Bitcoin Cash

Bitcoin cash (BCH) is a cryptocurrency that started 1 August 2017.

As the name suggests, it’s related to the original cryptocurrency, bitcoin (BTC).

In fact BCH is what is known as a ‘fork’ of BTC. A fork is when a cryptocurrency shares a history with another cryptocurrency up to a point, before going off in a different direction.

Think of it like a fork in the road.

This is due to technical changes in the way the new cryptocurrency works.

Why did they fork?

Throughout 2017 there has been a lot of controversy in the bitcoin community on how to scale bitcoin.

To ‘scale’, in this case, means to make it faster, allowing it to process more transactions than it can today.

Well, there was a general disagreement on the best way to do this. In the end, a minority group in the bitcoin community decided to ‘fork’ bitcoin and start a new blockchain — bitcoin cash.

What’s different about bitcoin cash?

The main difference is the number of transactions that can be processed per block.

BCH allows 8MB of data per block. Compared to just 1MB with bitcoin. However, bitcoin is dealing with this issue in a different way.

What happens next?

BTC and BCH are now two separate cryptocurrencies. Each has their own valuation, their own rules, and their own developers and supporters.

BTC remains the more dominant chain and is still more highly valued than BCH. But the cryptocurrency world is very volatile, and can change fast.

So, BCH is worth keeping an eye on.

There are now more than 900 cryptocurrencies. A lot of these might fail.

In the end, the ones that survive will be the ones that offer value to users. And the ones that survive could potentially be worth many multiples of today’s value.

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Money Morning Australia