Bitcoin Cash (BCH) emerged in 2017 as a significant hard fork from the original Bitcoin blockchain. It was created to address scalability challenges by increasing the block size, enabling faster and more cost-effective transactions. While it shares Bitcoin's core principles of decentralization and security, BCH has evolved with distinct features and a growing ecosystem.
What Is a Hard Fork?
In cryptocurrency, a fork represents a divergence in a blockchain's protocol, leading to two separate versions. Hard forks are permanent splits that create new currencies incompatible with the original chain. Unlike soft forks, which maintain backward compatibility, hard forks require all users to upgrade their software to participate in the new network.
Bitcoin Cash resulted from disagreements within the Bitcoin community over scaling solutions. Proponents of larger blocks advocated for BCH to enhance transaction throughput, leading to its creation as an independent digital asset.
Why Was Bitcoin Cash Created?
Bitcoin's scalability limitation, with a 1MB block size capping transactions at roughly 4.6 per second, caused network congestion and high fees. Bitcoin Cash was proposed to resolve these issues by increasing the block size to 8MB initially (later expanded to 32MB), allowing over 100 transactions per second.
This upgrade aimed to maintain Bitcoin's original vision as a peer-to-peer electronic cash system, prioritizing everyday usability and merchant adoption. The larger block size reduces reliance on second-layer solutions and keeps transaction costs minimal.
How to Acquire Bitcoin Cash
You can obtain BCH through two primary methods: mining or purchasing on supported platforms.
Mining Bitcoin Cash
Mining involves validating transactions and securing the network using computational power. To start, you'll need specialized hardware and software.
Essential Mining Hardware
Application-Specific Integrated Circuit (ASIC) miners are necessary for profitable BCH mining. Key models include:
- Antminer S19 Pro (110 TH/s, 3250W)
- Whatsminer M30S++ (112 TH/s, 3472W)
- AvalonMiner 1246 (90 TH/s, 3420W)
These devices offer high hash rates but consume significant electricity. Always calculate potential profitability considering your local energy costs.
Mining Software Options
Popular mining programs include:
- CGMiner: A versatile, open-source option with advanced features
- BFGminer: Supports multiple mining pools and hardware types
- EasyMiner: User-friendly graphical interface for beginners
Mining Approaches
- Solo Mining: Suitable for those with substantial computational resources; miners receive full block rewards but face inconsistent earnings
- Pool Mining: Miners combine resources to increase reward frequency; profits are distributed based on contributed hash power
- Cloud Mining: Users rent mining capacity from service providers, eliminating hardware costs but requiring careful vendor due diligence
👉 Explore mining profitability calculators
Purchasing Bitcoin Cash
Cryptocurrency exchanges offer the most straightforward way to acquire BCH. Create an account on a reputable platform, complete verification procedures, and use fiat currency or other cryptocurrencies to purchase Bitcoin Cash. Always prioritize exchanges with strong security measures and regulatory compliance.
Storing Bitcoin Cash: Wallet Options
Securely storing your BCH requires choosing an appropriate wallet based on your security needs and usage patterns.
Hardware Wallets
Physical devices offering maximum security by keeping private keys offline:
- Ledger Nano X: Bluetooth-enabled with mobile support
- Trezor Model T: Touchscreen interface and advanced security features
- CoolWallet Pro: Credit-card-sized with mobile connectivity
These devices protect against online threats while enabling convenient transactions when connected to internet-enabled devices.
Software Wallets
Applications for computers or mobile devices:
- Electron Cash: Open-source desktop wallet with advanced features
- Bitcoin.com Wallet: User-friendly option supporting multiple cryptocurrencies
- Exodus: Multi-asset wallet with built-in exchange functionality
Software wallets offer convenience for frequent transactions but require robust device security practices.
Paper Wallets
Offline storage method involving printed private keys and QR codes. While highly secure against cyber threats, paper wallets require physical protection and careful handling to prevent loss or damage.
Advantages of Bitcoin Cash
Enhanced Scalability
The 32MB block size enables significantly more transactions per second than Bitcoin, reducing congestion and enabling lower fees. This design supports broader adoption for everyday transactions.
Minimal Transaction Fees
BCH transactions typically cost less than $0.01, making microtransactions and regular payments economically feasible. This cost advantage remains consistent even during network congestion.
Fast Confirmations
Larger blocks allow quicker transaction confirmations, typically within seconds to minutes. This speed enhances usability for point-of-sale payments and time-sensitive transfers.
Strong Security Model
Bitcoin Cash maintains Bitcoin's robust security framework with proof-of-work consensus and decentralized validation while implementing improved signature algorithms for enhanced efficiency.
Challenges and Limitations
Network Security Considerations
While technically sound, BCH has a smaller hash rate than Bitcoin, theoretically making it more vulnerable to 51% attacks. However, the network has implemented checkpointing and other security enhancements to mitigate this risk.
Adoption Hurdles
Despite technical advantages, BCH faces competition from both Bitcoin and newer blockchain projects. Merchant acceptance and ecosystem development continue to grow but at a measured pace.
Perception Issues
Some investors perceive BCH as "just another Bitcoin clone," overlooking its technical improvements. Educational efforts continue to highlight its distinct value proposition as electronic cash.
Practical Applications: What Can You Buy with BCH?
Bitcoin Cash functions as a practical payment method across various sectors:
- Retail: Major companies like Newegg, Overstock, and Namecheap accept BCH
- Gift Cards: Platforms like Coinsbee and Bitrefill offer gift cards for hundreds of retailers
- Travel: Selected travel agencies and accommodation providers accept cryptocurrency payments
- Charitable Donations: Numerous nonprofit organizations accept BCH contributions
- Peer-to-Peer Transactions: Individuals can send value globally with minimal fees
The ecosystem continues expanding as more merchants recognize the benefits of low-cost, borderless transactions.
👉 Discover merchants accepting BCH payments
Future Development Outlook
Bitcoin Cash continues evolving through regular protocol upgrades focused on:
- Smart Contract Capabilities: Enhancing programmability while maintaining security
- Tokenization Support: Enabling custom tokens on the BCH blockchain
- Scalability Improvements: Research into further increasing transaction capacity
- User Experience Enhancements: Developing more intuitive wallets and payment tools
The development community remains active in addressing technical challenges while maintaining the core vision of accessible peer-to-peer electronic cash.
Frequently Asked Questions
What distinguishes Bitcoin Cash from Bitcoin?
Bitcoin Cash features larger blocks (32MB vs. 1MB-4MB), enabling faster transactions and lower fees. It focuses on everyday transactions rather than store-of-value use cases.
Is Bitcoin Cash a good investment?
As with any cryptocurrency, BCH carries volatility risks. Its technological advantages for payments and growing ecosystem present potential opportunities, but investors should conduct thorough research and consider their risk tolerance.
How does Bitcoin Cash achieve lower fees?
The larger block size allows more transactions per block, reducing competition for block space. This design eliminates bidding wars for transaction inclusion that drive up fees on constrained networks.
Can I use Bitcoin Cash for international transfers?
Yes, BCH enables borderless transfers with minimal fees and rapid settlement times, making it particularly suitable for cross-border payments and remittances.
What prevents Bitcoin Cash from suffering the same congestion issues as Bitcoin?
The expanded block capacity provides substantial headroom for transaction growth. Even during periods of high demand, fees remain low due to adequate block space availability.
How often does Bitcoin Cash undergo protocol upgrades?
The network typically implements scheduled upgrades every six months, introducing improvements while maintaining network stability through thorough testing and community consensus.
Conclusion
Bitcoin Cash represents a pragmatic approach to cryptocurrency scalability, prioritizing transactional efficiency and practical usability. While facing challenges common to emerging technologies, its technical merits and growing ecosystem position it as a viable electronic cash system. As the digital currency landscape evolves, Bitcoin Cash continues to offer a compelling combination of security, low costs, and fast transactions for users worldwide.