Bitcoin Cash (BCH) came about as a result of a fork from Bitcoin on 1 August 2017.
Why did the fork happen?
The fork occurred due to a long going debate in the Bitcoin community over how to scale Bitcoin. Bitcoin’s blocksize limit remains at 1MB, whilst BCH wanted to increase the limit to 8MB. According to the Bitcoin Cash website:
The legacy Bitcoin code had a maximum limit of 1MB of data per block, or about 3 transactions per second. Although technically simple to raise this limit, the community could not reach a consensus, even after years of debate.
Why did Bitcoin’s Blocksize matter?
The supporters of Bitcoin Cash were concerned about the 1MB limit as it meant that transactions were slow. The network could not handle the amount of transactions that were taking place at the required pace. This led to an increase in fees, as users paid miners more in order to add their transaction to the first available ‘block.’ Users were discouraged from sending small tranactions due to the fees payable.
Supporters of Bitcoin Cash found this unacceptable, they were concerned that this would lead to people no longer using Bitcoin.
In 2017, capacity hit the ‘invisible wall’. Fees skyrocketed, and Bitcoin became unreliable, with some users unable to get their transactions confirmed, even after days of waiting.
Bitcoin stopped growing. Many users, merchants, businesses and investors abandoned Bitcoin. Its marketshare among other cryptocurrencies quickly plummeted from 95% to 40%. (BitcoinCash.org).
What did Bitcoin Cash do to fix this apparent problem?
The increase in the blockchain’s size means that BCH allows for more transactions to take place per day, at a faster and cheaper rate.
Bitcoin Cash immediately raised the block size limit to 8MB as part of a massive on-chain scaling approach. There is ample capacity for everyone’s transactions.
Low fees and fast confirmations have returned with Bitcoin Cash. The network is growing again. Users, merchants, businesses, and investors are building the future with real peer to peer cash. (BitcoinCash.org)
What does the future hold?
It is extremely difficult to predict the future, especially in the Crypto world. A week ago the Crypto world was preparing for the ‘Segwit2x’ hard fork, which did not happen. We are very much still at an early stage. Cryptocurrencies and blockchain technology have yet to really take off (despite what some may think).
On 1 August many did not know what Bitcoin Cash was or how it intended to operate. We have much more information now, and it appears to be here to stay (of course that could change very quickly). The ideaology behind Bitcoin Cash seems to be in line with that of Satoshi Nakamoto
We have been following Bitcoin Cash for a while. On 5th November we posted on Bitcoin Cash whilst the price was $620. It has since risen to over $2,500 before falling to a current price of $1,230.
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