Bitcoin Cash is the result of a hard fork of the Bitcoin blockchain, undertaken earlier this month by a bunch of disgruntled Bitcoin programmers and users from around the world.
In a nutshell, Bitcoin Cash refuses to embrace the sole function of Bitcoin as a store of value: in the vision of Roger Ver and his supporters, HODLing is a vice and crypto-currencies should be spent on goods and services, as it is a P2P cash system after all.
The main change for BCH were the bigger (8MB) block sizes which increase the number of transactions that can be made in one block - which consequently reduces the fees. There is nothing wrong with this approach and some may argue that it contributes to a speedier adoption of cryptocurrencies in the financial system and international markets. Lower transaction fees are an incentive to actually fulfil the “peer to peer cash” purpose that Satoshi Nakamoto presented in the whitepaper.
Roger Ver was a strong advocate of the controversial New York Agreement, and opposed the time and resources-consuming SegWit and Lightning Network. The development and implementation costs were deemed too high, the testing would require an indefinite amount of time, and the original vision of Satoshi Nakamoto never mentioned such scaling solutions.
In the short term it was so much easier to increase the block size. This meant that the new coin would be supported by a more centralized network which meets the technical scaling requirements but places slightly more power and profit in the hands of miners.
The very first block of Bitcoin Cash was mined by a Beijing-based group called ViaBTC on August 1st, 2017 and, contained 6,985 transactions with a total block size of 1.915MB, which is nearly double the limit imposed by the original Bitcoin chain.
Over the past months, the world’s newest cryptocurrency has gone from strength to strength, with a total market-cap that now stands at over $10 billion. Each Bitcoin Cash token is worth about $650 as of press-time, although, both those figures represent a decline of over 30% from their all-time highs last week.
Being a fork of Bitcoin, you’d expect many of the features of Bitcoin Cash to be similar to that of the parent currency, and they are, but there are also some significant differences.
First off, while block sizes on the Bitcoin blockchain are restricted to just the 1MB, each block on the Bitcoin Cash blockchain can have up to 8MB of data, which, according to the developers behind the fork, will remove the artificially-created bottlenecks, thereby improving transaction times. The new currency is also expected to reduce average fee costs going forward.
Whether or not the Lightning Network will succeed and solve all the scaling issues is something that remains to be seen. But for now, if you really care about using the Bitcoin version which has the lowest transaction fees and the most accessible interface, then you may go for Bitcoin Cash.
Then again, Bitcoin Cash isn’t much different from Litecoin or many other alts in technical terms, and some may argue that Charlie Leeʼs coin is much more secure against 51% attacks and has lower fees thanks to SegWit.
Competition is always healthy for growth, this is an open source market where anyone can start a new coin, but that doesn’t make the gospel approach to the whitepaper and the appropriation of the name alright. Bitcoin Cash can be recognized for its technological virtues but will never be the real Bitcoin, nor will it replace it.