea for newbies.

$ 0.00
10 hours ago

Kudos to read.cash for sharing this golden information about BCH. This article is a real marketing tool for promoting BCH. The only thing I need from BCH ecosystem is wallets that can serve as savings account from which compound interest can be earned.

$ 0.00
1 month ago

So educating

$ 0.00
19 hours ago

Woaah. Amazing is it how read.cash is? Amazing really.

$ 0.00
3 days ago

Great Article

$ 0.00
1 month ago

Wow such a well expalin article about BCH . This is the first article i had read about bch with such a well explain lines. It quite lengthy but worth readung it

$ 0.00
1 month ago

Thank you very much for sharing such usedul information about bitcoin. Its very long article but i intent to read it lol

$ 0.00
1 month ago

I will try as much as possible to use this method of payment

$ 0.00
1 month ago

Güzel harika

$ 0.00
2 months ago

The article is really good, I loved the part you are explaining with simple examples about inflation I wish I could come up with examples like that when I'm debating something!

$ 0.10
7 months ago

Thank you!

$ 0.00
7 months ago

Very simple and understandable with this have got nothing to fear. Bravo to you.

$ 0.00
2 months ago

It's a very nice article. It explains Quantitative Easing and inflation in a layman's term. I also learned how Bitcoin Cash works. Thank you for the great insight!

$ 0.00
1 week ago

Plenty of Information on the article, and hard to assimilate In one day read😀 but awesome news there👌🎉

$ 0.00
5 months ago

Wow..such a good article. It's really helpfull to us. Thank you for sharing.

$ 0.00
1 month ago

Such a simple explanation, yet so useful. You're absolutely right about the inflation.

$ 0.50
5 months ago

Thanks!

$ 0.00
5 months ago

Good work

$ 0.00
1 month ago

Obviously am clearly overwhelmed with prospect of Bitcoin cash. However as much as i want to earn it, am equally concerned about exchanging it to my local currency when i need to or better if there is a considerable platform where i can invest my earned BCH

$ 0.00
1 month ago

Wow this is good

$ 0.00
1 month ago

good explanation, this can help people understand more about bitcoin

$ 0.00
1 week ago

Nice article!!

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7 months ago

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7 months ago
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7 months ago

Hi

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6 months ago

Hello

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1 month ago

Hi

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6 months ago

Such a useful articles presented

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3 weeks ago

Verry nice

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1 week ago