What is Bitcoin Cash?
Bitcoin Cash (BCH) is a form of cryptocurrency much like Bitcoin. In fact, Bitcoin Cash was a fork of Bitcoin as a result of a chain split when a certain group of Bitcoin developers became dissatisfied with Bitcoin’s overall scalability direction.
In November 2018, the Bitcoin Cash community would later further split into Bitcoin Cash and Bitcoin SV via another hard fork. The latter camp, supported by Craig Wright and Calvin Ayre proposed a competing software version called Bitcoin Satoshi Vision that would take the block size limit further to 128MB.
The History of Bitcoin Cash
To sum it up simply, the Bitcoin Cash developers were originally dissatisfied with the decisions made in regards to Bitcoin’s development. Specifically, they were dissatisfied over the implementation of Segregated Witness (SegWit).
The Bitcoin Cash developers believe that SegWit is a compromise to the decentralization of the Bitcoin network. They believed that the network could have increased its block size instead in order to allow Bitcoin to grow as a currency.
Together, this group formed a plan to split from the Bitcoin blockchain and created Bitcoin Cash with a larger block capacity limit of 8 MB. Bitcoin went ahead with their plan to implement SegWit but the newly forked Bitcoin Cash did not implement SegWit.
On 15 May 2018, the Bitcoin Cash block size limit was subsequently increased from 8 MB to 32 MB.
On 15 November 2018, Bitcoin Cash experienced a chain split from within its own community that resulted in the creation of Bitcoin SV. The creators of Bitcoin SV argued that Bitcoin Cash is no longer staying true to the original vision of the Bitcoin Whitepaper and decided to split off to form their own coin.
How is Bitcoin Cash different from Bitcoin?
As Bitcoin Cash is a result of a chain split from Bitcoin, it shares much of Bitcoin’s fundamental workings. In fact, they even share the same history.
Due to it being a fork of bitcoin, all on-chain data prior to the split are inherited. If you owned 1 bitcoin before the creation of Bitcoin Cash, you now have 1 BTC and 1 BCH, which can both be signed using the same private keys.
However, Bitcoin and Bitcoin Cash are not non-interoperable. You cannot send your Bitcoin Cash to the Bitcoin network and somehow own 2 BTC. Your bitcoin cash and bitcoin now exists on two different sets of blockchains.
One of the main differences between Bitcoin and Bitcoin Cash is the block size limit and transaction fee. As Bitcoin Cash has bigger blocks and arguably lower usage, sending Bitcoin Cash on the network is relatively cheaper and faster than if done on Bitcoin.
In that sense, Bitcoin Cash does serve as a faster and more efficient form of digital currency as extolled by Bitcoin Cash proponents.
How do I store my Bitcoin Cash?
If you are new to cryptocurrencies or are not careful with key management, it can be confusing to deal with Bitcoin Cash especially if you own Bitcoin and other Bitcoin-forks.
Bitcoincash.org recommends a few wallets to use when storing your Bitcoin Cash. However, always do your own due diligence to select the best wallets that suit your needs.
One way of mitigating risk is to use hardware wallets such as Trezor and Ledger. Hardware wallets are essentially external devices that look like USB memory sticks. A hardware wallet secures your private key that holds your Bitcoin into an external device outside of your personal computer so you do not need to worry if your computer is infected with malware.
When you intend to transact, you simply connect the hardware wallet onto your personal computer and all the key signing would be done in the hardware itself.