Bitcoin Cash is a cryptocurrency that was developed to be an operational upgrade to the original and conventional Bitcoin. Its essence is to make more transactions available per block, and the hope is that the volume of transactions being carried out on Bitcoin Cash will be enough to one day rival those of industry heavyweights like Visa, Payoneer, and PayPal.
Bitcoin Cash was officially launched in August 2017, and it has gone on to become the biggest and most valuable offshoot of the Bitcoin platform by a large margin. It is currently the 4th most valuable cryptocurrency in the world (behind Bitcoin, Ethereum, and Ripple, in that order) with a market capitalization value of $21.7 billion- about 4.7% of the total cryptocurrency market capitalization (as of this publication).
Why was Bitcoin Cash Created?
Bitcoin Cash was developed as a means of bringing back the inherent characteristics of money and incorporating them seamlessly into the Bitcoin operational mechanism. These characteristics have been filtered from the Bitcoin Core over the years, and this meant that progress in the Bitcoin protocol was impeded by various individuals, corporate bodies, and organizations that were involved in it. The result was that the Bitcoin Core became unstable (and as such, virtually undesirable for use) as a form of money because fees for processing transactions were incredibly high. The transfer of currency on the platform was taking too long (transactions were taking various durations, ranging from hours to days). All of these were the issues that were created by the congestion of the Bitcoin Core’s blocks.
Essentially, “blocks” are groups of new transactions. Each block is added to the blockchain (essentially, a block of blocks), and is queued up to be completed. In Bitcoin parlance, transactions are processed on a block by block basis, and Bitcoin- in itself- was designed to operate six blocks per hour (ergo, a single block every ten minutes). A few years back, there was an artificial limit that was imposed on the size of blocks. This limit was added to the Bitcoin Core code so as to stop an attack vector (a phenomenon where a large number of transactions end up weakening the network). At that time it was free to make a transaction, and that meant that an attacker was also free to send a large number of transactions in between his (or her) many wallets thereby forcing every other person on the network to download and store a large amount of data. The limit of blocks sizes was set at 1MB (essentially, this was the size of the storage space that was provided by floppy disks in the mid-80s) and at that time. This number was still substantially (at least, a few thousand times) higher than it was needed for a person to make use of the network. This showed that the limit imposed on lock size was not meant to impede growth on the network, but to merely act as a defense mechanism against any potential attack vector.
The use and adoption of the Bitcoin platform began to gain noticeable rise in 2012, and this was when the blockchain began processing about 250 transactions in a single block (by the previous calculations, this means about 1500 transactions per hour). The number eventually doubled after two years, and by 2014, 500 transactions were being processed on a single lock on the Bitcoin platform.
Today though, the Bitcoin Core network has reached its maximum capacity, and approximately 2,500 transactions are being processed per block.
As expected, there was a lot of network congestion that resulted from the artificially small block size and the fact that the demand for Bitcoin as a means of processing transactions was not showing any signs of slowing down. Recall that to be verified and processed, it is essential for a Bitcoin-based transaction to be part of a block. If a block is full, then a transaction will have to wait to be included in the next block. However, it is also possible for the next block to already be full because it contains transactions that are of higher value.
This whole congestion has led to the development of an ever-increasing “fee market” where users have no choice but to pay more to “cut the queue” and get their transactions to the apex of the list of transactions that are pending approval and processing. As at present, there are well over hundreds of thousands of transactions on the Bitcoin Core that is unconfirmed and as such, are left hanging.
To make the whole case much worse, it was apparent that the developers of the Bitcoin Core were either unable or unwilling to increase the size of blocks to achieve parity with the demand for Bitcoin (which, by the way, was still increasing in leaps and bounds). The Bitcoin Core developers saw the fee market as well as the backlog of transactions as a positive characteristic of the Bitcoin Core network.
This is what has spurred many people to begin with the development of various alternative cryptocurrencies to Bitcoin (usually referred to as “altcoins”). Because many people get frustrated with the Bitcoin Core (as fees were increasing sporadically and transactions were taking even longer to get completed), many altcoins have been developed and are now doing well on the cryptocurrency market cap. As a result, Bitcoin went from owning almost 100% market share in the cryptocurrency landscape to having below 50%.
This is where Bitcoin Cash came in. Bitcoin Cash was seen as a community-activated upgrade of Bitcoin, especially because it increased the block size to 8MB, thereby being able to overcome the scaling and measurement issues that Bitcoin Core is dealing with today.
So how can you buy Bitcoin Cash?
Bitcoin Cash can be bought in the same manner as other cryptocurrencies. However, you should also know that it is not as established as other cryptocurrencies and this means that your options are more or less limited.
Bitcoin Cash (also known as BCH or BCC) reached an all-time high in December 2017, when it recorded value of about $3,000. As at now, its value hovers around the $1,200 mark, although there are promising signs of an increase.
If you are looking to purchase Bitcoin Cash, you’ll need:-
– A cryptocurrency wallet that has support for the Bitcoin Cash platform.
– To choose between whether to purchase BCH from a broker or an open exchange
– To ensure that you follow the sign-up and verification processes of your preferred site to be eligible to purchase the cryptocurrency.
How you can buy Bitcoin Cash on an exchange or from a broker
Although the procedures might vary from service to service, the truth is that in principle, it is as simple as:
– Creating an account by signing up with your phone number, email address and other relevant information that might be required.
– Verifying your account and providing substantial proof of your identification
– Depositing some funds into your account, and using those funds to buy a specific aunt of BCH at a certain rate
Remember that regardless of whether you’re buying from a broker or an open exchange, the procedures ware usually similar.
What you should look for in an exchange
If you’re choosing the open exchange option, here are a few things that you might want to be on the lookout for:
– Methods of payment available: Most times, it is possible for you to make your payments through a credit card PayPal Payoneer, or cash
– Transaction times: It is possible for a high volume of orders to affect your transaction times. This means that if you’re looking to complete your transaction quickly, you might want to look for a service that is less popular (or at the very least, one that offers transactions at a much faster rate)
– The service’s reputation: It is recommended that you perform your purchase on a service that is well established and which has a strong and viable reputation.
How you can choose a Bitcoin Cash wallet
The price of Bitcoin Cash experienced a major surge in November 2017 (when its value rose to about $2,000 for the first time). This was before there were even too many wallets that supported the platform. To make a quick purchase and earn some money quickly, a lot of users got them elves scammed by fake Bitcoin Cash wallets that were created to specifically take advantage of their desperation and need for speed.
To wit, if you don’t know how you can find an original and reliable wallet, then it might be better for you avoid any wallet that looks as if it has been created recently and it is to be used specifically for making BCH-based purchases.
This means that you’ll be better served by multi-currency wallets that provide support for BCH, and which have reliable security.