BCH: The Younger Brother of BTC
BCH (BitcoinCash), like its older brother Bitcoin (BTC), is a decentralized cryptocurrency with blockchain as the underlying technology. Featuring open-source codes, BCH also adopts a peer-to-peer network and stigmergy.
Since we already got BTC, what do we need BCH for?
This all goes back to the origin of BCH: BTC. In 2008, BTC was created by Satoshi Nakamoto. At the time, Satoshi Nakamoto limited the block size of Bitcoin to 1 MB through coding. Such a restriction not only allowed users with weaker PCs to get involved but also stopped attackers from crippling the Bitcoin network. After all, the network was still in its infancy. Under the 1 MB restriction, a block could accommodate about 2,000 transactions at most in 10 minutes, i.e. 7 transactions per second.
Later on, an increasing number of users started trading BTC, and 1 MB blocks could no longer carry the growing transaction volume, which led to all sorts of problems. For instance, the BTC network started to suffer congestion, excessive transaction fees, and prolonged packaging of transactions.
At this point, some members of the BTC community started to call for scaling. Meanwhile, proponents of small blocks led by Bitcoin Core (core developers of Bitcoin) preferred to address the problem of network congestion through Segregated Witness (SegWit) and Lightning Network. Therefore, the two camps started arguing over the issue of scaling for three years. After all, the problem was extremely complicated and involved many stakeholders, and it would take a long time to sort it out.
Later, the conflict in the BTC community could no longer be reconciled, and more members started to call for a hard fork. On August 1, 2017, BTC was finally forked out of BTC in a hard fork, which marks the birth of BCH!
Due to the switch of versions, the BTC blockchain was forked into two separate blockchains. All users who owned BTC before the fork could claim an amount of BCH tokens equivalent to their BTC holding. With BCH, the block size was upgraded to 8M, and later to 32M, which solved the problems of expensive fees, slow confirmation, and poor practicability that troubled the old BTC system. This also fulfilled BTC’s promise of providing “peer-to-peer electronic cash”.
Since then, the BTC community was broken into two, and everyone was happy.
In a way, BTC can be regarded as the former self of BCH, but after the fork, BCH has always been deemed as a new direction of BTC. In the BTC network, congestion happens because sometimes the processing speed cannot keep up with the transaction volume. BCH, on the other hand, features larger blocks and can process more transactions, which avoids such congestion. This is also the most significant difference between BCH and BTC, and explains why BCH’s transaction fees are way lower than BTC’s.
The BCH community conceptually differs from the current BTC community and the Core team. Simply put, BCH and BTC are now not much related, and BCH has evolved into an all-new currency.
BCH also boasts its own advantages, which include the following:
1. The BCH network is jointly maintained by all users. Unless the vast majority of BCH users agree to a change (such as modification of rules or version upgrade), no individual or organization can alter or stop the operation of BCH.
2. Like the Internet, the BCH network works hard and stays open all year round. With BCH, you can send money to anyone around the world at any time throughout the day. Moreover, there is no minimum transaction amount, and you don’t need to ask for authorization or approval from anyone.
3. BCH also features sound anonymity, and it is normally impossible to find out who controls a BCH address.
4. Of course, BCH also comes with a max supply. Its protocol guarantees that the BCH supply will never exceed 21 million. When it comes to fiat currencies, due to the continuous money printing by governments, everyone’s deposits may depreciate. BCH, on the other hand, features a max supply, and the cap is extremely stable.
5. BCH is also a programmable currency, which means that smart contracts can be implemented on top of BCH. A programmable economy will resolve the problems of transparency and credibility that may arise during its running and lower the cost of social operation.
Today, BCH is maintained by several different developer teams, and its market cap had once ranked second among all cryptos. Furthermore, a growing number of business establishments are accepting payments with BCH.
At the moment, the circulating market cap of BCH stands at $4.2 billion. In April 2020, BCH was halved for the first time at the block height of 630,000, and the reward was cut by 50%. After the first halving, the block reward is now set at 6.25 BCH.
For more information about BCH (BitcoinCash), please go to:
Official website: https://www.bitcoincash.org/
Block explorer: https://explorer.coinex.com/bch
Market cap ranking: https://coinmarketcap.com/currencies/bitcoin-cash
