When we talk of cryptocurrency, bitcoin is the first name that comes up. Since it is the first and oldest cryptocurrency to come into existence in 2009, bitcoin since then has branched out in various forms, one of which is bitcoin cash. So, what is bitcoin cash exactly and how does it work? Let’s find out.
Bitcoin Cash Explained
Bitcoin Cash, also known as BCH, is a proof-of-work blockchain network and cryptocurrency that is both more convenient and less expensive to use than its predecessor, Bitcoin (BTC). Since its inception as a result of a controversial split in the Bitcoin blockchain network, the asset in question has grown its own community of users. As was the case with its forerunner, Bitcoin Cash is recognized by a subset of businesses, can be purchased using PayPal, and stands as an alternative means of exchanging value. BCH was developed with the intention of resolving many of Bitcoin’s problems; however, the implementation of bitcoin cash caused opposing opinions within the cryptocurrency community. Even though it is possible for the two to readily coexist, there is much debate on which one will be the more valuable asset in the future.
How does it work?
Bitcoin Cash functions in the same way that Bitcoin does from a technological standpoint. Both Bitcoin Cash and Bitcoin employ a Proof-of-Work consensus mechanism, requiring nodes to verify transactions, and have a hard limit of 21 million assets. Bitcoin Cash also uses nodes. Miners verify the legitimacy of transactions using the processing power of their computers and are then paid with Bitcoin Cash (BCH) for their efforts.
However, because of its increased block size, Bitcoin Cash (BCH) functions at a higher speed and has lower transaction fees than its predecessor. Bitcoin Cash, on the other hand, is compatible with smart contracts and applications like CashShuffle and CashFusion. CashShuffle is a currency mixing protocol that shuffles your Bitcoin Cash with the Bitcoin Cash of other holders prior to a transaction. CashShuffle is available to holders of Bitcoin Cash who use particular wallets. Because of this, your transactions will be kept secret, and it will be much more difficult to track them down, given that the Bitcoin Cash ledger is public.
However, the mixing of coins is not a foolproof method. To begin, it is necessary for consumers to trust a third-party service, which is a little amusing given that crypto is intended to be anonymous or decentralized. Mixing might come with a price tag, which is not suitable for those who do business often. Authorities in a number of different countries have taken action against bitcoin mixers on the grounds that the cash entering such platforms is often acquired via unethical or illegal means.
Instead of combining your Bitcoin Cash transaction with those of other users, CashFusion combines it with the Bitcoin Cash transactions of all other CashFusion users into a single huge transaction. After that, it will transfer that BCH back to your wallet, but your transaction will have been jumbled up and blended with a large number of other transactions, such that (hopefully) no one will be able to follow a trail back to your holdings. BCH has been the impetus for hundreds of protocols and other initiatives that aim to broaden the use of the technology and make it more available to everyone.
Bitcoin Cash is capable of supporting 25,000 transactions per block, while Bitcoin can only allow 1,000 to 1,500 transactions per block. The increase in block size, from 1 megabyte to 8 megabytes, was sufficient to generate a following. As a consequence of this, Bitcoin Cash (BCH) is now ranked in the top 20 cryptocurrencies and is among the most popular Bitcoin forks available. Since that time, the block size for Bitcoin Cash has increased to 32 megabytes.
Bitcoin Cash is clearly carving itself a future-oriented niche in the cryptocurrency sector. Even though Bitcoin is the most well-known cryptocurrency, BCH will likely get a lot of attention as more companies begin to accept it. After all, BCH is undoubtedly a faster and less expensive network. Litecoin (LTC), which often ranks towards the top of the market cap list for Bitcoin Cash, is one of numerous projects that compete with it. Nonetheless, Litecoin differs from Bitcoin Cash in that it has its own set of perks and drawbacks. It all boils down to which platform best fulfills the needs of a certain user and which platform delivers the features that the general public will find most attractive.
Cryptocurrency is a vast field and new terms and concepts are cropping up everyday. To stay on top of things in the crypto world, read some of the best crypto blogs and find out what’s new.