Bitcoin cash cryptocurrency

Keep in mind that Visa processes 24, transactions per second as of late As more users adopted Bitcoin, the network essentially bottlenecked. Bitcoin started to encounter its scaling problem around and two camps emerged to address it: those who favored small-block solutions, and those who favored large-block solutions. Simply put: Big blocks are faster, but sacrifice decentralization because fewer nodes are able to process large blocks. Small blocks are slower, but maintain the key advantages of decentralization and security because more nodes can join and maintain the network.

Speed and decentralization essentially exist on a spectrum, so the more you have of one, the less you have of the other. With increased network traffic, even proponents of small block solutions recognized the need for at least some increase in processing speed. The solution small block proponents put forward is a process known as Segregated Witness SegWit.

It functions by removing signature data from Bitcoin transactions. A new block added to the Bitcoin network contains transaction data and digital signature data about the origin and destination of bitcoin BTC in each transaction. SegWit does exactly what the name implies — it segregates the witness the digital signature from the transaction data.

Essentially, it rearranges the data in any given block more efficiently. SegWit basically allows for double the block size approximately 2MB per block. SegWit is what is known as a soft fork, rather than a hard fork , and thus each node on the network could choose whether or not to adopt the new set of rules. Thus it only minimally increases the overall transaction speed of the Bitcoin ecosystem.

It is technically and structurally very similar to Bitcoin, but with one major difference: block size. As a response to the deficiency they saw in SegWit, Bitcoin Cash was created and designed to pack 8MB of data into each block and to process transactions per second on average. While transaction speed is greatly increased with BCH, the larger block size also requires more processing power for nodes to support the blockchain network. So why not just make the blocks much bigger — say MB?

That would make the network much faster, but extremely restrictive in terms of who could run a node, verify new blocks on the blockchain, and support the network. The debate about block size essentially boils down to speed versus decentralization and which of the two is more desirable. It is considered a 'fork' of Bitcoin, although proponents argue that Bitcoin Cash more closely adheres to the original vision of creating a peer-to-peer electronic cash system as laid out in a white paper written by the founder of the protocol, a person or group going by the pseudonym Satoshi Nakamoto.

Table of Contents What is Bitcoin Cash used for? Is Bitcoin Cash different from Bitcoin? What's the difference between Bitcoin and Bitcoin Cash? Bitcoin Cash's core features Bitcoin Cash is a decentralized peer-to-peer electronic cash system that does not rely on any central authority like a government or financial institution. As such, it represents a fundamental redesign of the very nature of money.

The core features of Bitcoin Cash are: Open to anyone. Nobody controls or owns Bitcoin Cash. There's no CEO, and you don't need to ask for permission to use it. Identities are not tied to transactions. This helps to ensure that Bitcoin Cash remains free to be used by anyone, without censorship. All transactions are recorded on a global public ledger called the blockchain. The ledger is updated at regular intervals in blocks that are connected to form a chain.

This allows anyone to easily see the full history of ownership, and helps to eliminate the potential for fraud. The public ledger blockchain is stored voluntarily by a network of participants known as 'nodes. Nodes follow a set of rules a protocol to achieve consensus on the state of the ledger. This consensus is what constitutes the 'truth' as to who owns what. The protocol, however, can evolve as participants demand - although there is high-degree of consensus required to make changes.

This makes Bitcoin Cash a quasi-political system, with participants forming a kind of social contract. The technology deployed means that, once recorded in the blockchain, transactions effectively cannot be altered. Through a process known as Proof of Work PoW , 'miners' compete to add new blocks to the chain that constitutes the ledger again, the blockchain. The hardware and energy costs associated with PoW mining contribute to the security of the network along game-theory driven principles such that attacking the network is both prohibitively expensive and guarantees the attacker cannot profit directly.

Fixed supply. Only 21 million coins will ever be created. This makes Bitcoin Cash a hard asset, like land or gold, providing an opportunity for people to store value in digital realm over long periods of time. Low Fees. Bitcoin Cash enables reliable, fast, and affordable transactions of any value and regardless of location including cross-border transactions. This makes it an effective alternative to payment networks like Visa and Mastercard.

What is Bitcoin Cash used for? Bitcoin Cash's above-described core features make it both a long-term store of value and a highly effective medium of exchange. More philosophically, these two use cases combine with the decentralized and open nature of the protocol to make Bitcoin Cash the network a method for supporting and enhancing global economic freedom. Long-term store of value The total supply of Bitcoin Cash will never exceed 21 million coins.

This is written into the code that defines the Bitcoin Cash protocol. As a decentralized network, Bitcoin Cash users ultimately decide how the protocol evolves - and since it is not in the interests of participants to dilute their holdings by changing the protocol, the million-coin limit will almost certainly remain in place forever. The rate that new coins are added to the circulating supply gradually decreases along a defined schedule that is also built into the code.

The issuance rate is cut in half approximately every four years. This makes Bitcoin Cash a 'disinflationary' asset. In April , the third 'halving' reduced the issuance rate from At that point 18,, of the 21 million coins The fourth halving, in , will reduce the issuance to 3. Bitcoin Cash's 'set-in-stone' supply schedule makes it unique among hard assets.

By comparison, the supply of gold, although limited, is nevertheless subject to the forces of supply and demand. As the price of gold rises, more gold miners are incentivized to search for gold. The leads to an increase in the supply of gold, which places downward pressure on the price.

Highly effective medium of exchange Bitcoin Cash enables peer-to-peer payments between individuals - just like cash, but in the digital realm. Critically, fees for sending Bitcoin Cash typically amount to less than a penny per transaction, and settlement occurs near instantly, regardless of the physical location of participants.

This makes Bitcoin Cash useful for not only remittances and cross-border trade, but also for daily transactions like buying groceries. Since the fees and transaction times are so low, Bitcoin Cash is also effective for micro-transaction use cases like tipping content creators and rewarding app users.

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This means that its blockchain can host many more people to process their transactions at any given time, and because of this, Bitcoin cash is quickly rising to become way more adopted daily. Nowadays in the crypto world, Bitcoin Cash hash wars are becoming more common as there are several groups currently operating within the BCH community.

This eases the way for adoption and also the investment potential of this cryptocurrency is increased. Bitcoin Cash is based on a technology that is highly efficient and established and consumers can use it freely as its efficiency surpasses that of Bitcoin.

Bitcoin miners have encountered problems in the scaling of Bitcoin for many years, and it was brought to a head because of its rise in popularity. People who were trading Bitcoin at the time expressed frustration with the fact that they were facing long approval times that were only increasing, and if they wanted to make this process faster, they were required to pay additional fees.

Within the Bitcoin community, there was ongoing disagreement on the method of solving these issues as some miners were considering implementing a scaling tool called SegWit2x, others were in favor of expanding the block size, as they believed this method clashed with the spirit of the cryptocurrency. Takeaways Bitcoin Cash is known as an offshoot of bitcoin. Bitcoin Cash is able to process more transactions per block, by increasing the size of blocks to between 8 MB and 32 MB.

Unlike the other merchants, Bitcoin Cash makes it possible for you to experience no waiting time anymore as The Bitcoin Cash block in the blockchain is eight times bigger than that of Bitcoin. This helps to ensure that Bitcoin Cash remains free to be used by anyone, without censorship. All transactions are recorded on a global public ledger called the blockchain. The ledger is updated at regular intervals in blocks that are connected to form a chain.

This allows anyone to easily see the full history of ownership, and helps to eliminate the potential for fraud. The public ledger blockchain is stored voluntarily by a network of participants known as 'nodes. Nodes follow a set of rules a protocol to achieve consensus on the state of the ledger. This consensus is what constitutes the 'truth' as to who owns what.

The protocol, however, can evolve as participants demand - although there is high-degree of consensus required to make changes. This makes Bitcoin Cash a quasi-political system, with participants forming a kind of social contract.

The technology deployed means that, once recorded in the blockchain, transactions effectively cannot be altered. Through a process known as Proof of Work PoW , 'miners' compete to add new blocks to the chain that constitutes the ledger again, the blockchain.

The hardware and energy costs associated with PoW mining contribute to the security of the network along game-theory driven principles such that attacking the network is both prohibitively expensive and guarantees the attacker cannot profit directly. Fixed supply. Only 21 million coins will ever be created. This makes Bitcoin Cash a hard asset, like land or gold, providing an opportunity for people to store value in digital realm over long periods of time.

Low Fees. Bitcoin Cash enables reliable, fast, and affordable transactions of any value and regardless of location including cross-border transactions. This makes it an effective alternative to payment networks like Visa and Mastercard.

What is Bitcoin Cash used for? Bitcoin Cash's above-described core features make it both a long-term store of value and a highly effective medium of exchange. More philosophically, these two use cases combine with the decentralized and open nature of the protocol to make Bitcoin Cash the network a method for supporting and enhancing global economic freedom.

Long-term store of value The total supply of Bitcoin Cash will never exceed 21 million coins. This is written into the code that defines the Bitcoin Cash protocol. As a decentralized network, Bitcoin Cash users ultimately decide how the protocol evolves - and since it is not in the interests of participants to dilute their holdings by changing the protocol, the million-coin limit will almost certainly remain in place forever.

The rate that new coins are added to the circulating supply gradually decreases along a defined schedule that is also built into the code. The issuance rate is cut in half approximately every four years. This makes Bitcoin Cash a 'disinflationary' asset. In April , the third 'halving' reduced the issuance rate from At that point 18,, of the 21 million coins The fourth halving, in , will reduce the issuance to 3. Bitcoin Cash's 'set-in-stone' supply schedule makes it unique among hard assets.

By comparison, the supply of gold, although limited, is nevertheless subject to the forces of supply and demand. As the price of gold rises, more gold miners are incentivized to search for gold. The leads to an increase in the supply of gold, which places downward pressure on the price. Highly effective medium of exchange Bitcoin Cash enables peer-to-peer payments between individuals - just like cash, but in the digital realm.

Critically, fees for sending Bitcoin Cash typically amount to less than a penny per transaction, and settlement occurs near instantly, regardless of the physical location of participants. This makes Bitcoin Cash useful for not only remittances and cross-border trade, but also for daily transactions like buying groceries.

Since the fees and transaction times are so low, Bitcoin Cash is also effective for micro-transaction use cases like tipping content creators and rewarding app users. Economic freedom Economic freedom is the ability for individuals to freely acquire and use personal resources however they choose, both independently and in cooperation with others. It is a vital component of human dignity and a fundamental human right. Money - as a vehicle that can be used for both storing and exchanging value - is a central tool for enabling economic freedom.

Bitcoin Cash provides, on an opt-in basis, an alternative form of money that supports economic freedom. Unlike national currencies, Bitcoin Cash integrates strong protection against 1 monetary confiscation, 2 censorship, and 3 devaluation through uncapped inflation. Bitcoin Cash is considered a 'fork' of Bitcoin. It was created on August 1 after participants in the Bitcoin ecosystem were unable to agree on methods for scaling the cryptocurrency. The main point of contention was 'block size,' which is relevant for the volume of transactions that can be processed per second aka the 'throughput'.

Since transactions consist of data, a larger block size enables more transactions to be included in each block, resulting in a higher throughput. The Bitcoin protocol had for years limited the size of each block to 1MB.

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Bitcoin Cash is a peer-to-peer electronic cash system that aims to become sound global money with fast payments, micro fees, privacy, and high transaction capacity big blocks. In the same way that physical money, such as a dollar bill, is handed directly to the person being paid, Bitcoin Cash payments are sent directly from one person to another.

As a permissionless, decentralized cryptocurrency, Bitcoin Cash requires no trusted third parties and no central bank. Unlike traditional fiat money, Bitcoin Cash does not depend on monetary middlemen such as banks and payment processors. Transactions cannot be censored by governments or other centralized corporations. Similarly, funds cannot be seized or frozen — because financial third parties have no control over the Bitcoin Cash network.

Bitcoin Cash is a clear result of a hard fork in blockchain. There are several distinctive features that separate BCH from the origin. The main one remains about the block size. Blocks in the BCH blockchain can be larger, which means that more transactions can be processed at a time, so that the additional space helps to avoid higher fees.

From the technical perspective, Bitcoin Cash is very similar to the Bitcoin algorithm, namely: both projects have a hard cap of 21 million coins, and also use Proof-of-Work PoW consensus framework and nodes to verify transactions. Thus, traders can consider BCH as a hedging tool, investing in which may save them some risk.

On the plus side, due to the larger block size, Bitcoin Cash BCH works faster and has lower transaction fees, which makes BCH a better option for small everyday transactions. Furthermore, Bitcoin Cash supports smart contracts and ecosystem apps like CashShuffle, a coin mixing protocol, and CashFusion, a privacy-enhancing solution for the Bitcoin Cash network. These technologies have their pros and cons: thanks to CashFusion, it becomes extremely difficult to trace the path to the user's assets, however one should bear in mind that commissions are charged for each mixing, so making frequent mixed transactions may have a cost.

This means that Bitcoin Cash is suitable for money transfers, international trade, everyday transactions and microtransactions. In addition, Bitcoin Cash supports economic freedoms by providing an alternative form of money, protected against confiscation, any other forms of censorship and devaluation due to inflation. Bitcoin Cash is a decentralized network where users influence the development of the protocol. One key attribute is fixed in the code: the maximum supply of BCH is capped at 21 million coins, which is likely to remain so.

Therefore, the key features of Bitcoin Cash include the following: Transactions are recorded on the blockchain, the ledger is updated at regular intervals, which allows users to track the history of ownership and eliminate fraud threats promptly. Bitcoin Cash is an open network that can be used by anyone for free and uncensored, identities are not attached to transactions. Nodes that follow a set of rules aka protocol are responsible for the longevity of stored information. The protocol itself can be upgraded with the help of ecosystem participants, but that requires a high degree of consensus among them.

All transactions that have ever been recorded on the blockchain are not subject to change. The Proof-of-Work PoW mechanism contributes to network security. Bitcoin Cash guarantees its users fast, affordable, and most importantly - reliable transactions without being tied to any location, which makes it a worthy replacement for existing payment networks.

What Is Bitcoin Cash Used for? Bitcoin Cash combines gold-like scarcity with the spendable nature of cash. With a limited total supply of 21 million coins, Bitcoin Cash is provably scarce and, like physical cash, can be easily spent. Transactions are fast with transaction fees typically less than a tenth of a cent. Anybody can accept Bitcoin Cash payments with a smartphone or computer.

Bitcoin Cash has various use cases. The first implementation of the software was proposed under the name Bitcoin ABC at a conference that month. In July Roger Ver and others stated they felt that adopting BIP 91 that would later activate SegWit favored people who wanted to treat bitcoin as a digital investment rather than as a transactional currency.

A Hong Kong newspaper likened this to a new version of word processing software saying: [19] Bitcoin cash is like a new version of Microsoft Word , which generates documents that can no longer be opened via the older versions. At the time of the fork anyone owning bitcoin came into possession of the same number of Bitcoin Cash units.

Fields notified the development team about it, and the bug was fixed. A lot of this debate is now more about hurt feelings. Andreas Antonopoulos , "The Verge" In there were two factions of Bitcoin supporters: those that supported large blocks and those who preferred small blocks.

But in this particular case, everybody is not agreeing. The proof of work algorithm used is the same in both cases. It can be described as a partial inversion of a hash function.