After a discussion it with a read.cash user, I realized that many don't understand the difference between Bitcoin Cash and a fiat currency like USD or PHP. Many know only that Bitcoin Cash is a cryptocurrency, a digital currency, that you need a wallet for it and that you can trade with it on the exchanges.
What is fiat money?
To understand the difference, one must first properly understand what a fiat currency is. The first misunderstanding starts with the fact that many think that currencies such as USD, EUR or PHP are backed by gold, oil or other goods. But that's not true. The fiat currencies are not backed by anything. It used to be that way, but it was lifted in 1976 at the latest. Everyone can read it here:
In reality, the fiat money is created out of thin air at the banks (especially central banks, but also private banks). This money is lent to other banks, companies, governments or private individuals in the form of loans. You can read more about this here.
Because this article is quite complicated and maybe not everyone can understand it, to simplify matters, one can say that fiat money is nothing other than debt. The money that you have in your account, or as a banknote, is nothing more than the debt of someone who has taken out a loan.
What's the problem with the fiat money? There is very, very much of it because there is so much debt. There are many countries that are very indebted. USA is very indebted, many countries in Europe are very indebted, Japan is very indebted. Countries have to repay the debt, but they don't have the money to do it. So what are they doing? They take on new debts to pay off old debts. This is called a debt spiral. The result: more and more fiat money is being created.
Such phenomena have happened many times in human history. Most of the time, they end in hyperinflation and creating a new monetary order. The old money is largely declared invalid. The government can void the money overnight (it happens without notice, of course, so people don't immediately spend the old money as long as it is worth something)
Will it happen this time? Nobody knows, but it is likely.
What is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency that was developed as an alternative currency by Satoshi Nakamoto in 2009 (at that time still under the name Bitcoin) in response to the 2008 financial crisis. In 2008, the world was on the verge of a financial collapse. With money, everything is based on trust. In 2008 the banks lost confidence in each other because each bank feared that another bank would be insolvent. Many banks were no longer able to act because they could not borrow money. You have to know that no bank has as much money as is deposited in the customer's accounts. If all customers want to withdraw their money at once (so-called bank run), every bank is broke in no time. That is why Satoshi had a brilliant idea to develop money that is independent of governments and central banks and is crisis-resistant.
Bitcoin Cash is not created by the central bank or governments, but by miners. And best of all, anyone can become a miner. Everyone can create their own Bitcoin Cash. In the past you could do it with your own computer. Today you have to join a miner's pool.
The software that creates Bitcoin Cash ensures that only 6.25 BCH are created per block. In the beginning it was 50, later 25, then 12.5. In the future, fewer and fewer BCHs will be created per block. This ensures that the amount of Bitcoin Cash does not grow uncontrollably. So it is different from fiat, where more and more are created. Each block is created every 10 minutes on average.
You don't need a bank that can go broke to store Bitcoin Cash. All you have to do is write down your seed. That's all. To make a transaction you only need a wallet. I have described how a Bitcoin Cash wallet works here. Nobody can take away or invalidate your Bitcoin Cash. A government can ban exchanges but it is absolutely unthinkable that all governments in the world ban exchanges. There is also https://local.bitcoin.com that nobody can forbid. You need only internet access and a device.
Why BCH and not BTC?
Why do I write that Bitcoin Cash BCH and no longer Bitcoin BTC is the cryptocurrency that can serve as an alternative world currency? Unfortunately, the developers of the Bitcoin Core software decided to keep the Bitcoin BTC block size at 1MB. Bitcoin BTC can only process 6 transactions per second. That is far too little. Some transactions are already waiting weeks for confirmation. That means you have to wait weeks for the money. How is it supposed to work when there really should be a lot of people using BTC? The Bitcoin Core developer are probably not interested in developing Bitcoin in the sense of Satoshi Nakamoto. They have created a speculative asset. That's why Bitcoin was forked and so I no longer use BTC.
Note: I have deliberately made a lot of things very simplified so that the article is understandable for as many users as possible
I have so much things to know about the crytocurrency world. Its quite complicated for me as a beginner, but with this article I gained information. Thanks!