Bitcoin Cash: A Brief Introduction

2017 was a tremendous year ever for Bitcoin and the cryptocurrency and digital asset world at large. The alpha dog cryptocurrency leading the entire cryptoasset industry had a spectacular run from around $1000 per BTC at the start of 2017 to almost $20,000 per BTC at the end of 2017 - all this despite trial and tribulations throughout the year including a Chinese ban on cryptocurrency and digital currency mining and a denial by the Securities and Exchange Commision (SEC) of a Bitcoin exchange-traded fund (ETF). 

There was another trial/tribulation for Bitcoin in 2017, however. Despite its unprecedented surge, Bitcoin was (and still is) plagued with key problems that hinder its usability in a truly widespread manner as originally intended for this cryptocurrency - these problems might affect Bitcoin's future as an alternative currency to fiat currency and the current traditional banking and financial system. 

In August 2017, acting out of growing fear that Bitcoin would one day become too archaic and lose relevance in the cryptocurrency and digital currency industry, a group of Bitcoin developers split from the original cryptocurrency and created Bitcoin Cash in a process/procedure known as a fork.

First, what is a fork?

​A fork in the cryptocurrency world can be simply explained as the splitting of any cryptocurrency into two or more independent branches but which all share the same roots. A fork is said to happen when the core developers of any particular cryptocurrency or digital asset disagree on the future operations of the blockchain underlying that digital asset and, as such, decide to go separate ways. 

When a fork happens, the newer cryptoasset does not start from scratch from block zero or a genesis block but continues on from the point in the original blockchain when the split occurred. This means that all transactions and amounts of cryptocurrencies held by users on the old cryptoasset remain valid, but any future transactions are conducted independently of the original or parent cryptocurrency.

Bitcoin vs. Bitcoin Cash

​The main point of contention that led to the split in the core Bitcoin development community was the slow transaction processing speed that Bitcoin was dealing with. This, coupled with very high transaction fees that were born out of the very low number of transactions the Bitcoin blockchain could support at any given period of time, made some in the core bitcoin development community desire a change.

Bitcoin’s block size is pegged at just 1MB but was designed to be increased at a later date by the creator of the cryptocurrency, Satoshi Nakamoto, who (if this is, in fact, a single individual) was never heard from after 2010, but the upgrade was never carried out by the developers who have since taken over control. With the huge adoption of Bitcoin, whose blockchain could only carry out about 250,000 transactions every 24 hours, a lot of backlogs began piling up which meant that miners received larger and larger fees for mining (eg. validating transaction on the Bitcoin blockchain). This is the problem that Bitcoin Cash attempts to solve - with an increased block size of 8MB, transactions can be verified at a very much faster rate on-chain, which then translates into cheaper transaction fees.

The Future of Bitcoin Cash

Bitcoin Cash markets itself as the true image of what the Bitcoin founder Satoshi Nakamoto had in mind - it's not attempting to be some sort of alternative version of Bitcoin, but attempt to be regarded as the true Bitcoin itself. The core Bitcoin development team obviously disagree with this contention. from which the core Bitcoin has deviated. With time, the Bitcoin Cash development team hopes that this new cryptocurrency will become the number one cryptocurrency in the industry and be regarded as the one true Bitcoin.

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