What is Bitcoin Cash ($BCH)
Bitcoin Cash is a blockchain network based on the Proof-of-Work (PoW) consensus mechanism, and $BCH is the native token of this network. $BCH can be used for various purposes, including peer-to-peer transactions, online purchases, investment, value storage, etc. In 2017, the Bitcoin Cash network split from the Bitcoin network, becoming a variant or "hard fork" of Bitcoin.
A "fork", in essence, is a split within a blockchain network or community. It occurs when there are intentional/unintentional changes to the original rules of the blockchain network. In the case of a "hard fork", the previous version and the new version are completely separate, with no communication or transaction channel between the two.
For more information on the concept of "fork," please refer to the content: What is Fork
This hard fork occurred due to disagreements within the BTC community regarding the scalability and efficiency of the original Bitcoin network. Unlike the original BTC community's resistance to censorship and the goal of minimizing trust, supporters of the BCH network advocate for the establishment of a "peer-to-peer electronic cash system" as its core principle. They aim to achieve faster and cheaper transactions, by increasing transaction throughput and reducing transaction fees of the network.
Specifically, in the initial design of Bitcoin, each block had a size limit of 1MB. As Bitcoin gained more widespread use, the 1MB block size proved to be restrictive in processing a large volume of transactions, resulting in high latency and high transaction fees across the network.
BCH network's proposal was to increase the block size from 1MB to 8MB, allowing for a higher number of transactions the network can handle. (Since May 2018, the block size limit for BCH has further increased to 32MB.) From this perspective, $BCH is indeed a faster, more efficient, and more suitable version of $BTC for everyday use. Consequently, the BCH community believes that $BCH aligns better with Satoshi Nakamoto's original intention.
Indeed, as a fork of the Bitcoin network, $BCH shares several similarities with $BTC: both utilize the PoW consensus mechanism; both are decentralized networks, allowing anyone to participate and contribute; the target block time for both networks is approximately 10 minutes; the maximum supply for both cryptocurrencies is 21 million coins; approximately every 210,000 blocks (around four years), the systems undergo a halving event, reducing the issuance of new tokens.
Why does the issuance rate halve every four years? What does it mean for the entire network? Please refer to the content: What is Bitcoin Halving
In November 2018, the BCH network itself also experienced a fork, resulting in two separate chains. This fork originated from a disagreement among the development teams behind BCH regarding a network update. In August 2018, Bitcoin ABC, backed by Bitmain, proposed a consensus update to add more functionalities to the BCH network, to pave the way for future support of smart contracts. However, nChain, another team within the development community, rejected this proposal, commenting it was a "betrayal of Satoshi and the P2P electronic cash system." As a result of this community split, the BCH network was ultimately forked into BCH (led by Bitcoin ABC, also known as BCHABC) and Bitcoin SV (BSV, SV representing "Satoshi's Vision", led by nChain).
It's worth mentioning that Craig Wright, the founder of nChain, has repeatedly claimed to be Satoshi Nakamoto, although he has not provided conclusive proof to support this claim thus far.
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