What is Bitcoin Cash (BCH)?

Introduction

Bitcoin Cash (BCH) is a cryptocurrency created in 2017 as a result of a hard fork from Bitcoin. Bitcoin Cash was designed to serve as "electronic cash" - enabling fast, low-cost peer-to-peer payments without intermediaries.

The fork occurred due to disagreements about how to scale Bitcoin. One camp favored off-chain solutions like the Lightning Network, while another preferred directly increasing the block size. Bitcoin Cash implemented larger blocks to enable more transactions directly on-chain.

History

By 2017, Bitcoin faced significant congestion with slow confirmations and high fees, conflicting with its original "peer-to-peer electronic cash" vision. The Bitcoin community split over the solution.

On August 1, 2017, Bitcoin's blockchain forked, creating Bitcoin Cash. All Bitcoin holders at the time received an equal amount of BCH.

Key Events

• August 2017: Bitcoin Cash created with 8MB blocks
• May 2018: Block size increased to 32MB
• November 2018: Fork into BCH and BSV (Bitcoin SV)
• May 2023: CashTokens upgrade for native tokens and NFTs

Key Figures

• Roger Ver: Major BCH advocate, owns Bitcoin.com
• Jihan Wu: Bitmain co-founder, provided mining support
• Amaury Séchet: Lead developer of Bitcoin ABC

Technology

Key Differences from Bitcoin

• Block Size: 32MB (vs Bitcoin's ~4MB with SegWit)
• Transaction Capacity: More transactions per block
• Fees: Typically fractions of a cent
• SegWit: Not implemented (philosophical opposition)

Consensus

Bitcoin Cash uses the same Proof of Work SHA-256 algorithm as Bitcoin, meaning miners can switch between the two. BCH uses a different difficulty adjustment algorithm (ASERT) for more stable block times.

CashTokens

The 2023 CashTokens upgrade enables native token creation (both fungible and NFT) directly on the BCH blockchain, expanding its capabilities toward DeFi and smart contract functionality.

Use Cases

• Payments: Fast, cheap transactions for everyday use
• Remittances: Low-cost international transfers
• Micropayments: Small transactions that are uneconomical on Bitcoin
• Tokens: Native token and NFT creation via CashTokens

Where to Buy Bitcoin Cash

Investment Considerations

Bitcoin Cash offers a different value proposition than Bitcoin - focusing on utility as a payment network rather than store of value. Its future depends on adoption for payments and the success of its expanding feature set.

Investors should consider the competitive landscape against both Bitcoin (for store of value) and other payment-focused cryptocurrencies, as well as the historical community splits.

Learn more in our crypto investing basics guide.