Introduction
Bitcoin Cash (BCH) emerged as a Bitcoin hard fork, championing the vision of Bitcoin as a "peer-to-peer electronic cash system." By prioritizing affordable peer-to-peer transactions, it diverges from Bitcoin's focus on store-of-value optimization. Key innovations include larger block sizes and enhanced on-chain scalability to reduce dependency on off-chain solutions.
Core Features of Bitcoin Cash
Token Utility
- Native Currency: BCH facilitates peer-to-peer payments and value storage.
- Scalability: Designed for high throughput via 32MB block sizes (vs. Bitcoin’s 1MB), enabling more transactions per block.
Network Launch
- Distribution: Created via a Bitcoin hard fork on August 1, 2017 (block 478559).
- Initial Supply: ~16.5M BCH distributed to BTC holders at the time of the fork.
Economic Model
Supply Dynamics
Halvings: Mirroring Bitcoin, BCH undergoes halvings every 210,000 blocks (~4 years).
- Past halvings: November 2012 (50 → 25 BCH), July 2016 (25 → 12.5 BCH).
- Next halving: Originally slated for May 2020 (post-fork).
- Total Cap: Hard-capped at 21 million BCH.
Mining Adjustments
- EDA Mechanism: Emergency Difficulty Adjustment briefly caused faster BCH issuance post-fork (120K extra BCH mined by November 2017).
- Current Algorithm: Adjusted per-block for mining stability.
Technical Infrastructure
Consensus Mechanism
- Nakamoto Consensus: Longest chain with most proof-of-work wins.
- PoW Algorithm: SHA-256, with ASIC-dominated mining pools.
Governance
- Open-Source Development: Led by Bitcoin ABC and 5 other client teams.
- Upgrade Process: Bi-annual protocol upgrades signaled by hash power.
FAQs
Why choose Bitcoin Cash over Bitcoin?
Bitcoin Cash emphasizes low-cost transactions and on-chain scalability, making it ideal for everyday payments.
How does BCH achieve faster transactions?
Larger block sizes (32MB vs. 1MB) allow more transactions per block, reducing fees and delays.
Is Bitcoin Cash decentralized?
Yes, with multiple client implementations and a global miner/node network, though ASICs dominate mining.
Key Takeaways
- Mission: Electronic cash for daily use.
- Advantage: Scalable, low-fee transactions via on-chain solutions.
- Future: Continued emphasis on usability and merchant adoption.
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