Bitcoin Cash: Everything You Need to Know!
You have probably heard about Bitcoin — but you may not know what it is.
A brief definition:
Bitcoin is a decentralized, peer-to-peer electronic currency that does not require intermediary banking institutions. All transactions are reported on a public ledger called the blockchain. Bitcoin is known by the ticker symbol “BTC.”
Since Bitcoin’s inception in 2009, several other cryptocurrencies have entered the market.
One example is Bitcoin Cash, known by the ticker symbol “BCH.”
You might be wondering:
In this article, we are going to discuss:
- BCH history in relation to BTC
- How to Buy BCH
- Ways to use BCH and available services
- How to determine BCH’s current value
- A BCH/BTC deep dive for enthusiasts
- News sources and additional resources
The History of Bitcoin Cash
The Reasons for Developing Bitcoin Cash
Proponents felt there were a few concerns with Bitcoin:
- Increasing transaction fees (December 2017: an average of $50 in fees per each transaction)
- Increasing amount of time to process transactions
This means that it was becoming harder to make transactions — and use Bitcoin as a form of peer-to-peer electronic cash.
The Bitcoin community decided that some big changes needed to be made.
The Development of Bitcoin Cash
BCH and the Hard Fork:
On August 1, 2017:
What is a hard fork?
The hard fork split the blockchain into two parts:
The Result: Transaction Fees and Times
Depending on the current market rate, transaction fees and times could be decreased when using Bitcoin Cash.
Currently, it takes about 10 minutes for a block to be confirmed on both blockchain networks.
Currently, BCH transaction fees are lower than BTC transaction fees.
Who decided to name the updated blockchain, “Bitcoin Cash?”
The community that supported the initiation of the fork agreed upon naming the cryptocurrency “Bitcoin Cash.”
The name was inspired by Satoshi Nakamoto’s White Paper: A Peer to Peer Electronic Cash System.
Although BCH is still relatively new, companies like Bitpay.com see the market value in Bitcoin Cash because of how easy it is to use in transactions. Today, Bitpay is one of the largest Bitcoin Cash payment processors in the world.
The ability to use Bitcoin or Bitcoin Cash to make purchases opens doors for both merchants and customers into markets that were not available before. For example, a business can accept payments from customers anywhere in the world without the risk of fraud,” said Sean Rolland, Director of Product at BitPay. “ Adding support for Bitcoin Cash payments gives our customers more ways in which they can transact. This is a good thing.” -Bitpay.com
Obtaining Bitcoin Cash
Buying Bitcoin Cash
Step 1: Choose a Wallet that Supports Bitcoin Cash
Since BCH is relatively new, there are currently fewer wallets supporting BCH than BTC.
However, since the new cryptocurrency is growing fast, more and more wallets have been adding support for BCH.
Here is a list of 21 compatible wallets that we found. Choose and download one of these wallets:
- Electron Cash
Step 2: Find a Cryptocurrency Exchange
The following cryptocurrency exchanges have integrated Bitcoin Cash transactions:
Step 3: Move the BCH to your BCH-compatible wallet
Don’t just leave your Bitcoin Cash on your exchange account. Move it to the secure wallet that you downloaded.
It’s not a good idea to keep digital currency sitting idly in an exchange account. The reason being that, exchanges and borrowers have the potential to be hacked when left unattended. The best solution to security breaches is to keep your currency in a certified Bitcoin/Bitcoin Cash wallet.
Downloading a compatible wallet and purchasing from an exchange is the easiest way to currently buy BCH.
NOTE: Do not send/receive Bitcoin Cash to a Bitcoin address or vice versa. Always make sure when you send Bitcoin Cash, that you are sending to a Bitcoin Cash address. The same goes for Bitcoin. Otherwise, your money could be lost.
Using Bitcoin Cash and the Available Services
Ways to use Bitcoin Cash
Now that you have your BTC or BCH in your wallet, it’s time to make your crypto useful. There are so many different ways to spend your coins: ranging from ordering takeout to purchasing flights.
- Purse.io — Purse.io allows shoppers to exchange their BTC or BCH for any Amazon product. Shoppers can expect to get up to 20% in exclusive discount savings.
- eGifter — eGifter allows buyers to purchase premium branded gift cards however they’d like: in bulk, shipped and delivered to their doorstep, or bought with Bitcoin.
- Ghostbed — Ghostbed uses quality materials to create soft, yet durable mattresses. Recently, they opened up buying opportunities using Bitpay.
- Lanieri — Lanieri says that “Italians Do Fit Better,” and they could be right, especially since they are offering their fashionable menswear options in exchange for Bitcoin.
- Schmidt’s Naturals are plant-derived deodorants and soaps free from added chemicals such as aluminum and SLS. In late May 2018, Schmidt’s Naturals opened up their payment options to cryptocurrency: “Whether it be a scent or a payment method, we are very highly engaged with our consumer.”- Schmidt’s Naturals
- Takeaway — Takeaway has been accepting bitcoins as payment since 2013. Takeaway is a Dutch company specializing in online food ordering and delivery. Over the years they have expanded to countries such as Italy and Portugal. Today, hundreds of thousands of businesses have the option to be paid in Bitcoin through their service.
- Newegg — Newegg is an online computer and electronics shop devoted to providing Bitcoin as a payment option.
- Microsoft Store — Since January 2018, Microsoft welcomed Bitcoin back to its Windows and Xbox online stores. In order to utilize their currency, customers simply select the “Redeem bitcoin” function which transports the user to their digital wallet to complete the transaction.
- Namecheap — Namecheap is a leading domain registrar that “registers or transfers your domain name in a snap.” Namecheap offers payment options in Bitcoin and Bitcoin Cash.
- NETELLER — Neteller is an e-wallet that allows the ability to transfer money to and from merchants and withraw funds easily between accounts. You can exchange Bitcoin and Bitcoin Cash.
… And everything else you can think of!:
- Destinia — Destinia offers great deals on hotels, flights, and apartments. Now, travelers can purchase their flights with Bitcoin, opening up a world of opportunities for digital currency holders.
- Magnum Realty — The way real estate conducts business is changing! Magnum Realty is a New York-based real estate service that speacializes in rentals and condo sales in the Manhattan area. Magnum Realty accepts Bitcoin as a viable way to purchase properties.
- APMEX — Apmex is a precious metals dealer in the U.S. that accepts purchases in Bitcoin as long as they are under $250,000.
- American Red Cross — The American Red Cross offers shelter, food, and resources to communities experiencing disaster. Traditionally donors support the relief services by donating money in cash. Now, even those who invest in cryptocurrency are able to use their coins to help out.
- Electronic Frontier Foundation — San Francisco’s Electronic Fronteir Foundation is a leading nonprofit defending digital privacy, free speech, and innovation. If interested in donating in Bitcoin or Bitcoin Cash, there is an option to do so at the bottom of their donation page.
Payment Service Providers
If you are a business owner, you can start accepting BCH as a form of payment!
Payment servicers can help facilitate BCH payments by depositing dollars into your bank account when customers pay you in BCH.
A business owner can use the following payment servicers to accept BCH payments:
Blockchain explorers are internet browsers that help blockchain users track their transactions
Until your transaction goes through, you can use a Blockchain Explorer to check its status. So, don’t worry if you send or receive money and it’s not instantly there.
Just use the address, transaction, or block hash to receive confirmations for your transaction.
BCH-compatible blockchain explorers include:
- AlfaTop: Enter a friend’s phone number to instantly send them BCH.
- Bitcoin Rewards: Shop from various retailers through Bitcoin Rewards to earn a cashback on purchases made with BCH.
- Coin Text: Coin Text allows you to obtain and transfer BCH through SMS messaging (no internet or applications required!).
- Tippr: Tippr (by Rocketr) is a Tipbot that can be used on Reddit and Twitter to tip/send other users with BCH.
- Chain Tip: Also allows users on Reddit and GitHub to tip each other with BCH.
- PiixPay: Pay your bills, or pay your friends/family, with Piixpay.
Bitcoin Cash Market Value
You can use this Bitcoin Cash Converter on Bitcoin.com to look at the current value of your BCH.
This will indicate the current value of BCH in USD, EUR, GBP, etc.
The Relationship Between Coinbase & Bitcoin Cash
Here is some additional information about the Bitcoin Cash market — and why its price might change.
We decided to give an example of a particular event that caused the price of Bitcoin Cash to change drastically.
In December 2017, Coinbase integrated support for Bitcoin Cash.
Immediately following Coinbase’s integration, the price of Bitcoin Cash spiked dramatically.
Here is a chart showing the price of Bitcoin Cash from its launch on August 1, 2017 to December 31, 2017:
On December 20th, the price of BCH soared from about $2,000 to almost $10,000 on the Coinbase’s exchange, GDAX. Now called Coinbase Pro.
On other exchanges, the price went up to almost $4,000.
Coinbase had only opened BCH trading for less than 3 minutes before closing it because the requests exceeded their supply.
Most of the requests for BCH were denied because Coinbase did not have enough supply.
You are probably wondering:
How did this happen?
Coinbase claims that the dramatic increase in price was due to the fact that the excessive demand for BCH exceeded the exchange’s supply.
However, many users believe that there could have been insider trading on Coinbase before its official integration — which depleted the exchange’s supply.
Some think this could have occurred because the price of BCH began to rise on the exchange before trading officially opened to the public.
But Coinbase has denied that insider-trading occurred on the exchange.
August 2017 upgrade:
This upgrade increased the maximum block-size from 1 MB (of data) per block to 8 MB per block on the blockchain.
May 15th 2018 (the most recent software update):
The block-size for Bitcoin Cash increased from 8 MB to 32 MB.
Why does block-size matter?
A larger block-size means that more transactions can be processed (per second) because each block holds more data. On average, blocks come on every 10 minutes. Here’s more about block-size and transactions per second.
Bitcoin Cash can process 61 transactions per second and Bitcoin can process 3–7 transactions per second (alternative link). The Terab Project is working to allow Bitcoin Cash to process up to 7 million transactions per second.
For comparison, the Visa network (founded in 1958) can process up to 24,000 transactions per second.
There’s a long way to match Visa’s current capabilities, but you can see how the cryptocurrency industry is innovating fast.
Ticker Symbol: BCH
Market Cap of BCH: $21.0B
Current Price: Check out this live price chart!
In comparison to Bitcoin…
Ticker Symbol: BTC
Market Cap of BTC: $21.0B
Current Price: Check out this live price chart!
Here is a chart showing the price of Bitcoin Cash since its inception (August 1, 2017 — May 24, 2018):
The price of Bitcoin for the same time period (August 1, 2017 — May 24, 2018)
A Closer Look: The price of Bitcoin Cash over the last 3 months: March 2018-May 2018
The price of Bitcoin over the last 3 months: March 2018 — May 2018
There are times where BTC and BCH follow similar price trends.
Over May 4–5, 2018, both BTC and BCH jumped in price. Then, both cryptocurrencies began slowly declining in price over the following weeks.
Their prices can be affected by very different events.
At the beginning of Bitcoin Cash’s inception, on August 1, 2017, its price was $552.
Then, its price declined by more than 50% over the next few days. BCH hit its record-low price on August 4, 2017 — $240. BCH struggled to gain value in its first week on the marketplace.
Meanwhile, BTC was steadily increasing in price during August 2017.
In December 2017, both BTC and BCH increased in price dramatically.
However, these price increases were for different reasons.
Bitcoin hit its record high of $19,783 on Sunday, December 17, 2017. Then, it fell by approximately 30% — to $13,857 on Friday, December 22, 2017.
In December, the prices of BTC and BCH increased on separate days for different reasons.
Meanwhile, members of the Bitcoin Cash community feel positive about the future of the new currency for many reasons.
According to Ryan X. Charles, the CEO of yours.org:
News Sources and Additional Resources:
Now that you’re more familiar with Bitcoin Cash, You may be wondering:
What are the the best resources to stay updated?
These are Reddit’s three most popular BCH subreddits:
1. /r/Bitcoincash/ — about 34,000 members
2. /r/bch/ — 2,042 members
3. /r/btc/ — Mainly a BTC channel, however, this subreddit gets a lot of BCH conversation too.
Here’s a helpful tweet…
Memo.cash is a decentralized social network that is supported by the Bitcoin Cash blockchain.
The Transaction Highway was created to show the differences in transactions between the two cryptocurrency networks.
That’s All, Folks!
After reading this article, you should know:
- Why BCH was created
- How to buy and use BCH
- High-level BCH/BTC analysis
- How to determine BCH’s value
- Where to get your BCH news
Check out the original article here.
Author: Bethany Carter