How was Bitcoin Cash (BCH) created?

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How was Bitcoin Cash (BCH) created?

About Bitcoin Cash (BCH)

Hard forks can instigate new projects when politics happen to blockchains. Bitcoin Cash (BCH) was created by a group of developers, entrepreneurs, investors and miners who were not satisfied with Bitcoin’s development plan. Born in August 2017, Bitcoin Cash is a peer-to-peer electronic cash system focused on increasing scalability and low transaction fees. It is also known as Bitcoin ABC (Adjustable Volume Cap Size).

How was Bitcoin Cash (BCH) created?
How was Bitcoin Cash (BCH) created?

Blockchain scalability

Bitcoin suffered from growing transaction fees and long transaction confirmation times in 2017, detracting from the original premise of near-instant payments with very low fees. There was a fierce debate in the Bitcoin community about the impact of increasing the block size limit before Bitcoin Cash was created.

Proposed changes to the protocol require broad consensus because Bitcoin is decentralized. Therefore, all network nodes need to reach consensus when updating and making changes to the Bitcoin software.

Bitcoin Cash was introduced as a more scalable cryptocurrency, with reduced confirmation times and transaction fees. The BCH community argues that the project is more in line with Satoshi Nakamoto’s proposal for a peer-to-peer cryptocurrency. Mainly because this altcoin offers a cheaper and faster payment system that may be more suitable than Bitcoin for everyday use.

After the Bitcoin Cash fork, the original Bitcoin blockchain underwent a long-awaited soft fork upgrade to implement a technology called SegWit (Segregated Witness). One such upgrade was created by Bitcoin developer Pieter Wuille in 2015. It was deployed on the Bitcoin network to solve the problems of scalability and network congestion.

The SegWit soft fork was planned ahead of the BCH hard fork, but Bitcoin Cash proponents argue that SegWit is an inferior alternative to increasing the block size limit. The Bitcoin Cash fork from Bitcoin has been backed by a number of notable members of the blockchain industry, including Roger Ver (CEO of and Jihan Wu (Co-founder of Bitmain).

How does BCH work?

Bitcoin Cash is forked from the original Bitcoin source code directly. Therefore, it has many similarities. Both networks run the Proof of Work consensus mechanism and are open to anyone to contribute and participate. In addition, any address with BTC prior to the fork will receive an equal amount of BCH after the fork (on different networks with the same address chain).

Just like Bitcoin, BCH also has a maximum supply of 21 million coins and a block target time of 10 minutes. BCH’s emission rate halves every 210,000 blocks (about every four years). The current block reward is 6.25 BCH per block.

Unlike Bitcoin, Bitcoin Cash has an increased block size limit, allowing for more transactions in each block. The block size limit was initially increased from 1 MB to 8 MB and then raised again in 2018 to 32 MB.

However, the reality is that the average block size of BCH has only surpassed 1 MB a few times since 2017. We can see a comparison between the average block sizes of BCH and BTC at

Both Bitcoin Cash and Bitcoin adjust their mining difficulty through the so-called difficulty adjustment algorithm (DAA). However, Bitcoin Cash’s mining difficulty is adjusted after each block while Bitcoin’s difficulty adjusts every 2016 blocks.

Previously, Bitcoin Cash also implemented an emergency difficulty adjustment algorithm (EDA) to reduce mining difficulty, incentivizing miners to join the network. However, the algorithm was dropped due to instability. The implementation of EDA is one of the reasons why the BCH blockchain is thousands of blocks ahead of Bitcoin.

In 2019, Bitcoin Cash implemented an alternative algorithm that changed the way digital signatures are used – technology called Schnorr Signatures. The Schnorr Signatures scheme is very secure and simple, and allows for more scalability and privacy than the ECDSA scheme currently used by Bitcoin.

Main features of BCH

  • The BCH source code is based on the original Bitcoin protocol.
  • As a fork of Bitcoin, BCH uses the Proof of Work (PoW) consensus mechanism to issue new coins.
  • Bitcoin’s supply is limited at 21 million.
  • The community argues that the ethos of BCH more closely matches Satoshi’s original plans.
  • Increase block size (from 1 MB to 32 MB).
  • BCH mining difficulty is adjusted after each block through a difficulty adjustment algorithm (DAA).
  • BCH did not implement SegWit.
  • In 2019, BCH implemented Schnorr Signatures.
  • Smart contract development is available as an update later.

Daily payment

The Bitcoin Cash community believes that BCH is designed to be used like money. You can use it to quickly send and receive money to and from businesses or individuals who have a BCH wallet. With low fees and fast transaction times, BCH may be more suitable for everyday use than Bitcoin, especially when making small payments.

While there are merchants and stores that accept Bitcoin Cash as payment, it doesn’t seem to be widely available yet. The map flags thousands of stores to accept BCH from June 2021, but the majority of them currently do not mention or offer such a payment option. This indicates that the map is incorrect or out of date.

How to Store Bitcoin Cash (BCH)

You should use Trust Wallet, that’s our advice. There are hundreds of other crypto wallets that support BCH, such as the Trezor, Ledger, and Cobo Vault hardware wallets. BCH can also be stored on a desktop wallet like Electrum Cash.

Some Bitcoin Cash proponents recommend using a Coinomi or wallet or for storing BCH. Both of these software wallets are available on Linux, Windows, Android, Mac, and iOS.

It is important to note that BTC and BCH run on separate blockchain networks. Bitcoin cannot be sent to a Bitcoin Cash wallet address and vice versa.

Bitcoin SV

Part of the Bitcoin Cash community forked the protocol to create another crypto – Bitcoin Satoshi Vision (also known as Bitcoin SV or BSV) in 2018, which has an even large block size limit. than 2 GB.

The controversial hard fork was supported by Calvin Ayre and Craig S. Wright and the event is known as the Hash War. However, BSV did not receive great support from the crypto community. The lack of support and acceptance may be related to Craig S. Wright’s false claims about being the inventor of Bitcoin, Satoshi Nakamoto.

Closing thoughts

Among the thousands of crypto projects forked from Bitcoin, BCH is the one that has managed to stay relatively consistent. While it may not experience the same heights and notoriety as Bitcoin, you can still find stores that accept BCH payments, especially due to faster confirmation times and lower transaction fees.

However, the larger block size also brings with it network security concerns, and as such, Bitcoin is still believed to be the most secure blockchain network. Additionally, Bitcoin continues to be the most popular cryptocurrency, meaning that BCH has lower market liquidity and adoption than BTC.

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