Bitcoin Cash -Everything You Need to Know

bitcoin cash

Bitcoin Cash -Everything You Need to Know

Bitcoin Cash is an independent blockchain and cryptocurrency which came to life in August 2017 as a result of a splitting of the original Bitcoin blockchain. This happened after a prolonged debate within the network’s community as to how best to find a solution to the “clogging” network as users continued to increase.

Splitting of the chain, which is also known as a Hardfork is a permitted process in the world of blockchain. As a matter of fact, it is a fundamental characteristic of the original Bitcoin creation which leaves the code in open source for developers to either adjust the rules of the protocol on the same chain, or create an entirely new protocol and in effect a new independent chain.

Adjusting the protocol rules on the same chain is regarded as a Softfork, while creating an independent blockchain, which is the case with Bitcoin Cash, is known as a Hardfork.

A Debate Between Miners and Developers

The debate that lead to the creation of Bitcoin Cash revolved around how to resolve the blocksize issue on the Bitcoin blockchain. Upon the creation of Bitcoin, the size of a block of transaction was limited to 1MB. This block would contain both the data of the transaction, and the transaction itself. As more users joined the network, this blocksize limit became a problem as it caused transaction delays and also limited the number of transactions the network can process.

The above described situation had negative repercussions on the network as transactions became extensively delays, and the fees charged by miners skyrocketed due to increased competition in verifying transactions. A cumulation of these negativities had an adverse effect on Bitcoin, since it was losing value as a transaction vehicle based on high fees and delayed transactions.

After proposing varying solutions to this problem, the Bitcoin community appeared to split into two distinctive groups. One group was the miners who favoured “Bitcoin Unlimited”. This is a protocol that would remove any limits to the blocksize, in effect, blocks will not pile up anymore and consequently overall fees for the blocks will increase.

The second group which was made up of developers wanted the Segregated Witness(SegWit) protocol. This proposal would separate the transaction information from the transaction itself and store them in a separate file outside the blockchain, thereby freeing up space.

The Birth of Bitcoin Cash

While this debate continued, a third proposal emerged which suggested storing some of the information outside of the blockchain and increasing the blocksize to 2MB at the same time. This protocol was voted for by the majority of the miners as it seemed to favour them in August 2017 and implemented, and that is how Bitcoin Cash was born.

Shortly afterwards, this protocol was abandoned as another variation which increased the blocksize to 8MB instead was introduced and subsequently a Hardfork was carried out and a new blockchain emerged.

The cost effective advantage of Bitcoin Cash is considered by many as a key reason for its widespread adoption in the blockchain ecosystem. Shortly after creation, it rose to become the third most valuable cryptocurrency, leaping off previous forks of Bitcoin that have been around for years.

Among the frontline proponents of Bitcoin Cash are Roger Ver who is popularly known as the Bitcoin Jesus, Amaury Sechet, and several other developers and investors within the ecosystem.

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