Bitcoin Cash: what it is and how it works
Bitcoin Cash (BCH), the Bitcoin Hard Fork
Bitcoin Cash is a peer-to-peer electronic money system. It is a decentralized cryptocurrency without permits that does not require trusted third parties or a central bank. '
Source: BitcoinCash.org
Today there are more than 2,000 cryptocurrencies on the market, although, since its entry into the Market Cap, Bitcoin Cash - the 'hard fork' of Bitcoin - has always attracted a lot of attention from the bitcoiners community.
What is a hard fork?
Bitcoin Cash is the hard fork of Bitcoin
Before talking in depth about Bitcoin Cash and its creation, we will quickly explain what a Blockchain Hard Fork is , to better understand the nature and characteristics of Bitcoin Cash.
Hard Fork means "bifurcation" and, in the specific case of the blockchain, a Hard Fork generates a bifurcation or division of the blockchain into two chains (one will be the original and the other the new).
The new chain created will be subject to rules other than the original , while the latter will retain its characteristics.
After the Fork, the two chains and their respective transactions are no longer compatible, while the blockchain, in which the transaction history occurred, remains intact until the moment of the bifurcation.
In addition, after the bifurcation, all holders of the original token will have the equivalent of the new currency generated with the Fork .
This means that if a user owns 20 bitcoins, after a fork he will continue to own 20 BTC and, at the same time, he will get 20 tokens from the new cryptocurrency created after the Hard Fork .
If you want to explore the meaning and characteristics of a Hard Fork, we recommend reading an article dedicated to the topic What is a Hard Fork and what effects does it produce?
Therefore, the creation of the Bitcoin Cash (BCH) token is certainly one of the most significant examples of Hard Fork linked to litigation .
In the next paragraph we will see how Bitcoin Cash was born and what characteristics differentiate it from the first cryptocurrency in history: Bitcoin.
How BITCOIN CASH was born
Bitcoin , the famous cryptocurrency in circulation, has undergone a very rapid growth, a trend that will most likely continue in the near future, despite being subject to very significant fluctuations.
However, this increase highlighted some technical limitations of the virtual currency and its infrastructure , so bifurcation became indispensable.
It was August 1, 2017 when a group of miners, developers and investors decided to start a fork of the original Bitcoin blockchain, starting from block 478558 , from which the new Bitcoin Cash token was born.
BITCOIN CASH FEATURES
In this section we will find out the main features of this token and how it differs from bitcoin .
Bitcoin Cash y Bitcoin: diferencias
Increasing the block size limit
One of the main differences between bitcoin and Bitcoin Cash lies in the fact that bitcoin supports 1 MB blocks , while Bitcoin Cash reaches 32 MB , which means it can support more transactions per second and lower commissions .
Therefore, this feature attempts to solve two of the limitations of the Bitcoin network:
The 1 MB block size limit
High commissions per transaction
Mining algorithm SHA-256 (Secure Hash Algorithm)
SHA-256 is a cryptographic hash, a type of transaction signature that guarantees the security of transactions.
The type of algorithm used by Bitcoin Cash is SHA-256 , the same used by the Bitcoin network.
Elimination of the Segwit protocol
The Segwit or Segregated Witness is a scalable protocol that led to an update of the Bitcoin software, trying to solve one of the weaknesses of the Bitcoin network, the malleability of transactions .
In the Bitcoin Cash network, Segwit has not been used and each transaction contains its own unique digital signature.
Signature Hash
Other features of Bitcoin Cash include Signature Hash , a new transaction signature system that improves the security of the hardware wallet and eliminates the problem of quadratic hash .
