Bitcoin Cash (BCH) is a cryptocurrency that emerged on August 1, 2017 after the Bitcoin blockchain hardfork. The reason for the emergence of BCH is scalability issues and high fees in the Bitcoin network due to the small block size of 1MB. Bitcoin Cash developers increased the block size to 8 MB and later to 32 MB, which increased the number of transactions in the network and reduced commissions.
BCH also changed the algorithm for calculating the difficulty of mining, making it more flexible and allowing it to react faster to changes in the hash rate of the network. In addition, a new algorithm for digitally signing transactions was introduced. As a result, Bitcoin Cash is faster and cheaper to use compared to Bitcoin.
Bitcoin and Bitcoin Cash use a proof-of-work algorithm to time stamp each new block. The health-checking algorithm used is the same in both cases. It can be described as a partial inversion of the hash function. In addition, both bitcoin and Bitcoin Cash aim to create a new block on average every ten minutes.
The main differences between BCH and BTC
- Increased block size. The main difference between Bitcoin Cash and Bitcoin is the 8-32 times larger transaction block size. This allowed to significantly expand the network bandwidth and the number of transactions processed. For example, if in the Bitcoin network it is possible to process 3-7 transactions per second, in the Bitcoin Cash network - up to 50-100.
- Changed complexity algorithm. Another important difference is the changed algorithm for adjusting the complexity of mining. In the Bitcoin network, the complexity changes once every 2016 blocks, while in Bitcoin Cash it changes once every 6 blocks. This allows for faster response to network hashrate jumps.
- New transaction signing algorithm. BCH developers have implemented a digital signature algorithm for Bitcoin Cash transactions called CashAddr. It differs from the algorithm in the Bitcoin network and avoids the risk of crossing the addresses of the two cryptocurrencies.
BCH mining
- Mining Algorithm. Bitcoin Cash mining is done with ASIC miners in the same way as Bitcoin mining. The Proof-of-Work algorithm is used. Miners compete for the right to create a new block and get rewarded.
- Mining Complexity. Currently, the complexity of Bitcoin Cash mining is about 5% of the complexity of Bitcoin mining. This means that BCH requires less computing power to create a new block.
- Mining yield. The average yield of BCH mining is about $0.35 per 1 THash/s per day. This is about 2-3 times lower than for BTC. Thus, BCH mining is less profitable due to the lower value of the coin.
Prospects and benefits of BCH
Bitcoin Cash has good prospects as a means of payment due to low fees and high speed. BCH is also supported by major exchanges and payment systems. The benefits also include the reliability and stability of the blockchain.
The main benefit of owning BCH is the ability to use it for fast and cheap transactions, as well as the potential for price appreciation in the long term. But due to its high volatility, investing in BCH comes with increased risks.
Conclusion: the main advantages of BCH
In conclusion, let us once again note the main advantages of Bitcoin Cash: high speed and low cost of transactions, network stability, blockchain reliability. These factors make BCH a promising payment instrument for use in everyday life and business. However, high risks due to volatility require a careful approach to investing in this cryptocurrency.
