The story of Bitcoin Cash is one of innovation, debate, and a commitment to creating a cryptocurrency that could fulfill the original vision of Bitcoin. Born from the heated debates within the crypto community, Bitcoin Cash emerged as a hard fork from the Bitcoin blockchain in 2017. In this article, we will delve into the background, origins, merits, and technical journey of Bitcoin Cash.
The roots of the Bitcoin Cash story trace back to 2010 when Satoshi Nakamoto, the pseudonymous creator of Bitcoin, imposed a 1 MB block size limit on the Bitcoin blockchain. This decision was made in the early days of Bitcoin when the cryptocurrency had minimal value, and the network's security and scalability were not a significant concern.
However, as Bitcoin's popularity soared, the 1 MB block size limit became a bottleneck. With only seven transactions per second, compared to Ethereum's 29 and Visa's 1,700, Bitcoin was struggling to keep up with the demand for faster and cheaper transactions.
The Great Debate: Big Blockers vs. Small Blockers
The Bitcoin community was divided into two camps during a period referred to as The Blocksize War. The Big Blockers championed increasing the block size to enhance transaction capacity and scalability. They believed that larger blocks would make Bitcoin a viable alternative to traditional payment systems, like Visa or PayPal.
On the other side, Small Blockers advocated for preserving the 1 MB block size to uphold Bitcoin's core principles of security and decentralization. They feared that increasing the block size would lead to centralization and put control in the hands of data centers, undermining the essence of Bitcoin.
The Big Blockers proposed Bitcoin XT, which aimed to raise the block limit to 8 MB, eventually reaching 8 GB by 2036. However, this drastic approach encountered strong resistance from Small Blockers.
Developer Pieter Wuille introduced Segregated Witness (SegWit), a solution that recalculated block size by separating the transaction signature data. This soft fork offered a moderate increase in block size, addressing the concerns of many in the community.
Bitcoin Classic also attempted to increase the block size to 2 MB through a hard fork but faced opposition from Small Blockers, who believed it would lack miner support.
The New York Agreement, an attempt to compromise, sought to activate SegWit and raise the block size. However, it faced fierce resistance and ultimately failed.
The Birth of Bitcoin Cash
The dissatisfaction of Big Blockers led to the creation of Bitcoin Cash. In July 2017, a group of miners and developers initiated a hard fork, originally named Bitcoin ABC and later renamed Bitcoin Cash. This new cryptocurrency was designed to serve as a cheap and efficient payment system, staying true to the original vision of Bitcoin.
Bitcoin Cash operates on the Bitcoin Cash Node, a platform that facilitates fast and cost-effective transactions.
At a technical level, Bitcoin Cash shares many similarities with Bitcoin. Both have a 21 million asset cap, use PoW consensus, and employ nodes for transaction validation. The key differentiator is the larger block size of Bitcoin Cash, allowing for faster, cheaper, and more efficient transactions.
Bitcoin vs. Bitcoin Cash
Bitcoin Cash's 32 MB block size enables it to process up to 25,000 transactions per block, in stark contrast to Bitcoin's 1,000 to 1,500. While Bitcoin had its own scalability solution, SegWit, Bitcoin Cash's approach appealed to businesses and smaller transactions, making it an attractive option for merchants and everyday use.
Roger Ver, a prominent BCH proponent, has played a pivotal role in advocating for Bitcoin Cash and its usability over Bitcoin. With his commitment to cryptocurrency's potential, Ver earned the nickname "Bitcoin Jesus."
Bitcoin Cash's Rising Prominence
Bitcoin Cash has grown in stature, rising to become the 17th largest cryptocurrency globally. Its market liquidity has recently outperformed even market leaders like Bitcoin and Ethereum. In June 2023, Bitcoin Cash experienced a significant price surge, driven by its listing on a new US-based exchange.
The story of Bitcoin Cash exemplifies the evolution of cryptocurrencies. Born from a desire to address the scaling issues of Bitcoin, it has grown into a powerful digital asset. With its commitment to fast, low-cost transactions and a vision of being a true peer-to-peer payment system, Bitcoin Cash continues to play a pivotal role in shaping the cryptocurrency landscape, offering a different path from its older sibling, Bitcoin.
The 17th largest cryptocurrency by market capitalization is now available for options trading on BIT Exchange, offering traders and investors access to real-time, standardised pricing, providing a more reliable basis for their decisions.
By enabling BCH options trading on a trusted exchange like BIT, we are laying the foundation for more reliable clearing processes and the enforcement of standardised contracts. This not only helps in risk mitigation but also guarantees a level playing field for all participants. It equips every stakeholder in the Bitcoin Cash ecosystem with an extra resource to adeptly handle and hedge their portfolio risks through advanced trading strategies.