Bitcoin Cash: Origins, Birth, Characteristics
Ah, the famous Bitcoin Cash (BCH)! The only dissident cryptocurrency with the privilege of having its dedicated article on this blog. And for good reason, it comes from the schism ( hard fork ) the most famous that has known the world of cryptocurrencies.
Bitcoin Cash is not unanimous for him or against him. No, it’s not the Ripple … The opinions are very divided . On the one hand, supporters of Bitcoin Cash, believing that it is true bitcoin and a technical improvement over the BTC. On the other hand, those who think that it is a problem, a shadow to the BTC and that it is only there to divide.
Writing a neutral article will therefore be even more difficult than for the Ripple! The objective is not to settle the debate on the veracity of the BCH or the division it causes . Rather, it is necessary to discuss the reasons for its birth and how it differs from the BTC.
For information, the Bitcoin Gold (BCG) , born end of 2017, is from another schism blockchain bitcoin. However, it is very confidential and will not have a dedicated article.
Origins of Bitcoin Cash
Of course, it is not appropriate to differentiate the ancient origins of Bitcoin Cash from those of Bitcoin. I refer you to the article on Bitcoin for origins up to the year 2017.
July 2017: the Bitcoin protocol is more and more popular with the general public . Major media reports, especially because its value explodes. The demand is growing and it is accompanied by the slowness of the network which can not support the rise of transactions . As a result, the validation of a transaction takes longer and costs more in fees.
Here, in summary, the famous problem of the scalability of Bitcoin . How to be as efficient, fast and cheap, whether there are 10 transactions per second or 1000? For some, this problem can only be solved by increasing the size of the blocks. For others, increasing the size of the blocks would be a break with the protocol devised by Satoshi Nakamoto and a possible attack on the decentralization of Bitcoin.
First of all, let’s make it simple: blocks record transactions. Each block is created every 10 minutes. The size of each block is 1 MB in the original protocol (it is now 2 MB). But Bitcoin Cash supporters are asking for an increase to 8 MB! They believe that by increasing the size of the blocks, the network would be more fluid. Indeed, by moving to 8 MB, 8 times more transactions would be validated in 10 minutes. Looking closer, the two opposing parties have both reasons. Increasing the size of the blocks increases the scalability but also presents risks! It is therefore difficult to reach an objective consensus. Especially since the size of the blocks is not the only problem of scalability … but stay on the topic Bitcoin Cash.
Although concerning a small period in time, the creation of Bitcoin Cash could be long enough to tell. I will stay on the essentials. In July 2017, the vast majority of mining pools voted to incorporate a technology known as Segregated Witness (SegWit2x). SegWit2x reduces the amount of data to be checked in each block by deleting the signature data from the data block to be processed in each transaction, and attaching it to an extended block. In other words, transactions would be validated faster and cheaper.
However, a minority of pools expressed reservations about the adoption of SegWit2X. They felt that the update did not address the fundamental problem of protocol scalability , and did not follow Satoshi Nakamoto’s initial roadmap. Moreover, the process of introducing SegWit2x as a way forward was anything but transparent , and it was feared that its introduction would undermine the decentralization and democratization of the currency . Some critics of these minority pools believe that the schism was provoked because the transaction costs were going to be reduced, leading to a decrease in their remuneration … Despite the minority of opposing pools, we would find however Bitmain, which has some influence on the small world of mining.
Despite attempts at conciliation and, finally, surprisingly because the mediation seemed on track, the schism occurred and Bitcoin Cash was created in the middle of summer 2017.
Birth of Bitcoin Cash
It was on August 2 that schism was initiated by these miners and developers belonging to the minority pools. This schism is the act of birth of Bitcoin Cash . It is, by far, the most famous hard forks of Bitcoin blockchain and all crypto-currencies in general.
Since its creation, cash bitcoin, as cryptocurrency, is one of the most important capitalizations . She is the only crypto born of a hard fork to have managed to integrate with the “historical” .
You can find the official website of Bitcoin Cash by clicking on this link .
Characteristics of Bitcoin Cash
Bitcoin Cash has some features already mentioned earlier in this article. It is essential to understand in detail the differences with Bitcoin because it is they who caused the schism.
The first difference, the best known, is the size of the blocks . Bitcoin Cash has implemented an increased block size of up to 8 MB, to speed up the verification process . It is not excluded that this limit to 8 MB is only a first step.
The second difference is the prevention of possible schisms in the future. For some BCH miners, the hard fork would be inescapable at some point and everything was planned for a schism to have a minimal impact . On the one hand, it would not lead to the creation of a new cryptocurrency. On the other hand, the two channels would continue to communicate with each other.
The third difference, related to the first two, is a level of difficulty that can be adjusted to ensure the survival of the chain and the speed of transaction verification, regardless of the number of transactions. minors who support it. This last point, complex to seize, raised concerns about the security of Bitcoin Cash.
For the rest, Bitcoin Cash is faster and cheaper than the Bitcoin protocol for two reasons: the size of blocks and the number of transactions much lower.
But, do not be wrong: the cash bitcoin is not an altcoin! The BCH is a derivative bitcoin . Certainly, some characteristics differ but it is very easy for a lambda person, to confuse the two since, basically, it is the same cryptocurrency. There is only to compare the logos …
Drawing conclusions about Bitcoin Cash is not easy. It is difficult to predict what will happen to the cryptocurrency dissent of Bitcoin.
His main difficulty is that it can only lead to confusion among the general public , who will not differentiate the BTC and the BCH. Especially, it happened that speculators “have fun” to explode the value of the BCH on 1 day, temporarily lowering the value of the BTC … Nothing fun when we see the runaway of some media with each fall of the value of Bitcoin!
I take the risk of saying that this article will become obsolete one day . No, two Bitcoin protocols can not survive one another. One of them will have to win. And I take the bets that the original Bitcoin will survive … taking over some of the features of the BCH! Because, let’s not be fooled: the technical characteristics of the BCH are more interesting for the search for scalability of the Bitcoin protocol .