What is BCH? The cryptocurrency Bitcoin Cash (BCH) is a hard fork of Bitcoin (BTC). Just like Bitcoin, BCH is a virtual currency, which is managed decentrally by its community without the involvement of central banks and authorities. BCH was created to solve certain problems of BTC, such as low transaction speed. So, what is BCH? In our today’s article, we’ll try to find out!
What Is BCH Coin: How Was It Created?
What is BCH coin and how was it created? Well, long discussions about whether the size of transaction block should be adjusted took place in the Bitcoin community. Many participants stated that the block size of 1 MB prevented the rapid growth of the network.
In 2017, part of the Bitcoin community decided it was time to conduct a Bitcoin hard fork. So, what is BCH coin history of creation? Well, on August 1, 2017, Bitcoin Cash started as a standalone cryptocurrency and introduced new protocols that better suited the community’s expectations.
What Is BCH Cryptocurrency: Key Differences Between BTC & BCH
What is BCH cryptocurrency? Once you’ve found this out, let’s consider the key differences between Bitcoin Cash and Bitcoin for better understanding.
The size of blocks determines how much data can be stored in a single section of the blockchain. A single payment takes up minimal storage space and it wouldn’t be particularly efficient to process each transaction individually. The payments are therefore collected in blocks until such a block has reached the specified size. Only then the transactions are processed by the network.
If there are many transactions on a blockchain, there are accordingly many blocks that have to be processed by the network. As a result, a kind of ‘digital queue’ is created that contradicts the principle of fast transactions appreciated by many users. What is BCH cryptocurrency block size? Well, Bitcoin Cash was launched in 2017 with a block size of 8 MB.
The block size has never been the only limiting factor for the speed of transaction processing. Rather, the transaction speed is related to the fact that each block must first be validated by the network before it can be attached to the blockchain. The higher limit for block sizes means that more payment transactions can be processed per second.
Lower Energy Consumption
A major drawback of cryptocurrencies like Bitcoin is still their high energy consumption. A mechanism called Proof of Work (PoW) is used when creating new blocks for the blockchain through mining. It’s very computationally intensive and accordingly consumes a lot of energy. Since BCH blocks are larger, significantly more transactions can be processed per single mining operation. Which means lower energy consumption.
What Is Bitcoin Cash: BCH Pros & Cons
What is Bitcoin Cash main benefit? The biggest advantage of Bitcoin Cash is the speed of transactions. Thanks to this peculiarity, Bitcoin Cash was able to establish itself shortly after the hard fork. In addition, the transaction is less than a cent and is therefore significantly cheaper than that of other cryptocurrencies. Due to the high volatility of young cryptocurrencies, profits can be higher than with older coins such as Litecoin or Ethereum
However, volatility can also become a disadvantage. In addition to the higher profits, the risk can also increase. The rate isn’t very stable and thus can be strongly influenced. Overall, Bitcoin Cash is an advantageous cryptocurrency. More and more stores are including BCH in their payment methods thus ensuring the future of the coin.
What is Bitcoin Cash? What other interesting facts do you know? Feel free to share your knowledge in the comments!