It is very important to know the characteristics of Bitcoin cash, where it was born and how it works, since it is one of the most important cryptocurrencies today, it has become very popular and has great expectations for its future.
What is Bitcoin cash?
Bitcoin Cash is a cryptocurrency that was born as a result of the first major hard fork Bitcoin suffered, and aims to surpass the latter, in terms of its scalability and ability to serve as a payment system on a global scale.
With the fork that gave rise to Bitcoin cash BCH, it was hoped to solve some problems that by design Bitcoin cannot overcome, such as:
1 Limited size blocks.
Bitcoin has its block size limited to 1 MB, which is poor in the eyes of Bitcoin Cash developers. To overcome this, they decide to do a hard fork and set a size limit of 8 MB. With this change, they hope to include more transactions per block and improve scalability.
2 Very high transaction fees.
There are times when transaction fees are very high. From the point of view of the developers of Bitcoin Cash, this threatens the massification and use of micropayments.
Technical characteristics of Bitcoin Cash
Some features of Bitcoin cash are:
Its mining is identical to that of Bitcoin. For the mining process, the Proof of Work (PoW) consensus protocol is used together with the SHA-256 hash. This means that Bitcoin mining equipment is used to mine Bitcoin Cash with some simple modifications.
b. Block Size
Bitcoin Cash has suffered throughout its existence changes in the limit size of the blocks of its blockchain. First of all, the block limit was set to 8 MB. With this block size, more than 8 times the transaction capacity of Bitcoin, about 20,000 transactions, could be processed per block. In May 2018 there would be another change in the size of the blocks that would take it up to a limit of 32 MB. With this, each block could host up to 40,000 transactions.
c. transactions of 0-conf
One of the features of BCH is its ability to accept 0-conf transactions. These refer to transactions that are taken as carried out without having confirmations in the blockchain.
However, this carries a significant risk of double spending, to counteract this problem Bitcoin Cash allows miners to maintain mempool transactions with unique identifiers that are managed by nodes and miners. This prevents, for example, a Bitcoin Cash user from sending a transaction and replacing it with another using the same coins. With this they would seek to invalidate the first and make a double expense.
How Bitcoin Cash works
Like Bitcoin, BHC has a block time of 10 minutes (approximately) and a maximum supply of 21 million coins. As with Bitcoin, in BCH every 210,000 blocks (about 4 years) the reward per block is reduced by half, in a process called halving.
Bitcoin cash (BCH) was created after a hard fork with bitcoin in December 2017, it is both a cryptocurrency and a payment network. Because of bitcoin cash’s characteristics, the goal of increasing the number of processable transactions has been met.
What factors affect the price of bitcoin cash?
- Regulation: Like other cryptocurrencies, bitcoin cash is currently not regulated by governments or central banks. There are doubts about how this situation can change over the next few years and what effect it could have on its value.
- Supply: Bitcoin cash has a total supply of 21 million (same as bitcoin). Limited supply could affect its value.
- Competition: Bitcoin cash competes directly with bitcoin as well as other cryptocurrencies. This could limit the popularity of bitcoin cash.
- Reputation: Prices can be affected by public perception, security and longevity of the currency.
- Adoption: Businesses and consumers have not widely adopted currency as a payment method. However, some see potential in the technology
The views and opinions expressed herein are solely those of the author and not necessarily those of Bixxus. Your cryptocurrency investments involve risks and you should do your own research.