What is Bitcoin Cash? What's the Difference Between Bitcoin and Bitcoin Cash?
What is Bitcoin Cash?
1.1. Definition of Bitcoin Cash
Bitcoin Cash emerged in August 2017 as a result of a hard fork in the Bitcoin (BTC) blockchain. A hard fork essentially splits a blockchain into two, with each part becoming a cryptocurrency with its own unique blockchain.
1.2. History of Bitcoin Cash
Around May 2017, the transaction price of each Bitcoin was above $8,000, accompanied by the rapid development of the Bitcoin network. However, due to Bitcoin's 1MB block size, it couldn't handle large transaction volumes, leading to congestion and long waiting times. Consequently, a hard fork was proposed.
How Are Bitcoin and Bitcoin Cash Different?
Below are the comparative criteria between Bitcoin and Bitcoin Cash:
2.1. Block Size
The fundamental difference between Bitcoin and Bitcoin Cash lies in their block sizes. While Bitcoin has a very small block size (1MB), Bitcoin Cash debuted with an 8MB block size which can be upgraded to 32MB.
2.2. Mining Difficulty
A larger block size means more computational power is required to mine them, resulting in higher costs. However, this also translates to more opportunities for miners to earn transaction fees. Due to the lower value of Bitcoin Cash compared to Bitcoin, its mining difficulty needs to be kept lower to attract miners, facilitated by Emergency Difficulty Adjustment (EDA) algorithm.
2.3. Mining Speed
Bitcoin often faces congestion and high transaction fees during peak times due to its smaller block size and high transaction volume. Thanks to its smaller size, Bitcoin Cash generally confirms transactions faster with lower fees compared to Bitcoin, especially during periods of significant growth.
How to Mine Bitcoin Cash?
3.1. Mining Bitcoin Cash
Similar to Bitcoin, Bitcoin Cash utilizes the SHA-256 algorithm, allowing miners to mine it using CPUs, GPUs, or ASIC miners.
Currently, two popular methods of mining Bitcoin Cash are solo mining and mining through reputable Bitcoin Cash mining pools.
3.2. Secure Bitcoin Cash Storage Wallets
Investors can store Bitcoin Cash in recommended wallets such as Bitcoin.com Wallet, Yenom, and Electron Cash. Additionally, various hardware wallets, applications, and paper wallets also support Bitcoin Cash storage.
3.3. Bitcoin Cash Exchanges
Apart from wallets, investors can store Bitcoin Cash on reputable exchanges for convenient trading. Bitcoin Cash is traded on major cryptocurrency exchanges like Coinbase, Binance, and OKX.
Future Predictions for Bitcoin Cash
Predicting the future of any cryptocurrency, including Bitcoin Cash (BCH), is challenging and uncertain. However, investors and enthusiasts can consider certain factors when assessing Bitcoin Cash's prospects:
Bitcoin Cash is built on Bitcoin's technology but with significant improvements, offering faster transaction speeds and lower fees.
4.2. Mining Profitability
Mining BCH is currently more profitable than mining Bitcoin, attracting miners and strengthening the BCH network.
4.3. Widening Acceptance
Efforts are underway to increase Bitcoin Cash's acceptance in online payment systems, with notable support from BitPay, leading to increased usage.
4.4. Infrastructure Development
Various infrastructure development projects, such as wallet support and tipping bots, are enhancing Bitcoin Cash's ecosystem.
In conclusion, while Bitcoin Cash offers faster transactions than Bitcoin, its centralized mining poses a significant concern. Despite this, it remains a focus for miners, especially with the upcoming halving events for both Bitcoin Cash and Bitcoin, leading to certain price increases.