BCH (Bitcoin Cash) is a digital currency based on blockchain technology. It is a fork of Bitcoin (BTC) and was born in August 2017. It aims to improve the scalability of the blockchain by increasing the block size while reducing transaction fees, thereby improving the efficiency and user experience of Bitcoin in practical applications.
The total amount of BCH is 21 million. This total amount is the same as the total amount of Bitcoin (BTC), which was allocated from Bitcoin at a 1:1 ratio through a hard fork when Bitcoin Cash was born. This total limit ensures the scarcity of BCH, and similar to Bitcoin, it is designed to resist inflation through a fixed supply.
Technical Features
Block size: BCH’s block size increased from Bitcoin’s 1MB to initially 8MB and then further to 32MB. This change significantly increases the number of transactions that can be processed per block, thereby reducing transaction confirmation times and fees.
Transaction signature: BCH uses a new transaction signature method called the "SigHash" type, which aims to improve transaction security and prevent replay attacks.
Proof of Work (PoW) consensus mechanism: Like Bitcoin, BCH also uses the PoW consensus mechanism to ensure the security of transactions and the decentralization of the network.
Halving mechanism: BCH's block reward will be halved regularly, similar to Bitcoin. Currently, BCH's block reward is 6.25 BCH per block, and the second halving is expected in the first half of 2024.
use
Purchasing goods and services: BCH, as a digital currency, can be used to purchase goods and services both online and offline.
Cross-border payments: Due to BCH’s decentralized nature and low transaction fees, it has become a convenient way to make cross-border payments.
Donations: Various donation organizations around the world accept Bitcoin Cash, and transactions can be performed at high speeds, making donations efficient.
Investment: Investors can view BCH as an investment tool to obtain potential capital appreciation by purchasing and holding BCH.
advantage
High scalability:
Large block capacity: BCH significantly improves the scalability of the blockchain by increasing the block size (from Bitcoin's 1MB to 8MB or higher). This enables BCH to process more transactions, reduces transaction congestion, and shortens transaction confirmation time.
Fast transaction speed: Due to the increase in block capacity, BCH's transaction speed is relatively fast and can be confirmed more quickly, which is very beneficial for daily shopping and instant transactions.
Low transaction fees:
Lower transaction fees are another significant advantage of BCH. Due to its ability to handle more transactions, BCH’s transaction fees are much lower than those of Bitcoin and many other mainstream cryptocurrencies, which is particularly attractive to users who frequently make small transactions.
Decentralization:
Like Bitcoin, BCH is a decentralized digital currency that does not rely on any central authority for control. This provides users with more financial freedom and reduces the risk of government intervention.
Active community:
BCH has a passionate and decentralized community. Despite differences with the Bitcoin community, the BCH community has always adhered to its own development path, continuously promoted technological innovation and ecological construction, and demonstrated strong vitality and innovative spirit.
safety:
Based on blockchain technology, the security of BCH is effectively guaranteed. Its decentralized and distributed ledger characteristics make it difficult for attackers to tamper with transaction records or steal user funds.
shortcoming
Market acceptance needs to be improved:
Although BCH has many advantages in terms of technology, in actual applications, its market acceptance is still not as good as mainstream cryptocurrencies such as Bitcoin. Some merchants and trading platforms have not yet fully supported BCH payments, and the user base is relatively small, resulting in relatively weak liquidity and price stability.
Hard Fork Risks:
BCH has experienced multiple hard forks since its inception, and disagreements within the community over the technical roadmap have occurred from time to time. Such divisions may not only lead to user asset losses, but may also cause market panic and affect investor confidence.
Technical Challenges:
Although BCH offers a larger block capacity, this may also bring technical challenges. For example, larger blocks may require higher computing power and network bandwidth, which may be restrictive for some users.
Market instability:
Due to BCH's competitive position in the market, its price is relatively more unstable. This makes investors holding BCH face greater risks and may cause its value in the market to fluctuate greatly.
Lack of independent blockchain history:
As a forked currency of Bitcoin, BCH does not have its own independent blockchain history. This means that BCH's existence in the market mainly depends on Bitcoin's history and user base, which may limit its performance in the market in some cases.
Follow-up suggestions
Diversify your portfolio: It is recommended that players do not invest all their funds in BCH, but should keep their portfolio diversified to reduce risk.
Pay attention to market dynamics: The cryptocurrency market is highly volatile, and players should pay close attention to market dynamics, including policy changes, technological progress, market sentiment and other factors, so as to adjust investment strategies in a timely manner.
Understand the project background and technical characteristics: Before investing in BCH, players should fully understand its project background, technical characteristics and future development potential in order to make wise decisions.
Long-term investment: Although the price of BCH may be affected by short-term market fluctuations, in the long run, its technological innovation and market demand may drive its price up. Therefore, players can consider buying on dips and adopting long-term investment strategies.
