You’ve probably seen a lot about Bitcoin Cash lately. Everyone’s talking about it but a lot of people not heavily versed in cryptocurrencies are probably finding themselves asking “What is Bitcoin Cash?” I’d like to explain it a little so that everyone can understand exactly what it is, but first we’ll need to talk about politics inside the Bitcoin community.
Bitcoin Core is the main client implementation of Bitcoin. Formerly known as Bitcoin-Qt, this is earliest and most widely-known Bitcoin client. Since Bitcoin’s inception, there’s been hundreds of individual contributors to this client. A lot of amazing things have come out of technology founded in Bitcoin’s development. Bitcoin sparked a multi-billion dollar industry, and has given rise to hundreds of successful businesses and companies. To say Bitcoin is awesome would be a vast understatement.
Since nearly the beginning, Bitcoin has been limited to 1MB blocks. If you don’t know, transactions made on the Bitcoin network consume disk space and are put into blocks. Initially, 1MB was more than enough. However, we knew that wouldn’t last. We knew we had to figure out a way to efficiently scale up to fit more transactions per block. Unfortunately, two political sides formed out of this. One side believes that 1MB blocks are large enough and that we should handle smaller microtransactions off of Bitcoin’s block chain in order to alleviate the extra load. By doing so, we create a “fee market” for Bitcoin, meaning that to move larger amounts of Bitcoins you’ll need to pay a substantial fee to the miners. The other side has a different opinion: larger blocks are the way forward.
Larger blocks would allow more transactions to fit in a single block. Unfortunately, Bitcoin Core believes that larger blocks won’t be a viable option as technology won’t be able to keep up with Bitcoin’s growth. “Big Blockers” think otherwise. We believe that technology will easily be able to keep up and Bitcoin Cash is our way to prove it.
So what is Bitcoin Cash?
On August 1, 2017, Bitcoin’s blockchain was forked to create Bitcoin Cash. This means that at the time of the fork, both blockchains were exactly the same. Bitcoin’s entire transactional history up to that point also exists on Bitcoin Cash. Anyone holding Bitcoin during the fork was also (and still may be, if they haven’t moved it yet) holding Bitcoin Cash. Bitcoin Cash is not Bitcoin, at least not any longer. It is important to understand Bitcoin Cash is different from Bitcoin. If you send Bitcoin to a bitcoin cash address, the recipient will not see it in his or her bitcoin wallet
Because Bitcoin Cash’s larger blocks mean that more transactions can fit in a single block, there won’t be any sort of fee market. This means consistently low transaction fees. Originally, Bitcoin was advertised as a “peer-to-peer electronic cash system.” It’s eventual goal was that people could use it for everything, from a small cup of coffee to buying entire houses. With Bitcoin’s current fees, it doesn’t make sense to use it to pay for small, every day items. Bitcoin Cash, on the other hand, brings us low fees again. Instead of paying upwards of $5 USD per transaction (and climbing) like you would on Bitcoin’s network, now you’re able to once again pay mere pennies for your transaction. This means we can use Bitcoin Cash for every transaction, like Bitcoin was meant to be.