Terry Bitcoin Cash (BCH) is both a digital cryptocurrency and a payment network, peer-to-peer electronic cash for the Internet, without a central bank or entrusting a third party to operate. Bitcoin Cash appeared in December 2017 as a Bitcoin’s fork to increase the number of transactions that can be processed.
Bitcoin Cash was created to accommodate a larger block size compared to Bitcoin, allowing more transactions into a single block.
Unlike Bitcoin nodes that are located all over the world, Bitcoin Cash is completely dominated by a small group led by Bitmain, from code development to node operation (mining) to marketing. This makes Bitcoin Cash inherently vulnerable to a crackdown, whether the government declares mining illegal, major developed countries start cracking down on virtual coins, or development teams stall.
In addition, the Bitcoin ABC development group, which is controlled by Bitmain, has a de facto dictatorship over BCH development, and if BCH is indeed dominated by Bitmain, security will be greatly compromised, which is contrary to Bitcoin’s decentralized philosophy.
Bitcoin Cash’s transaction volume is low and transaction speeds are not as fast as expected. Although Bitcoin Cash boasts that it offers greater transfer capacity, however, in reality, Bitcoin Cash has very few on-chain transfers, not only lower than Bitcoin but even less than Litecoin.
Due to the low volume of transactions, Bitcoin Cash’s block size rarely exceeds 1MB, with a recent block size of 57KB, making hard fork expansion virtually meaningless.
In addition, Bitcoin Cash’s transactions are not as fast as one would think. The average transaction confirmation time for Bitcoin is 8m11s, while the average transaction confirmation time for Bitcoin Cash is 9m32s. Bitcoin Cash takes longer than Bitcoin’s transaction confirmation time, so it is clear that expanding the block size to 8M is really not as effective as it should be.
There is still a gap between the Bitcoin Cash technical team and Bitcoin, and the development and growth is all dependent on the support of Bitmain, which is not fully decentralized, and therefore, the security of the Bitcoin Cash network is also threatened. To surpass Bitcoin, Bitcoin Cash still needs long time to go.
BCH is a blockchain asset generated under the Bitcoin ABC scheme, which removes the Segwit feature to keep the protocol stable and simple, and supports increasing the block size to 8M, the technical route to on-chain expansion. the Bitcoin ABC code is based on a stable version of the Bitcoin protocol for improvements, which it believes does not include Segwit will have greater stability and security, and it is a backup to the current Bitcoin protocol and Bitcoin system.
Currently, the Bitcoin network can no longer support more people using Bitcoin for payments. The initial block size of Bitcoin was 32M. Considering the small number of users at the beginning, Satoshi Nakamoto temporarily limited the block size to 1M in order to avoid wasting computing resources and to ensure the safe operation of the Bitcoin system.
However, with the increase in Bitcoin transactions, the transaction confirmation is unusually slow, and if you don’t want to wait for a long time, you need to pay a high transaction fee. In addition, other digital currencies have sprung up, and more and more people are turning to other, cheaper and better digital currencies. These problems have caused Bitcoin’s market share to continue to decline.
There are several solutions to bitcoin transaction congestion, SegWit and Lightning Network are some other ways to accommodate more transactions per second. BitCoinABC (ABC stands for adjustable blocksize cap) is an implementation of Satoshi Nakamoto’s Bitcoin protocol that follows the code of the stable version of Bitcoin and removes the SegWit-related code to create a simple, block-size adjustable Bitcoin client. The coin mining based on this client is BCH.
BCH was first set up as a token generated by a hard fork to prevent BIP148 from splitting Bitcoin. BCH continues the ideas of Satoshi Nakamoto, a shadow of Bitcoin, and can assume the role of a test, backup for Bitcoin. So, technically speaking, BCH is not splitting bitcoin, it is just a measure to prevent a hard fork of bitcoin.
Despite their philosophical differences, Bitcoin Cash and Bitcoin share several technical similarities. They use the same consensus mechanism and have capped their supply at 21 million.
Since its creation, Bitcoin Cash has become one of the most successful forks of Bitcoin. It has lower transaction costs and faster speed.
Blockchain forks are not uncommon in Bitcoin and other cryptocurrencies, but generally, there is an agreement on which blockchain to use in the end. If an agreement cannot be reached, both blockchains will remain at the same time, and a new token currency will be created.
BCH’s Disadvantages
- As a fork of Bitcoin, no matter how it changes, it will be difficult for BCH to win over BTC loyalists in the short term without Bitcoin making a serious sexual mistake.
- As more and more bitcoins fork, cottage coins will become competitors to BCH. The digital currency’s single attribute limits its growth, after all, and BCH has the potential to be replaced as a means of payment circulation compared to open-source smart contracts or other application-based virtual coins.
Advantages of BCH
- Mining is currently gaining more and more participation and is widely recognized in the market.
- The block size is set at 8M, with fast transaction speed and large capacity, which solves the expansion problem.
- BCH development team is more open to block problem-solving compared to CORE and more willing to update block problems.
The basic idea of BCH is to recreate the meaning of the white paper title “Electronic Cash”, as BTC’s current block capacity is really unable to carry the most important function of cash, “payment”.
Judging from the recent development of BCH, there is an intention to return to pure “electronic cash”. It might be good to find a route and stick to it, or at least qualify for this competition.
At 18:16 GMT on November 15, 2018, the BCH hard fork was completed and officially split into BCH ABC and BCH SV.
The Bitcoin ABC solution is a technical route to on-chain expansion in order to keep the protocol stable and simple, removing the SegWit feature and supporting the increase in block size to 8M. The Bitcoin ABC code is based on a stable version of the Bitcoin protocol for improvement, which it believes will have greater stability, security, and robustness by not including SegWit.
