Bitcoin Cash is a cryptocurrency. In mid-2017 the developers, not content with the Segregated Witness feature, implemented a change to the bitcoin code. The change, called a hard fork, took effect on August 1, 2017. As a result, the bitcoin ledger called the blockchain and the cryptocurrency split in two. At the time of the fork anyone owning bitcoin was also in possession of the same number of Bitcoin Cash units.
- 1 History
- 1.1 Idea forms
- 1.2 Development
- 1.3 Launch
- 1.4 Move of hashpower and difficulty adjustment
- 1.5 Block size increase
- 2 Market acceptance and naming
- 2.1 Cryptocurrency exchanges
- 2.2 Cryptocurrency wallets
- 2.3 Payment service providers
- 3 See also
- 4 References
- 5 External links
In May 2017, bitcoin transactions took up to four days to complete. In order to speed transactions, users could pay a transaction fee, which at the end of 2017 averaged about $28. The delay and especially the fees made bitcoin impractical for everyday use to make small purchases.
Up until July 2017, bitcoin users maintained a common set of rules for the cryptocurrency. On July 20, 2017 at block height 476768 Bitcoin Improvement Proposal (BIP) 91 was locked in (i.e. scheduled to activate at block height 477120). It was designed to reject blocks created by miners not supporting Segregated Witness (SegWit).
Some members of the bitcoin community felt that adopting BIP 91 without increasing the block-size limit favored people who wanted to treat bitcoin as a digital investment rather than as a transactional currency and devised a plan to increase the number of transactions its ledger can process by increasing the block size limit to eight megabytes.
The Bitcoin Cash name was originally proposed by Chinese mining pool ViaBTC.
The first implementation of the Bitcoin Cash protocol called Bitcoin ABC was revealed by Amaury “Deadal Nix” Séchet at the Future of Bitcoin conference in Arnhem, Netherlands. Subsequently, Bitcoin Unlimited made its first release of Bitcoin Cash compatible software, named BUCash and Bitcoin XT also released before the Bitcoin Cash fork. This meant that 3 full node clients were available before the Bitcoin Cash hard fork on August 1, 2017.
These clients implemented the following changes from bitcoin:
- Increase maximum block size to 8 megabytes.
- Modification of the transaction signature hashing algorithm. This provides replay protection for Bitcoin Cash transactions against the bitcoin chain.
- Replaced the original bitcoin difficulty adjustment algorithm (a difficulty adjustment every 2016 blocks), with the new Emergency Difficulty Adjustment (EDA) algorithm. EDA was intended to allow difficulty to more quickly respond to drastic drops in hashrate presumed to occur immediately post fork.
Upon launch, Bitcoin Cash inherited the transaction history of the bitcoin cryptocurrency on that date, but all later transactions were separate. Block 478558 was the last common block and thus the first separate Bitcoin Cash block was 478559. Bitcoin Cash cryptocurrency wallets started to reject bitcoin blocks and bitcoin transactions after 13:20 UTC, August 1, 2017 because it used a timer to initiate a fork. One exchange started Bitcoin Cash futures trading at 0.5 BTC on July 23; the futures dropped to 0.1 BTC by July 30. Market cap appeared since 23:15 UTC, August 1, 2017. Per the coinmarketcap.com site, the price of BTC on August 1, 2017 was USD$2,718.26 and the price of BCH was USD$380.01, which suggests the BCH split ratio to be 0.12265. The launch of Bitcoin Cash has created an ideological divide over which chain is the true bitcoin.
Move of hashpower and difficulty adjustment
On August 9, 2017 it was 30% more profitable to mine on the bitcoin chain. As both chains use the same proof-of-work algorithm, miners can easily move their hashpower between the two. As of August 30, 2017[update] around 1,500 more blocks were mined on the Bitcoin Cash chain than on the bitcoin chain as the high profitability periods attracted a significant proportion of total processing power. Due to the new Emergency Difficulty Adjustment (EDA) algorithm used by Bitcoin Cash, mining difficulty fluctuated rapidly, and the most profitable chain to mine switched repeatedly between Bitcoin Cash and bitcoin.
A fix for these difficulty, hashrate, and profitability fluctuations was introduced on November 13, 2017 at 7:06 p.m. UTC. The EDA algorithm has been replaced with a new difficulty adjustment algorithm (DAA) that hopes to prevent extreme fluctuations in difficulty while still allowing Bitcoin Cash to adapt to hashrate changes faster than the original bitcoin algorithm adjusting the difficulty every 2016 blocks.
Block size increase
On May 15, 2018 the protocol was upgraded via a planned hard fork to increase the block size limit from 8 to 32 Megabytes.
Market acceptance and naming
By the end of August 1, 2017, Bitcoin Cash became the third largest cryptocurrency in terms of market capitalization.
Bitcoin Cash has been adopted by digital currency exchanges. Exchanges such as Coinbase, Kraken, ShapeShift and many others use the Bitcoin Cash name and the BCH ticker symbol for the cryptocurrency. Bitstamp and Bitfinex temporarily used the name Bcash, but after being criticized, they switched the name back to Bitcoin Cash.
Bittrex, Binance, and Huobi exchange use BCC as Bitcoin Cash’s ticker symbol instead. BCC is more commonly used as the ticker symbol for Bitconnect.
Cryptocurrency wallets such as the Ledger hardware wallet, KeepKey hardware wallet, Electron Cash software wallet and Bitcoin.com software wallet support Bitcoin Cash, using either BCH or BCC as the ticker symbol for it. Bitcoin Cash is also supported by the Trezor hardware wallet and the Blockchain.info wallet.
Payment service providers
The cryptocurrency payment processor Bitpay added support for Bitcoin Cash on March 28, 2018.
- List of bitcoin forks
- List of cryptocurrencies
- Media related to Bitcoin Cash at Wikimedia Commons
- Official website
- Anonymous Internet banking
- Bitcoin network
- Complementary currency
- Cryptocurrency exchange
- Digital currency
- Electronic money
- Initial coin offering
- Virtual currency