What is Bitcoin Cash (BCH)?
In simple terms, it’s an online currency formed out of a dispute between Bitcoin (BTC) miners and developers. Now, that doesn’t mean it’s a poor imitation of the original cryptocurrency. In fact, when you really ask the question “what is Bitcoin Cash about”, you’ll see why it’s a strong crypto in its own right.
Perhaps one of its greatest strengths is that it’s universal. Unlike many modern utility tokens that focus on one particular market, BCH as a currency token, is for everyone. Therefore, if you’re interested in how to get Bitcoin Cash and why it might be a positive investment, the following guide is for you.
Some key takeaways for Bitcoin Cash:
- BCH was formed out of a hard fork on the original Bitcoin blockchain
- Active since August 1, 2017
- Larger block sizes mean BCH can process more transactions per minute than BTC
- Just as BTC, the maximum number of BCH tokens is capped at 21,000,000
BCH is an offshoot of Bitcoin. In general terms, Bitcoin Cash performs a similar function and has the same overall goals as its predecessor. To put it another way, BCH is designed to be a digital decentralised currency unconstrained by governments or geographical borders.
Why was Bitcoin Cash Invented?
While BCH and BTC share many similarities, they’re also different. To examine this difference, we must look to the creation of this altcoin.
Despite being the most valuable cryptocurrency, some Bitcoin developers were unhappy with the state of the project. With other blockchains such as Litecoin (LTC) able to process transactions cheaper and more efficiently, many thought that a change was necessary.
In 2017, a hard fork was discussed. All blockchains have the ability to be forked, which basically means part of the original code is changed in some fundamental way. A perfect fork is where the entire community will shift to the new, improved blockchain. A split, is where there is a disagreement among members. This is what happened with Bitcoin in August 2017.
After developers found a way to increase the size of a block (i.e., the amount of transactions a block can hold), a fork was agreed. Those in the community who thought a new system was necessary moved over to Bitcoin Cash, while those loyal to the original system stayed with Bitcoin. The end result was a new digital token that was based on Bitcoin but had some important differences.
The Team Behind Bitcoin Cash
In practice, no one person is behind Bitcoin Cash. The decision to implement a hard fork on the BTC blockchain was a community decision taken by those working on the project.
How does Bitcoin Cash Work?
Before we look at how to get Bitcoin Cash, it’s important to understand how it works as a cryptocurrency and, in turn, an investment opportunity.
Comparable to the function that Bitcoin performs, BCH tokens are a form of digital currency. Thanks to decentralised technology, cryptography and Proof of Work (PoW) protocols, a network of miners can process transactions without requiring a single point of authority. This system is almost identical to Bitcoin. However, the main difference is that the blocks can handle more data (transactions) which, in turn, mean it’s easier and faster to process payments.
The end result is that, in some people’s minds, BCH is more effective as an online currency. In other words, it’s easier to send, receive and spend BCH tokens than BTC tokens. That makes it a better option for those wanting to pay for goods and services using crypto.
From an investment perspective, that’s important. As the world becomes familiar with digital currencies, more people will want to use it. That makes it an interesting alternative for those who’d previously considered buying Bitcoin.
How does Bitcoin Cash Compare to Bitcoin and How Safe is BCH?
As previously mentioned, the fundamental processes for BCH are the same as Bitcoin, with the main difference being the size of a block and the speed at which transactions take place. Bitcoin Cash has a devoted community and ranks in the top 5 crypto at the time of writing. The token has a tendency to mirror the price movements of its parent Bitcoin. If you feel that feel that Bitcoin is safe, you can be confident to extend this sentiment to BCH.
Can Bitcoin Cash (BCH) be used Anonymously?
Bitcoin cash can be used anonymously when transacting directly on its network. If you wish to exchange your BCH for other crypto or fiat currency, then you will have to go through an exchange. Many of these require you to provide evidence pertaining to your identity. AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations exist to protect the interests of all parties and should be welcomed if we are to see the mass adoption of crypto for everyday use.
How can you Get Bitcoin Cash?
Now that you know how BCH came about, let’s look at how we can acquire this valuable, digital asset.
How can I Buy Bitcoin Cash?
There are two ways to get Bitcoin Cash: You can buy it or you can mine your own. If you’re technically minded, mining cryptos is a great way to obtain Bitcoin Cash, though it isn’t really free, as mining hardware and electricity required to perform the task all costs money. The process of mining BCH isn’t overly complex, although it does take time and is beyond the skillset of most casual investors.
Therefore, the simplest way to get Bitcoin Cash is to employ the use an exchange. As one of the leading crypto coins on the market, you can buy BCH via any of the leading online exchanges. Regardless of whether you want to buy it with another digital coin via a crypto-to-crypto exchange or make fiat transactions, all the options are available.
How to Store Bitcoin Cash
The best way to store BCH tokens is via an online or offline wallet. Because this coin is linked to Bitcoin, you can use all the same crypto wallets for BCH as you would BTC. Some of the leading options are:
Alternatively, you can trade Bitcoin Cash CFDs (Contracts for Difference) via the eToro platform. If you do that, you won’t need to own the underlying asset, therefore, don’t need to go through the complex process of setting up a wallet. CFDs allow you to earn money based on the price fluctuations of BCH.
Bitcoin Cash Price, Market Cap & Supply
Other than being more efficient than Bitcoin, the main advantage BCH has over its peer right now is its price. Unlike its older brother, Bitcoin Cash doesn’t cost thousands. Although it’s far from the cheapest crypto, you could pick up a single BCH token for around $311 in February, 2020. When you combine this with a supply cap of 21 million coins, there’s a lot of potential to make a handsome profit when you buy Bitcoin Cash.
Bitcoin Cash Advantages & Disadvantages
Advantages of Bitcoin Cash
- Based on well-established technology
- More efficient than Bitcoin
- Cheaper than BTC
- Can be used by consumers
Disadvantages of Bitcoin Cash
- Still in the shadows of Bitcoin
- Competing with other Bitcoin forks, such as Bitcoin Gold (BTG)
Should you Invest in Bitcoin Cash or Not?
If you’re a fan of Bitcoin then you’ll love Bitcoin Cash. Essentially the same but better in some respects, BCH has all the makings of a world-class cryptocurrency. When you combine that with fairly affordable prices and its potential in the ecommerce space, it’s certainly a crypto worth considering.
FAQ – Frequently Asked Questions about Bitcoin Cash
What is Bitcoin Cash?
Bitcoin Cash is an offshoot of Bitcoin that’s designed to be more efficient.
How can I buy Bitcoin Cash?
All the top cryptocurrency exchanges currently offer BCH trading options.
How much does Bitcoin Cash cost?
The price of BCH is always changing. In this guide, we can only cover what Bitcoin Cash is about and how Bitcoin Cash works.
Can I get Bitcoin Cash with a fiat currency?
Yes. Many major platforms give you the option to buy BCH fiats such as EUR, GBP and USD.
Will I make money if I buy Bitcoin Cash?
As a general rule, all crypto invests carry some degree of risk. However, this is a well-established project that has a lot of positive attributes.
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