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What is Bitcoin Cash?
Bitcoin Cash is a Bitcoin-style payment network that uses proof of work and focuses on keeping transactions faster and cheaper by increasing block capacity.
Category | Payment network and layer 1 blockchain |
|---|---|
Launch year | 2017 |
Consensus mechanism | Proof of work (PoW) |
Cryptographic hash | SHA-256 |
Max supply | 21,000,000 |
Circulating supply | Not provided in the supplied data |
Main use case | Payments and medium of exchange |
Official website | http://bch.info |
Platform on CoinMarketCap | BNB (BNB) |
Crypto markets move quickly and figures can change. For important decisions, double check the latest network and market details.
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What is Bitcoin Cash (BCH)?
We know Bitcoin, but what is Bitcoin Cash? Bitcoin, the first decentralized peer-to-peer network, emerged in January 2009. A transparent and decentralized network that aims to become a new financial network. But what happens when users of the network disagree about the developments after a certain period of time? Despite Bitcoin's popularity and its goal of replacing the current payment system, Bitcoin also has its limits. The blockchain of Bitcoin suffers from scalability issues and limited capacity. To solve this issue, Bitcoin Cash was created in 2017. Bitcoin Cash (BCH) is a hard fork of Bitcoin, it separated from the current blockchain. However, Bitcoin Cash also aims to fulfil Bitcoin‘s goal: to become a secure and decentralized payment system that is scalable for all its users, worldwide. How does Bitcoin Cash work? Bitcoin and Bitcoin cash are connected. In fact, until 2017, they were one blockchain. Yet, there is a significant difference between these two. Transactions are recorded in different blocks, which together form a blockchain. Minders add blocks to the blockchain to validate transactions and receive Bitcoin Cash as a reward. Exactly the same as Bitcoin. But how many transactions can the blockchain process? That depends on the block capacity. And this is where they differ from each other. Let‘s see how.
Bitcoin Cash a payment method
Both Bitcoin and Bitcoin Cash want to be a new payment method. No longer paying in euros or dollars, but in Bitcoin or Bitcoin Cash. But is this even possible on a large scale? Bitcoin has a capacity of 1MB. This means about 2,000 transactions per block, which translates to 3 to 7 transactions per second. To establish a global payment network, this capacity is too limited. This means that users would have to wait too long for their transaction to be approved. Bitcoin Cash on the other hand, has a capacity of 32MB, more than 1,000 transactions per second.
What is the difference between Bitcoin and Bitcoin Cash?
Bitcoin and Bitcoin Cash have the same goal in mind: to be a global and decentralized payment method. Essential is a scalable network in which transactions are processed quickly worldwide. With an original block size of 1 MB, this is not achievable. To solve this scalability problem, Bitcoin implemented the Lightning Network and SegWit. Processing data off-chain or reduce the size of transactions to increase the capacity. Bitcoin Cash on the other hand, decided to increase its block size; processing more transactions in the same amount of time. The difference between Bitcoin and Bitcoin Cash is different solutions to the scalability problem.
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Mining and proof of work, explained for beginners
In proof of work, miners compete to solve a computational puzzle. The winner gets to propose the next block of transactions. This competition makes it expensive to rewrite history, because an attacker would need to redo significant work to catch up. For users, that means transactions are recorded on a chain that is hard to tamper with. For BCH holders, mining connects to network security and transaction confirmation. It does not guarantee price, but it is part of how the network keeps a consistent ledger.
Why block size matters for payments
Block size is the maximum amount of transaction data that can fit into a block. When blocks are small and demand is high, transactions can queue up, and users may need to pay higher fees to get included sooner. Bitcoin Cash documentation highlights an increase from 1 MB to 8 MB. The intent is to allow more transactions per block, which can help the network handle busy periods. In real life, you will still see fees and confirmation times vary with demand, but the capacity design is a core part of BCH's payment focus.
Hard forks and what they mean for users
A hard fork is a protocol upgrade where the new rules are not compatible with old software. If participants do not upgrade, they may follow different chains. Bitcoin Cash is described as a hard fork of Bitcoin, and public materials also discuss hard fork based upgrades. This approach can be powerful because it can introduce significant changes, like block capacity. For users, the main practical point is to understand that network upgrades can affect wallets, exchanges, and how transactions are processed. When you hold BCH, you generally rely on the exchange or wallet to support the correct chain.
Common risks to keep in mind
First, price risk is real. BCH can move sharply because crypto markets react quickly to sentiment and liquidity. Second, operational risk matters. If you send to the wrong address or fall for scams, you can lose funds regardless of which blockchain is used. Third, regulatory risk can affect access. Legal classification and enforcement can change where and how people can trade or hold BCH. Finally, competition risk exists. Other networks may attract more developers or users, which can shift attention away from BCH even if the technology remains functional.
Understand Bitcoin Cash step by step
What is Bitcoin Cash?
If you want to learn about Bitcoin Cash, read all about it in the What is overview.
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