Bitcoin Cash: One of the largest cryptocurrencies to emerge from Bitcoin | Revix Blog

Arran Briceland

By 

Arran Briceland

Published 

November 11, 2022

Bitcoin Cash: One of the largest cryptocurrencies to emerge from Bitcoin | Revix Blog

Bitcoin was created in response to the 2008 Great Financial Crisis and the world's reliance on banks as financial transaction intermediaries.

The concept of Bitcoin as a peer-to-peer electronic cash that does not require an intermediary was a huge technological innovation, but in 2022 technology has changed, and Bitcoin has not. Despite having the highest market capitalisation, it is one of the slowest cryptocurrencies to transact with.

The size of blocks on the Bitcoin blockchain was a topic of discussion in 2017. Without getting too technical, the block size determines how many transactions a network can process in a given amount of time, and due to its small blocks, Bitcoin can only handle about seven transactions per second.

Some members of the Bitcoin community felt that this restricted Bitcoin's potential to scale and suggested changing the block size.

A disagreement over block size arose, causing a rift in the Bitcoin community, and Bitcoin Cash was born.

What is Bitcoin Cash? 

Bitcoin Cash was created in 2017 because its developers believe that the increased block size will allow the network to scale and bring sound money to the world, thereby fulfilling the original promise of Bitcoin as "Peer-to-Peer Electronic Cash". 

As a solution to improve upon Bitcoin's original workings, Bitcoin Cash tries to deliver fast payments, micro fees, privacy, and high transaction capacity. Bitcoin Cash aims to rival payment systems like Visa and PayPal with unrestricted growth, global adoption, permissionless innovation, and decentralised development.

The native cryptocurrency of Bitcoin Cash, BCH, is used for transaction fees and payments over the internet.

How does it work? 

Bitcoin Cash is a near-exact replica of Bitcoin. Transactions are verified via mining and a proof-of-work consensus process on its blockchain.

Since Bitcoin Cash employs the same SHA-256 hashing algorithm as Bitcoin, miners have the option of mining Bitcoin Cash instead of Bitcoin.

A few distinguishing features exist, such as:

Block size

Unlike Bitcoin, which can handle 7 transactions per second with a 1-megabyte block size, Bitcoin Cash can process over 100 transactions per second thanks to its 32-megabyte block size.

Difficulty adjustment

The difficulty adjustment mechanism implemented in Bitcoin Cash (BCH) is one of the primary distinctions between Bitcoin and Bitcoin Cash. A difficulty adjustment method is used because both networks utilise the same SHA-256 hashing algorithm and Bitcoin miners can switch to the Bitcoin Cash network when it becomes more profitable for them to mine on it.

By halving difficulty if blocks are behind schedule or tripling it if they are ahead of schedule, the difficulty adjustment algorithm makes sure that blocks are manufactured at a steady rate every 10 minutes.

The difficulty of mining a block on a certain blockchain is measured in cryptocurrency. A cryptocurrency with a high level of difficulty requires more processing power to authenticate transactions made on a blockchain.

Token issuance

Token scarcity is a cryptocurrency property that is highly appreciated. The monetary system for Bitcoin Cash remains the same as for Bitcoin.

On both Bitcoin and Bitcoin Cash, there will only ever be 21 million coins produced, and the number of new coins is reduced by half every 210,000 blocks (roughly every 4 years).

What makes Bitcoin Cash unique? 

Bitcoin cash combines scarcity with fast payments.

  1. Low-cost and near-instant payments

Bitcoin Cash allows you to send money anywhere in the world at a cost that is 640x

cheaper than Bitcoin. Not only does Bitcoin Cash have low transaction costs, but it also

processes over 10x more transactions per second than Bitcoin.

  1. Scarcity

The Bitcoin Cash protocol ensures there will never be more than 21 million coins in

existence. Bitcoin Cash currently has an inflation rate of 1.75%, which is scheduled to

halve every four years. With governments constantly printing money, resulting in

worldwide inflation, an asset with a fixed supply and a declining inflation rate makes for a

good store of value.

  1. Enhanced privacy

Bitcoin Cash offers more privacy and anonymity than traditional payment systems. Using

private payment tools, Bitcoin Cash offers various levels of privacy that Bitcoin cannot

provide.

Where can I invest in Bitcoin Cash?

Revix has added Bitcoin Cash to its cryptocurrency product offering. Adding to that, Revix will be running a promotion where customers can buy Bitcoin Cash without having to pay transaction fees up to the 17th of November 2022. That’s right, fee free Bitcoin Cash on Revix!

Invest in Bitcoin Cash here and start your journey with as little as R150. 

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