Bitcoin (BTC) is undoubtedly the most popular cryptocurrency in the world, but that doesn’t mean that it doesn’t have its share of critics–even among cryptocurrency users and enthusiasts. In fact, the early criticisms against Bitcoin lead to the development of an altcoin that claims to be more aligned with the original values that Bitcoin was designed for. This new cryptocurrency was named “Bitcoin Cash” (BCH), and was designed to be a faster and more scalable version than its namesake original.
So what did critics find wrong with Bitcoin? They pointed out that Bitcoin’s anonymous creator, Satoshi Nakomoto, intended Bitcoin to be used as a common mode of payment for goods and services and a better alternative to using traditional fiat money. However, what turned out was that people were using it as an investment vehicle and holding on to their bitcoins for years instead of spending it. They also pointed out that Bitcoin would not be able to “scale” as more and more people adopted its use, leading to network congestion. Thus, they concluded that some changes had to be made.
Making a “better” Bitcoin
However, the Bitcoin community was divided on the matter with many users opting to keep the network as it was. In the end, it was simply decided to retain the original Bitcoin programming and create a “fork” from which Bitcoin Cash would begin. As Bitcoin’s code was open-source, this only meant making some changes to the original protocol which would branch off into Bitcoin Cash’s own public ledger.
As a hard fork, Bitcoin Cash is still very similar in many ways to Bitcoin. Both BCH and BTC have a block time of 10 minutes (or the amount of time it takes miners to “mine” a block and add it to the “chain”) and they both only have a maximum supply of 21 million coins. Both Bitcoin and Bitcoin Cash’s halving time also happens every four years, wherein it becomes twice as hard to mine their coins and was designed that way to limit supply.
What developers improved upon however was with Bitcoin Cash’s block size. (Block size refers to the number of transactions that can be contained within each block.) With Bitcoin’s block size at only 1 MB, the network thus could only handle around 7 transactions per second (TPS). Developers increased Bitcoin Cash’s block size to 32 MB, which significantly increased the amount of network traffic that could be accommodated–by as much as 116 TPS.
What can BCH be used for?
With its network able to handle more transactions, BCH has more utility than BTC as digital money. BCH also has significantly lower transaction fees than Bitcoin (at less than a cent), making it more ideal for day-to-day payments and remittances.
As of July 2022, 19 million BCH coins have already been mined and are in circulation out of its maximum supply of 21 million. Its current market cap values the network at $2.7 billion.
Being exactly similar to Bitcoin in supply and halving rate, Bitcoin Cash is also a deflationary coin, and is generally expected to increase in value as new coins become more and more difficult to mine.
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