Since you are here, I am going to assume you already know a thing or two about Bitcoins. But have you ever come across the term called Bitcoin cash? If you have not, then you have come to the right place as. In this article, I am going to talk about what is bitcoin cash and how different it is from Bitcoin.
If you like to stay updated with the news, you are already aware of the buzz that Bitcoin is making. Entrepreneur Elon Musk’s company Tesla invested a whopping 1.5 Billion dollars in Bitcoins, which have made the prices of Bitcoin soar through the sky.
What I like the most about Bitcoin is that it does not only serve as a digital currency, but it is also a lucrative asset to invest in. According to financial experts, the price of Bitcoins is only going to rise in the coming future.
So without wasting any further time, let us take a look at what Bitcoin cash is and how different it is from Bitcoin.
Bitcoin Cash 101
Bitcoin Cash is a Cryptocurrency that was invented in the month of August 2017. The main purpose of Bitcoin Cash was to expand the size of the blocks. It allowed the scope for more transactions to be processed in a short time and thus improving Scalability. This is one of the most important things to know while learning what is bitcoin cash.
There have been a lot of debates among the members of the Crypto industry about Scalability and the speed of Bitcoin transactions. The stakeholders and miners of Bitcoins came up with two major interesting solutions to the problem.
Making into smaller blocks so that it becomes easier for processing and the second one is to make the blocks of data bigger.
When the blocks of data are made bigger, then the information can be processed at a single time. Keeping all these factors in mind Bitcoin Cash was introduced as it promised to solve these two major problems.
Bitcoin Cash Explained
When Bitcoin was first founded by Satoshi Nakamoto, its main purpose was to be used as a cryptographic digital currency that would work on Blockchain technology. But over the years, the true purpose of Bitcoin changed, and it turned out to be a lucrative source of investment.
The high volatility rate of Bitcoin did not allow holders to use it for making day-to-day Bitcoins. When Bitcoin was first introduced, its value was $0.0008, and now as I am writing this article, the value of one Bitcoin is over $48K. The prices keep swinging every second.
This makes it a very hard digital currency, so over the years, people have viewed it as an investment asset rather than a digital currency.
With all these, blockchain technology faced issues with Scalability since the number of transactions kept increasing. The limit of one block was 1MB for Bitcoin. Bitcoin Cash solves the problem as the limit for Bitcoin Cash is 32MB. This ensures that transactions are processed fast.
Why Was Bitcoin Cash Introduced?
If you know what Bitcoin cash means, you have to go back to Bitcoin mining. It was started by Bitcoin miners, and the main intention for bringing Bitcoin cash into existence was to effectively scale Bitcoin’s ability.
As you already know, transactions on Bitcoins happen on Blockchain technology. All the data, information, transactions, and events are safely stored on this distributed public ledger. But the thing with it is that it is extremely slow, especially when it is compared with the speed with which banks process transactions.
Take VISA, for example; it is one of the biggest credit card companies in the world. On average, the process up to 150million transactions per day and 1,700 transactions per second.
But how many transactions do you think the Bitcoin Network processes? Seven. Since people using Bitcoins are on the rise, the waiting time on the network has increased significantly. The waiting time is long since there are many transactions to be processed on the network that is not updated.
The blocks of Bitcoins are limited to 1MB, whereas the blocks of Bitcoin Cash are extended up to 32MB. This is where Bitcoin Cash proves to be a better alternative to Bitcoins. Now let us take a look at some of the reasons why Bitcoin Cash was started. I hope this answered the question of what is bitcoin cash.
Limitations Of Bitcoin Cash
Bitcoin Cash has its fair share of limitations. Even though people through bitcoin cash all the limitations of Bitcoin would be solved but so far, it has not been able to live up to the expectations.
Smaller Block Size
One of the most important limitations is that it has a much smaller block size than that of a Bitcoin. Smaller Block Size means its ethos of making more transactions in a short time is yet to be tested. It is very important to know what is bitcoin cash
Low Bitcoin Transaction Fee
The transaction fee of Bitcoin has significantly reduced, so it serves as a very good competitor to Bitcoin Cash, making it feasible for daily use.
Alt Coins Are Taking The Lead
Alt Coins such as Ether, LiteCoins are taking the lead as a substitute for Bitcoins. Most traders and investors in the Crypto Space have your idea of what Bitcoin Cash is. They would rather use AltCoins than BitCoin cash.
Problem With Blockchain Of Bitcoin Cash
Bitcoin Cash’s problem technology has a lot of problems; it was actually creating problems for the main blockchain technology, so investors and traders did not really like it.
Final Thoughts On Bitcoin Cash
There you know, I hope now you know everything there is to know about Bitcoin Cash. Even though Bitcoin cash promised to solve a lot of problems that Bitcoin has but to date, it has not been able to live up to the expectations of the developers.
I hope this article has provided you with some clear insights on what is bitcoin cash, its origin, and how different it is from Bitcoin.