Bitcoin cash has steadily gained traction since its introduction. Majority are familiar with Bitcoin but probably not so much about Bitcoin cash. There have been different schools of thought about how Bitcoin cash originated. The dominant idea is that Bitcoin cash is a hard fork of Bitcoin which was formed after disagreements with Bitcoin about the direction of the cryptocurrency. This resulted to creation of Bitcoin cash, a peer-to-peer electronic cash system. However, for the Bitcoin cash community, Bitcoin cash is the closest to what the original Bitcoin whitepaper by Satoshi Nakamoto envisioned. Therefore it is not an altcoin.
One of the main proponents of Bitcoin cash is Roger Keith also known as ‘Bitcoin Jesus’ who says that Bitcoin cash is gaining more merchant adoption and becoming efficient to use as a means of payment than Bitcoin, or Bitcoin core if you like. Therefore the proponents of Bitcoin cash say that it can be used as money for the whole world while Bitcoin cannot because Bitcoin cannot scale while still on chain while Bitcoin cash can scale on chain. Here is the interview.
Bitcoin was introduced in 2009, as the world’s first cryptocurrency meaning it was a peer-to-peer system that enabled parties to undertake transaction without relying on third parties such as financial institutions. It has recorded tremendous growth since introduction and currently and with its current price of about $7500 has the largest market capitalization of over $130BN according to coinmarketcap. However, as more users got into the Bitcoin network, it started to face challenges. It faced scaling challenges because transaction costs became expensive and confirmation times became long.
There have been disagreements about how to solve this. One camp believes that increasing the block size, which is 1MB, would solve this while another believed Bitcoin should remain the way it was initially conceived. One suggestion was a SegWit which is a soft fork meaning that system upgrades are conducted on blocks, miners, wallets, APIs, libraries etc. These partial upgrades however could only result to increase in block size ip to 1.7 MB. The other option was complete split to form a completely new cryptocurrency.
This led to a hardfork that resulted to formation of Bitcoin cash. Supporters of Bitcoin believe that maintaining the 1MB block size is the ‘invisible hand’ that ensures attack on the system is highly minimized. Therefore it seems that the block size debate is about economic capability and system survival. Also, some supporters of Bitcoin say it was never meant to be a currency but as ‘digital gold’ or a store of value.
Peer-to-peer electronic cash
Bitcoin cash is ‘peer-to-peer electronic cash’ that has low fees and reliable transactions confirmations. It is a hard fork of Bitcoin due to disagreements on how to scale Bitcoin specifically due to the issue of increasing transaction fees and slow transaction confirmation times that had befallen Bitcoin at the time of the split. Therefore, Bitcoin cash was formed in August 2017 with the idea that on-chain scale is possible and therefore increased the block size limit from 1MB to 8MB with promise of future block size increases. Some other cryptocurrencies that are also seeking to solve the issue of scalability have proposed off-chain transactions so that the blockchain is only used as settlement layer order to enable faster transaction speeds. Remitano , the Seychelles based trading and remittance platform, introduced Bitcoin cash saying that it is cheaper and offers lower transaction fees than Bitcoin.Bitcoin cash is set to fork again on May 2018 and the block size is expected to be raised again from the current 8MB to 32MB. Compared to Bitcoin, the block size is still 1MB.
The adoption of Bitcoin cash is growing.Its ability to grow within a few months to its current status has been impressive. proponents are keen on rolling out as global decentralized currency that is used by merchants globally. There are developer meetups globally as the community seeks ways to ensure merchants understand the various ways they can use Bitcoin cash to settle payments. Here in Kenya there is a meetup that has been organized by BitcoinCashKE taking place this Saturday 14th April at Pepino’s Pizza conveniently located at Nairobi CBD. interested parties can register to attend on this Eventbrite link.
We will keep tab of more developments with Bitcoin cash.