Bitcoin Cash is a peer-to-peer electronic cash system. We need to have a little brief history of BCH. Bitcoin Cash was firstly released on August 17, 2017, as a hard fork of Bitcoin.
Fork means programm code modification. Hard fork makes changes in the protocol with no backward compatibility. It means that the older blocks will be rendered invalid in the blockchain. So users can interact with the new type of blocks only if they are updated. The way a fork works is instead of creating a totally new cryptocurrency (and blockchain) starting at block 0, a fork just creates a duplicate version that shares the same history.
Because the community could not reach a consensus on increasing the network capacity that was due to the block size in Bitcoin blockchain, which = 1MB. The block stores transactions and when it fulfills the other block is needed to be created to make new transactions move.
Block mining is a complicated process which takes a lot of time and energy. Also, the miner, who found a block receive fee payments for each transaction. In 2017 Bitcoin was overloaded with transactions and sometimes the users waited for days to complete one. There also were speculations with fees, if you’d like to make transaction faster or to increase your priority you can place a higher fee to get preferences among other users. Increasing fees Bitcoin as a payment system was facing hard times with these situations, it shows that it isn’t fast, easily accessible and fully decentralized.
As reward is halved in every 210,000 blocks and block mining difficulties constantly increasing, the mining pools have been created, which are always interested with high fees and profits. For $40 transaction people would have to pay $25.
There were some attempts to implement changes in the Bitcoin protocol, to increase block size up to 2 MB, but they were not successful. Miner community wasn’t interested in making any changes in block rates, cause it may lead to lowering fee costs.
To solve the aforestated problem Bitmain presented Bitcoin ABS as a hard fork which would make necessary improvements in protocol saving the idea of transparency and decentralization. Soon the project received public acclaim and the name “Bitcoin Cash”.
First of all - the block size. In BCH protocol it’s 8MB. It means that it can contain 8x times more transactions, so the fees cost will be rather small compared to Bitcoin. As it stated on official website”The network fee for a typical Bitcoin Cash transaction is less than one penny.”
No SegWit support. It means, that all the data is stored in blockchain only. And no other parties have any access to it. No priority with higher fees. The systems make changes in the block mining difficulty to attract miners and prevent blockchain from creating mining pools that may have control over the system. The Median Time Past which shows the time when the last 11 blocks were created to predict the time when the future block will be created. If the Median Time Past of the current block and the Median Time Past of 6 blocks before is greater than 12 hours then the difficulty reduces by 20% i.e. it becomes 20% easier for miners to find newer blocks.
Bitcoin Cash has a Replay Attack protection, sighash algorithm which helps to prevent users from sending transactions on the non-compatibility address. Like BTC instead of BCH for example. The problem is because the forks are working on the similar blockchain but with different protocols.
According to coinmarketcap Bitcoin Cash is on the 4 position by capitalization value counting $14+ bln dollars. It becomes valuable because of these factors: 8Mb blocks. Low fees. User’s trust in the future of coin. More convenient as a payment currency than Bitcoin.
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