Bitcoin Cash (BCH) emerged in August 2017 through a hard fork from Bitcoin, positioning itself as a decentralized peer-to-peer electronic cash system. Unlike traditional financial systems, it operates without reliance on central authorities like banks or governments. By increasing block sizes—permanent records of transactions—BCH significantly boosted transaction capacity and scalability. But how exactly does Bitcoin Cash function, and what led to its split from Bitcoin? Let’s explore.
How Bitcoin Cash Works: Speed, Scalability, and Efficiency
Technically, Bitcoin Cash and Bitcoin share core mechanics:
- 21 million asset cap for both BCH and BTC.
- Proof-of-Work (PoW) consensus for transaction validation.
- Miner rewards in BCH for computational power.
Key Differentiator:
BCH processes transactions faster due to its larger block size (4–8 times Bitcoin’s capacity, depending on Segregated Witness/SegWit usage). SegWit removes signature data from transactions, freeing block space for more transactions.
Practical Use Cases:
- Everyday purchases (e.g., groceries) benefit from BCH’s speed and low fees.
- Large purchases (e.g., cars) may still favor Bitcoin for its security.
👉 Discover how Bitcoin Cash compares to other cryptocurrencies
The Birth of Bitcoin Cash: Why the Fork Happened
Bitcoin’s original vision as a daily transactional currency clashed with its growing role as an investment asset. Network congestion from its 1MB block size limit caused delays, prompting a faction of developers and miners to create Bitcoin Cash.
Key Fork Outcomes:
- Block size increased to 8–32 MB, handling ~25,000 transactions per block (vs. Bitcoin’s ~1,500).
- Distinct philosophy: BCH prioritizes utility over store-of-value.
How to Buy Bitcoin Cash: Step-by-Step
1. Cryptocurrency Exchanges
- Set up a wallet: Choose an exchange with built-in storage.
- Complete KYC: Submit ID documents per regulatory requirements.
- Purchase BCH: Trade fiat or other crypto for BCH tokens.
2. Peer-to-Peer (P2P) Trading
- Direct transactions: Platforms connect buyers/sellers with escrow protection.
- Offline options: Meet sellers in person using QR codes (verify credibility).
👉 Explore trusted platforms to buy Bitcoin Cash
FAQ: Bitcoin Cash Essentials
1. Is Bitcoin Cash the same as Bitcoin?
No. While both stem from the same origin, BCH focuses on faster transactions via larger blocks, whereas BTC emphasizes security and store-of-value.
2. Why does Bitcoin Cash have lower fees?
Larger block sizes allow more transactions per block, reducing competition for space and fees.
3. Can I use Bitcoin Cash for daily purchases?
Yes! Its speed makes it ideal for small, frequent transactions like retail purchases.
4. What happened to my Bitcoin during the 2017 fork?
Original Bitcoin holders received an equal amount of BCH, accessible via compatible wallets.
5. Is Bitcoin Cash more scalable than Bitcoin?
Currently, yes—its block size adjustments enable higher throughput, though long-term scalability debates persist.
Key Takeaways
- Bitcoin Cash solves Bitcoin’s scalability issues for everyday use.
- Faster transactions and lower fees make BCH ideal for commerce.
- Divergent philosophies: BTC as digital gold, BCH as digital cash.
Whether you’re transacting or trading, understanding Bitcoin Cash’s role in the crypto ecosystem empowers smarter decisions.