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Bitcoin Cash: Bitcoin’s First Fork

  • 29 August 2017
  • Dylan Dedi

Block 478558 of the Bitcoin network marked the day that Bitcoin Cash would come into the world. Bitcoin cash is a fork of the Bitcoin network and offering a revolutionized version of Bitcoin. If you owned Bitcoin on August 1st, you were given an equal amount of Bitcoin Cash (BCC) and Bitcoin (BTC) that was in your account.

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Much talk was of Bitcoin Cash plummeting and failing as soon as it birthed, and it has gone through extreme volatility, but it is now correcting and showing stable patterns, patterns for a BCC to last longer than anyone expected. And once you learn about what Bitcoin Cash is all about, you might consider switching over as well.

1. The Fork

BTC was the original Bitcoin then, and BTC is the original Bitcoin now. Unlike Ethereum, Bitcoin Cash forked off of the original blockchain to create the more questionable blockchain. Ethereum forked off of itself and called the original “Ethereum Classic,” while the new blockchain was called “Ethereum.” A fork normally comes to a blockchain when a consensus cannot come to an agreement about a decision in the blockchain. Because there is no centralized government in these decentralized blockchains, a portion of the community can split off and make their own blockchain if they want.

2. Block Limit Increase

As big reason for the fork were the large fees accruing from Bitcoin because of their small block size. Bitcoin Cash increased the block size limit from 1 MB to 8 MB. A 1 MB block can fit far less transactions within it, which causes Bitcoin to only be able to handle about 4-8 transactions per second. To compare, Paypal can handle about 193 transactions per second, and Visa can handle up to 1667. Bitcoin Cash will be able to handle 8 times as many transactions as Bitcoin with this block size.

3. SegWit2

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SegWit2 was the catalyst for the fork. Bitcoin’s plan to activate SegWit2 in November upset community members, who believed that it would not help Bitcoin become a more effective coin. This change in the blockchain would increase the block size of Bitcoin by 1MB, changing the size to 2MB. This argument is what lead to the final decision for the fork because members of what is now Bitcoin Cash realized that Bitcoin was never going to change for a drastically bigger block size. Colin Culianu, one of the key founders of Bitcoin Cash, truly believes that SegWit2 will not work for Bitcoin in November and many people will switch to Bitcoin Cash during this time.

4. BCC believes have BTC will fail soon

Bitcoin Cash sees the block size to be a huge problem with Bitcoin. Because of how many transactions go through BTC per day, it started getting to the point where confirmation on a transaction could take a day. Bitcoin is definitely the slowest when it comes to receiving money a user is transferring. This could make BTC not a practical, globally scalable currency solution. BCC believes that it is possible that investors are buying BTC solely because it is the name that everyone knows.

5. Proof of Work

Bitcoin cash can be mined and is highly competitive when it comes to profitability against Bitcoin. There already have been some days where BCC was more profitable to mine than Bitcoin. Bitcoin Cash has also created a way to correct the difficulty of the proof of work much faster than Bitcoin can.

6. Bitcoin Cash is targeting the Fiat-World

Looking on their website, you can find a lot of the information is directed towards real world use of Bitcoin Cash. There is a table that compares Bitcoin Cash not to Bitcoin, but to gold and fiat.

Source: bitcoincash.org

It lets Fiat users understand what the advantages would be to switch from their holdings in traditional currencies to BCC. The large majority of the world has only barely heard of Bitcoin and the rest of the world is what BCC is targeting.

7. Doubling of Coin

The fork of Bitcoin had lead to everybody owning Bitcoin to receive an equal amount of Bitcoin Cash. This is because Bitcoin Cash still holds the Bitcoin blockchain. Basically, the Bitcoin Cash blockchain still has all of the blocks from Bitcoin, just as Bitcoin does.

8. Top Ten Coin

Despite the extreme volatility of Bitcoin Cash in the beginning, Bitcoin Cash is currently a top 5 coin in terms of market cap. This may have to do with the fact the many users on exchanges such as Coinbase cannot currently withdraw their Bitcoin Cash (not until 2019), but it also may be that many investors are beginning to believe in it. The consensus seems to be that everyone first gets involved in crypto because of Bitcoin. Once you get involved, though, and see the aspects of all the other coins, you begin to see that Bitcoin isn’t all the great now. Bitcoin Cash is a nice alternative to those who feel weary of Bitcoin, but don’t want to invest in something too different.

9. Increased community

BCC has only been around since August 1st, but since then strong believers have come together quickly to develop a solid Reddit, Slack, and other communities to quickly spread the word of Bitcoin Cash. Bitcoin Cash users truly believe in Bitcoin’s legacy and believe that Bitcoin Cash will save it from its eventual demise. Bitcoin cash will be the way that Bitcoin can adapt to all these super high-speed transactions that are now the norm in most cryptocurrencies.

10. So much action in so Little time

I remember checking my Blockfolio the day that BCC came in existence. It started around 200-300, and within an hour it was up to $900. BCC has gone through some extreme ups and downs, causing massive panic sells and fomo buys. I don’t think we are quiet finished yet with seeing a volatile game played out in Bitcoin Cash, but after all the chaos, Bitcoin Cash will continue to fight for its right to become the most trusted Bitcoin blockchain.

About Dylan Dedi

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