What is Bitcoin Cash (BCH) – Everything You Need To Know

Bitcoin Cash

I am sure if you are reading this, you might know about the current Bitcoin scaling issue. This issue is not new, but it seems like it is about to reach its climax.

Multiple users, miners, and developers are clinging to multiple solutions to solve the overarching Bitcoin scaling debate. And everyone is deciding which side to join in the chaotic situation of this upcoming Bitcoin fork.

Which side are you joining?

If you don’t understand what I am talking about, check out the scaling debate and the fork issue here.

So here are some technical jargons you may have seen:

  • UAHF-User activated hard fork
  • UASF-User activated soft fork
  • The New York Agreement
  • SegWit
  • SegWit2x
  • BIP 141
  • BIP 91
  • BIP 148

These don’t help normal users and do little good. In my opinion, this has only led to a lot of the present day’s FUD (fear, uncertainty, and doubt) in every Bitcoiner’s mind who doesn’t understand these jargons.

So I thought of covering the latest on this Bitcoin drama without getting deep into these technical jargons for now. (Soon, I will publish a separate guide on all these jargons related to the BTC fork…)

For now, you should just know that our original dearest- Bitcoin (BTC), which Satoshi Nakamoto created, is likely going to split on August 1, 2017.

The new split of Bitcoin will be called Bitcoin Cash.

Wondering what that is?

What is BCH: Bitcoin Cash?

Bitcoin Cash is a new cryptocurrency denoted, as of now, as BCH.

A group of influential miners, developers, investors, and users who are against the agreed consensus (aka BIP-91 or SegWit2x) have decided to fork the original Bitcoin blockchain and create a new version called “Bitcoin Cash”.

The official Bitcoin Cash’s website defines itself as:

Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.

The official date and time for the fork is:

Fork Date: 2017-08-01  12:20 p.m. UTC

For your information, it will be a miner activated hard fork (aka MAHF) that will happen without the agreement of a majority of miners or hash power.

Benefits & Features of Bitcoin Cash

Bitcoin Cash will be a fork of the original Bitcoin blockchain with some changes and additional features here and there.

Mind you, these changes might look small and insignificant, but in reality, these small things have been the reason for a massive debate on Bitcoin scaling for many years.

1. New Name – With a new name to Bitcoin’s offspring, i.e. Bitcoin Cash, it seems to appeal to a stratum of users who believe that Bitcoin should be a cash-like thing that’s easy to exchange with minimal or no fees. Suffixing ‘Cash’ to Bitcoin encourages this usage.

2. Block Size Limit Increase – A certain group of users, miners, and developers have always advocated for a bigger block size in BTC. Now with Bitcoin Cash, they will start off with an immediate increase of the block size limit to 8MB.

3. Replay and Wipeout Protection – If and when BCH splits, they have a well thought out replay and wipeout protection plan for both chains. With this, everyone involved will have minimum disruptions and both the chains can peacefully coexistence from there.

4. New Transaction Type – As part of the replay protection technology, Bitcoin Cash has introduced a new transaction type with additional benefits such as input value signing for improved hardware wallet security, and elimination of the quadratic hashing problem. (Source-https://www.bitcoincash.org/)

Websites from where you can buy Bitcoin Cash:

BTC vs. BCH – Differences That You Should Know

BTC vs BCH - Bitcoin vs Bitcoin Cash

The crypto-sphere is heating up and simultaneously becoming more confusing as it evolves.

I am sad to see how the viruses of confusion and myth are purposely injected into the ecosystem and how the whole system is manipulated as well as hijacked on a regular basis.

Specifically, I am talking about the recent insane price spike of Bitcoin Cash and the doomed price fall of Bitcoin in just a matter of hours.

Some of you who are old players of the crypto-sphere must have benefitted from this sudden rise and fall, but I think it’s not good for newcomers, and it’s not healthy for Bitcoin in the long term.

That’s why in this write-up I wish to convey some of my thoughts on how Bitcoin Cash is not Bitcoin. And I also want to clarify why the newcomers should not fall prey to the Bitcoin Cash PR campaign.

For the latecomers, I want to first explain what Bitcoin Cash is and show you some facts. Then, I’ll explain Bitcoin and leave it to you to decide for yourself.

Some of the benefits & features of Bitcoin Cash…

This on-chain increase in the ability of Bitcoin Cash provides several benefits to its users against ‘Bitcoin’, but these benefits come at a huge price that its users have to pay. (I will explain this ‘huge price’ further in the article.)

Bitcoin-Cash-Features

Some more benefits…

  • On-chain scalability
  • New transaction signatures
  • Emergency Difficulty Adjustment (EDA)
  • Decentralized development

Price One Needs To Pay To Enjoy BCH Benefits

Ignoring the fact that many of you would have made a good amount of money in the recent Bitcoin Cash rally, one needs to pay a huge cost for using Bitcoin Cash.

This cost cannot be measured in dollars, euros, or yens, but instead, it is a cost that you pay by compromising the original dream of Satoshi Nakamoto – to make an uncensorable alternative monetary system which isn’t controlled by an individual or a group of people.

Some of you might say that I am incorrect because Bitcoin Cash’s official site claims that they are carrying forward Satoshi’s Vision by stating:

Some of the developers {of couse the Bitcoin Core Devs} did not understand and agree with the original vision of peer-to-peer electronic cash that Satoshi Nakamoto had created.

And

Bitcoin Cash is the continuation of the Bitcoin project as peer-to-peer digital cash.

https://www.bitcoincash.org/

But actually speaking, they are not even close to Satoshi’s original vision of decentralized and uncensored money.

Bitcoin Cash is extremely censored.

Wait! Some of you might say that I am biased and I am just a Bitcoin fan, but I have facts!

Want To Know The Facts?

1. A decentralized cryptocurrency having a CEO? Really?!?!

Do you really need a CEO for a currency? If you do, then what’s the difference between a business and a crypto?

Check this out – https://www.bitcoincash.org/letter-from-the-ceo.pdf

2. Centralized mining

Bitcoin Cash mining is highly centralized. If you look at the above image, you will certainly be able to put in perspective what I am talking about.

This is the hash power distribution for Bitcoin Cash mining for the last 144 blocks mined.

If we combine the hash power of Antpool, ViaBTC, and BTC.com, which makes more than 50% hash power, this is detrimental for any coin. To make a 51% attack on Bitcoin Cash would be a decision of three mining parties coming together.

The argument is that Bitcoin also had such hashrate distribution in its early days; but don’t forget that Bitcoin was trading in pennies at that time. Anyone attacking BTC at that time had no incentive in doing so because it was almost worthless.

But now that Bitcoin Cash is trading well above $1000, it’s very susceptible to 51% attacks, which is not good. Read more about 51% attacks here.

3. Total full nodes are fewer than Bitcoin

Bitcoin has more than 10,000 active full nodes running, which is one of the most important factors of a truly decentralized currency. This means that anyone attacking Bitcoin would need to have the ability to hijack more than 50% of the 10,000 nodes that are running across the globe.

On the other hand, Bitcoin Cash only has around 1200 nodes as per Coin.Dance’s node summary.

Bitcoin-Cash-Nodes

4. Hard forks without polls

Who does hard forks or upgrades in the currency protocols without polls?

Well, Bitcoin Cash does.

Bitcoin Cash had their hard fork (or protocol upgrade) on 13th November 2017.

The upgrade/fork was done to change the underlying mining algorithm to make it more competitive against Bitcoin and to prevent it from miners’ abuse in the event of reduced or increased difficulty. Read more about the Bitcoin Cash fork here.

Well, I am not against Bitcoin Cash changing something and trying to be competitive, but they should not try being competitive in this way – by doing things without polling the community.

If something is getting upgraded in the protocol, then it has to happen with proper polling and agreements. But this official write-up shows that they didn’t have any such polls.

Also, this write-up gives a hint that there is actually no need for polling because their community is so small and censored. In reality, there are only three individuals who made the decision. (Their names aren’t there but everyone knows who these three were – Roger Ver, Jihan Wu, and Deadal Nix.)

You can see how easy it is to upgrade Bitcoin Cash. Their community is comprised of 3 people. They are the miners, the developers, and the users. Funny!!

Now Let’s See… Who/What is Bitcoin?

Bitcoin is the DADDY of cryptocurrencies. Some of the facts that make Bitcoin truly decentralized and much better than Bitcoin Cash are:

  • It is truly decentralized with its hash power widely distributed when compared to Bitcoin Cash. See here for the hash power distribution of Bitcoin which makes it quite difficult for a single mining rig to overpower others with a 51% rate.
  • It has (by far) the most number of full nodes in this crypto-sphere which makes it difficult to be attacked by governments or centralized organizations.
  • Bitcoin continues to live on Satoshi’s original code of 1 MB blocks and simultaneously keeps exploring new avenues for off-chain scalability solutions.
  • Bitcoin is not a company, and hence, no CEO or a certain group of people control it.
  • Bitcoin upgrades or forks happen due to pollings and BIP proposals which are transparent for all to see. Track the polls here.
  • Additionally, Bitcoin has no direct ties to Roger Ver or some other human, unlike Bitcoin Cash. Of course, Satoshi Nakamoto was there in the beginning, but he/she did the smart thing by not revealing his/her identity because he/she well understood how important it is for a nationless currency to not to have any strings attached to any single entity.

I know that some of you might be thinking that I am a huge Bitcoin fan and that’s why I am biased towards Bitcoin Cash, but I want you to make one thing clear: I am not really that biased.

I certainly think that Bitcoin Cash has a future, but if it is trying to be ‘Bitcoin’ and continue down this same path that it’s on now, it’s not going to end well.

If you are a Bitcoin Cash fan, then you should try to convince the community that BCH is BCH… it can’t be Bitcoin. And if Bitcoin Cash continues to be an altcoin and not attack Bitcoin, then I don’t think there are any problems.

Even Andreas suggested this to both communities.

On the other hand, I am not naive or ignorant about current challenges that Bitcoin is facing in terms of scalability (despite SegWit implementation).

I am also aware that a huge number of Bitcoin txs are stuck in the mempool.

But let’s remember that it wasn’t always so easy to send emails in the early days of the internet. Similarly, Bitcoin will scale with the much-anticipated Lightning networks or sidechains in the future. And yes, those scaling solutions need to happen soon, otherwise, there will be more drama like this for ages to come.

Also for the newcomers: Stay away from Roger Ver’s owned domain Bitcoin.com that is trying spread this FUD and exclaiming that ‘Bitcoin Cash is Bitcoin‘.

So that’s all from my side in this article.

If you are with me and understand Bitcoin’s true nature, then do retweet/share this write-up with the Bitcoin community, and join hands in finding permanent solutions to Bitcoin’s scalability.

Is Anyone Supporting BCH?

You may think that no one would support this new kid in the crypto market. But that’s not true!

BCH is getting enough support from users, miners, and developers. And in reality, to start with, you only need support from these key players.

Moreover, it wouldn’t be fair to dismiss a currency which has not yet been born and has yet to be traded in the market.

For your information, CoinMarketCap lists the futures options of Bitcoin Cash.

Notable Supporters (Exchanges, Mining Pools, and Wallets)

  1. Bitmain – This is the Chinese miner manufacturing company which owns AntPool, the world’s largest mining pool with 23% hash power. They have also announced that they will be supporting BCH mining.
  2. Bitcoin.com (Roger Ver’s Pool) – They operate a small mining pool and have announced that they are open to supporting Bitcoin Cash in the case the user demand surges.

Together, these four pools in total make 30% of the entire hash power, which is not small. So far, there is no official confirmation that they will be giving all of their hash power to BCH mining. But if that happens, BCH is here to stay.

 

What does it mean for Bitcoin (BTC) holders?

As the official website of Bitcoin Cash states:

All current Bitcoin holders will automatically own Bitcoin Cash. The existing ledger at the time of the split is preserved, thus users retain any balances they had before the split.

So it means that if you hold Bitcoins, after the split/fork, you will have both BTC and BCH balances; in other words, your coin holdings will double.

Wowowow… double!!

You may think this is a good thing as your value will also double.

Note: Doubling of coins does not mean doubling of value. The value of both BTC and BCH will be determined after the split based on demand/supply in the market and on user sentiments.

What can happen and what do you need to do?

You do not need to do much, but you need to be updated and agile about all of this. If you want access to your BCH coins, you will require your private keys.

And here’s the important part: Both of your coins (BTC and BCH) will have the same private keys.

Moreover, due to this fork/split, another problem called Replay Attacks can happen.

Though, in their FAQ section, Bitcoin Cash says that they have replay protection in place, but we are not sure how effective it is as it is still not been tested in live.

How is transaction replay being handled between the new and the old blockchain?

Bitcoin Cash transactions use a new flag SIGHASH_FORKID, which is non standard to the legacy blockchain. This prevents Bitcoin Cash transactions from being replayed on the Bitcoin blockchain and vice versa.

So to avoid replay attacks and access your BCH coins, we suggest you take care of the following things:

  1. Avoid transactions for some days till the dust settles to avoid replay attacks.
  2. Keep your Bitcoin private keys with you, not in a third party exchange like Coinbase.
  3. Use hardware wallets like Ledger Nano and Trezor if you can, to access your Bitcoin Cash ( aka BCH coins). Both wallet providers have said that they would support BCH in case there is user demand. Read Ledger Nano S guide and BCH guide here.
  4. If you don’t have a hardware wallet, use software wallets like Jaxx or Exodus to control your private keys.
  5. You can also use a paper wallet or brain wallet.
  6. If you hold your keys in a paper wallet or software wallet, wait for instructions from them on how to access your BCH coins.

Order Ledger Nano S | Order Trezor from the official site

Future of Bitcoin Cash

Predicting or commenting on the future of Bitcoin Cash is impossible.

The only certain future prediction as of now is that if you owned any Bitcoin before the fork on 2017-08-01  12:20 p.m. UTC, then you will surely have the same amount of BTC and BCH after the fork.

For more details on how you will be able to access BCH, keep an eye on our blog.

Note: This last part of the article is for advanced users who are aware of Bitcoin’s fork-ology terms. For non-technical users, I will be explaining terms such as Segwit2x, UASF, UAHF, etc. in another article. For now, I have shared with you actionable things to avoid any loss in case a fork happens. So if you wish, you may skip this part.

Continuing forward …..on how we reached here!

Some of you who are aware of some dynamics of the BTC fork might be thinking why I am talking about this fork now. Well, we heard a few days back the news that BTC isn’t splitting due to BIP 91 or SegWit2x or BIP 141 or whatever.

Well, that was true, and it is still sort of true. But, there was another proposal on how to scale Bitcoin called BIP 148 (aka UASF) which intended to activate SegWit on August 1, 2017, without seeking the majority of miners by updating their full node software.

In response, Bitmain (and others) came up with a contingency plan to save some miners and users who otherwise would have gotten wiped out in case BIP 148 was activated. They called this plan a UAHF (user-activated hard fork). That means they will be supporting and implementing BCH.

But, as BIP 91 (the first part of SegWit2x) is already locked in and on the path of activation, it means that there would be no need for Bitman’s contingency plan because BIP 148 won’t be activated now. On the other hand, BIP 148’s original aim is already being achieved by the activation of BIP 91 (or BIP 141 or SegWit2x), so there is no point, it seems, in activating it.

However, now it appears that this plan will still be carried out on August 1, 2017, because this group is fundamentally against the idea of SegWit (or SegWit2x) and sees a block size increase as the only option.

The only ray of hope to stop this fork seems to be that Bitcoin core developers, miners, users, etc. who voted in favor of BIP 91 need to suddenly agree on August 1 to reject SegWit and accept the increase of block size to 8 MB. And believe me, this is very unlikely.

August 1st will be a historic day in the lifetime of Bitcoin and its users. If people find BCH more profitable and appealing, it could take off, or if it turns out to not offer anything useful to the world, it could just die an unnamed death.

But no one knows…

So until that time, stay tuned at CoinSutra to keep with the Bitcoin revolution!

For further reading:

16 thoughts on “What is Bitcoin Cash (BCH) – Everything You Need To Know”

  1. i m still new to dis field so what is the difference between bcc nd bch i google bcc came up as bitcoin cash nd here in ur article bch also as bitcoin cash i m so confused

    1. Hey Ahmed,
      Thanks for asking this.

      Yes, it true that when your google BCC you will get Bitcoin Cash in the results.

      Actually, the confusion happened because there is no formal structure or process to name cryptocurrencies yet. And when Bitcoin Cash hard fork was announced they named it in haste as BCC. But as of till that BCC is nomenclature is already being used by BitConnet cryptocurrency (aka BCC).

      Hence now the Bitcoin Cash community has agreed to name itself as BCH=Bcash=Bitcoin Cash in short. So for the sake of your question, BCC and BCH are one and the same.

      Please note that we and many others are now referring to Bitcoin Cash as “BCH” due to “BCC” having already been claimed by another currency

      1. so bcc nd bch r the same but actually i found also bcc refering to bitconnect which i donu much abt does also using the same algo of btc nd bch?

          1. It is altcoin.

            For now, you just need to know

            BCC=Bitconnect.

            BCH=Bitcoin Cash=BCash

            And yes due to lack of formal naming convention Bitcoin Cash was & is still addressed by name BCC. So no need to get confused with the logo.

    1. Hello Aldo,

      Yes, you can claim your BCH from a paper wallet if you had BTCs that prior to fork.

      You can import your private keys into a Bitcoin Cash wallet here is the list of supporting wallets- Best Bitcoin Cash Wallets.Out of this list, Coinomi & Electron Cash etc wallets allow you to import private keys.

      Do it cautiously:)

  2. I would like to set yo a BitcoinCash node to verify transactions on my computer; however, I’ve not been able to find any software to support mining BitcoinCash. What’s the deal?

    1. Hi Karl

      Where did you look up for your BCC.

      There is a separate explorer for that. If you had BTC before 1st August on your bitaddress paper wallet then look up your address here

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Howdy, Welcome to the popular cryptocurrency blog CoinSutra. Here at CoinSutra, we write about Bitcoin, wallet management, online security, making money from Bitcoin & various aspects of cryptocurrencies. You can read more about CoinSutra on the “About” page.
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