Bitcoin Cash (BCH)
Bitcoin Cash (BCH) is a cryptocurrency that was created from a fork of Bitcoin in August 2017. It was launched by the mining pool ViaBTC based on the Bitcoin ABC proposal.
Background:
On July 21, 2017, the Bitcoin community reached consensus on the BIP91 proposal, agreeing to activate Segregated Witness (SegWit) and upgrade the block size limit to 2MB within the following six months. However, a mining giant, ViaBTC, proposed a hard fork solution and launched Bitcoin Cash based on the original Bitcoin blockchain.
Project Highlights:
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On-Chain Scaling: Bitcoin Cash adheres to Satoshi Nakamoto's roadmap of achieving global adoption through on-chain scaling. As a first step, the block size limit has been made adjustable and increased to 8MB by default. Research is ongoing to allow for significantly larger block sizes in the future.
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New Transaction Signatures: New signature hash (SigHash) types provide replay attack protection, improve hardware wallet security, and solve the quadratic hashing problem.
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New Difficulty Adjustment Algorithm (DAA): A responsive Proof-of-Work (PoW) difficulty adjustment allows miners to migrate from the old Bitcoin chain to the new one at will while providing protection against excessive hash rate fluctuations.
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Decentralized Development: With multiple software implementations by independent development teams, the future is secure. Bitcoin Cash is resistant to political and social attacks on protocol development, with no single team or entity in control. The bitcoin-ml mailing list serves as a platform for collaboration between development teams on protocol changes.
Use Cases:
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Fast Transactions: By design, the Bitcoin Cash network is set up to process transactions quickly and with minimal fees. Unlike the original Bitcoin blockchain, which is limited to 1MB blocks and replacement fees, Bitcoin Cash blocks are 8MB. Upgrading to larger blocks means miners can validate all transactions, not just those with the highest fees. Larger blocks help keep the BCH mempool clear and transactions confirming quickly.
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Affordable for Customers and Merchants: Bitcoin Cash transactions are mined quickly - even with the lowest fee. Since more transactions fit in an 8MB block, there is less competition to ensure your transaction is confirmed in the next block. For consumers, low fees mean low fees for merchants. Merchants can begin accepting Bitcoin Cash payments without paying monthly fees and a percentage of each transaction. Plus, there are no currency conversion costs; BCH is a global, borderless currency.
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Minimal Risk: One risk of accepting credit card payments, especially online, is fraud. Merchants always run the risk of chargebacks (funds being returned from the consumer’s credit card or bank account). Some financial institutions actually charge merchants for the privilege, for example, PayPal merchants are charged $20 per chargeback plus the original transaction fee. Bitcoin Cash transactions happen in seconds and are confirmed in minutes. You can send or receive the currency globally, and transactions are irreversible (even for fraudsters).
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Easy to Implement: Small merchants only need their Bitcoin Cash address to start accepting BCH for payments. Brick and mortar stores should have a device, like a phone or tablet, handy so consumers can easily scan a QR code. Merchant services, like Coinbase Commerce, make it even easier. Merchants can add Coinbase Commerce as a payment option on e-commerce platforms or add it to an existing checkout flow. All you need is an email address and phone number.
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Regular Upgrades: The Bitcoin Cash community is unique in its commitment to continually upgrading the network. Recently, developers released an upgrade to the BCH address format. BCH addresses now include “bitcoincash:” before the usual string of letters and numbers, so people scanning barcodes won’t mistake it for a Bitcoin address. Mitigating this risk helps streamline and expedite payments.
Bitcoin Cash 2019 Year in Review
BCH successfully upgraded twice in 2019, adding Schnorr signatures and making the majority of transactions on the BCH network now immutable. Furthermore, 2019 saw an increase in BCH adoption, an explosion of SLP tokens, a slew of useful third-party applications, and privacy contenders like Cashshuffle and Cashfusion.
2019's Bitcoin Cash Growth
As the new year approaches, BCH proponents have been discussing all the benefits the Bitcoin Cash network has to offer. Marketwise BCH, like most coins in the top 10 rankings, only saw marginal movement but still outpaced the pack with (+30%-40%) from the price on January 2019. Despite the interesting year for markets, the Bitcoin Cash ecosystem made significant strides.
From infrastructure to merchant adoption, BCH continued to see accelerated growth in 2019. Additionally, the BCH chain went through two upgrades this year, which improved the overall protocol and strides toward the BCH roadmap. BCH proponents from all around the world wholeheartedly believe the decentralized cryptocurrency is paving the way for a global peer-to-peer electronic cash system. In the last two years, BCH has become a much better peer-to-peer electronic cash system and is far superior to BTC.
2019 Upgrades
Every six months the BCH chain upgrades in order to bolster scaling and technical improvements to the Bitcoin Cash roadmap. On May 15, at block 582680, the BCH blockchain implemented the Schnorr signature feature and the Segwit recovery exemption groundwork. Schnorr signatures open the door to improved scaling and privacy and the first upgrade created the initial framework so developers can utilize the protocol. The Segwit recovery change allows network participants to recover funds accidentally sent to Segwit addresses.
Six months later on November 15, BCH developers implemented the Minimaldata rule change at block height 609135, which removed the final BIP-0062 malleability vector from the network. This change made the majority of BCH transactions on the network unalterable. The November consensus change also included extending Schnorr signature support to OP_Checkmultisig (verify), meaning all signature checking opcodes now support Schnorr signatures.
Simple Ledger Protocol (SLP)
This year the Bitcoin Cash network saw the use of Simple Ledger Protocol (SLP) surge as the SLP universe has become quite robust. So far there have been 6,141 tokens created using the SLP framework with 312,505 SLP transactions this year alone. Popular tokens built on the BCH network this year include Honk Honk, Spice, Official Honk, ACD Coin, Flexcoin, Honestcoin, SAI, Drop, and Gocrypto. Many of these SLP tokens have gained value, and BCH proponents have seen the market capitalization of the tokens grow.
Various Bitcoin Cash Milestones and New Applications
Bitcoin Cash fans also saw the introduction of a market called Bitcoin.com’s Local, which allows people to trade in a peer-to-peer and noncustodial fashion. The dedicated SLP exchange Cryptophyl launched this year creating an SLP-centric marketplace with BSLP-based pairs. A cryptocurrency exchange called Sideshift also launched this year featuring basic BCH trading pairs and support for SLP tokens as well.
A new crypto resource called Bitcoin Cash House Venezuela was born in Barquisimeto, Venezuela for Venezuelans interested in learning about BCH and the benefits of cryptocurrency. The Bitcoin Cash House initiative is also expanding to a multitude of countries in Africa. A video game called Realmx was built on top of the Bitcoin Cash blockchain this year as well.
BCH-centric charities saw significant growth in 2019, and the nonprofit, peer-to-peer food effort Eatbch celebrated its one-year anniversary. Eatbch has also made significant progress in Africa and the BCH community recently funded an Eatbch representative's trip to Ghana.
Overall, the Bitcoin Cash network experienced a lot of development and milestones this year and people are excited for what 2020 has in store. When looking back at the BCH ecosystem’s growth over the last 12 months, it seems like a lot has happened. Almost like new announcements are made daily. Despite the network having a few critics, proponents are very pleased with the achievements.
BCH vs. BTC: Key Differences
While Bitcoin can be considered the predecessor of BCH, since the fork, BCH has been considered a new direction for Bitcoin. Here are the key distinctions:
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Block Size: BCH has larger blocks, enabling it to handle a higher volume of transactions compared to BTC. This addresses the congestion issues BTC faces due to its smaller block size, which can lead to slower transaction processing times.
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Transaction Fees: BCH boasts significantly lower transaction fees than BTC. BTC's slow transaction speeds have resulted in a system where higher fees prioritize transaction processing. This scenario is absent in BCH.
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Ideology and Community: The BCH community's philosophy diverges from the current BTC Core team's vision. In essence, BCH and BTC have minimal connection and operate as distinct cryptocurrencies.
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Innovation vs. Tradition: BCH is viewed as the "reformist" branch of Bitcoin. Its proponents advocate for increasing block size, embracing new technology implementations, and fostering a wider range of projects. However, this progressive approach has drawn criticism, with some accusing them of prioritizing profit over Satoshi Nakamoto's original vision.
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