What is Bitcoin Cash (BCH)?
Bitcoin Cash (BCH) is a peer-to-peer electronic cash system that forked from Bitcoin on August 1, 2017. Created to fulfill Bitcoin's original vision as everyday digital cash, BCH increased the block size limit to allow more transactions per block, resulting in faster confirmations and lower fees compared to the original blockchain.
Key Facts
What is Bitcoin Cash?
Bitcoin Cash is a decentralized cryptocurrency that emerged from the Bitcoin block size debate. When the Bitcoin community could not agree on how to scale the network, a group of developers, miners, and businesses forked the Bitcoin blockchain on August 1, 2017, creating Bitcoin Cash with an increased block size limit of 8MB (later raised to 32MB).
The core philosophy behind Bitcoin Cash is that Bitcoin was originally designed to be "peer-to-peer electronic cash" as described in Satoshi Nakamoto's whitepaper. BCH proponents argue that larger blocks allow more transactions to fit in each block, keeping fees low and enabling everyday payments — the original promise of Bitcoin.
BCH uses the same SHA-256 Proof-of-Work consensus mechanism as Bitcoin and shares Bitcoin's 21 million coin supply cap and halving schedule. The key difference is the approach to scaling: Bitcoin relies on off-chain solutions like the Lightning Network, while Bitcoin Cash scales on-chain through bigger blocks.
Who Created Bitcoin Cash? A Brief History
The Block Size Debate
By 2015-2016, Bitcoin's 1MB block size limit was causing congestion. Transactions were slow and fees were rising. The community split into two camps: "small blockers" who wanted to keep blocks small and scale through off-chain solutions like SegWit and the Lightning Network, and "big blockers" who argued that simply increasing the block size was the simplest, most effective solution.
This debate became known as the "Bitcoin Scaling War."
The Fork: August 1, 2017
When the SegWit2x compromise failed, big block supporters led by Roger Ver (Bitcoin.com), Jihan Wu (Bitmain), and developers like Amaury Sechet executed a hard fork. Everyone who held Bitcoin at the time of the fork received an equal amount of Bitcoin Cash. The new chain launched with an 8MB block size limit, immediately relieving the transaction congestion that had plagued Bitcoin.
Key Milestones
- • August 2017: Bitcoin Cash forks from Bitcoin at block 478,558 with 8MB blocks.
- • November 2017: BCH price briefly reaches over $3,500 amid the crypto bull market.
- • May 2018: Block size increased to 32MB via hard fork upgrade.
- • November 2018: The "Hash War" — BCH splits into Bitcoin Cash (BCH) and Bitcoin SV (BSV) over disagreements on protocol direction.
- • April 2020: First BCH halving reduces block reward from 12.5 to 6.25 BCH.
- • May 2023: CashTokens upgrade adds native token and NFT support to BCH.
- • April 2024: Second BCH halving reduces block reward to 3.125 BCH.
The BCH/BSV Split (2018)
In November 2018, Bitcoin Cash itself experienced a contentious hard fork. Craig Wright and Calvin Ayre pushed for even larger blocks (128MB) and wanted to lock in a "Satoshi Vision" version of the protocol. Roger Ver and most of the BCH development community opposed these changes. The result was a split into BCH (retaining the Bitcoin Cash name) and BSV (Bitcoin SV).
The "Hash War" that ensued saw both sides dedicating massive mining power to secure their respective chains.
How Bitcoin Cash Works
Bitcoin Cash shares most of its technical foundation with Bitcoin. Both use SHA-256 mining, UTXO-based transactions, and have identical supply schedules. The key differences lie in block size, transaction throughput, and protocol philosophy.
Bigger Blocks, More Transactions
Bitcoin Cash supports blocks up to 32MB, compared to Bitcoin's effective ~4MB (with SegWit). This means BCH can process significantly more transactions per block — theoretically over 100 transactions per second compared to Bitcoin's ~7. Larger blocks keep fees low because there is ample space for transactions, eliminating the "fee market" competition seen on Bitcoin during periods of high demand.
Mining and Difficulty Adjustment
BCH uses the same SHA-256 Proof-of-Work algorithm as Bitcoin, meaning miners can switch between the two chains. Bitcoin Cash implemented an Emergency Difficulty Adjustment (EDA) algorithm, later replaced by a more sophisticated ASERT (aserti3-2d) difficulty adjustment that recalculates difficulty after every block, ensuring stable block times even when hashrate fluctuates significantly.
CashTokens
In May 2023, Bitcoin Cash activated the CashTokens upgrade, enabling native fungible and non-fungible tokens directly on the BCH blockchain. This allows developers to create tokens and NFTs without layer-2 solutions, expanding BCH's utility beyond simple payments into areas like DeFi, tokenized assets, and decentralized applications.
Supply and Tokenomics
Bitcoin Cash mirrors Bitcoin's monetary policy exactly: a maximum supply of 21 million BCH with halving events approximately every four years (every 210,000 blocks). New coins are created through mining rewards, which decrease over time.
| Halving Event | Approximate Date | Block Reward |
|---|---|---|
| Genesis (inherited from BTC) | August 2017 | 12.5 BCH |
| 1st Halving | April 2020 | 6.25 BCH |
| 2nd Halving | April 2024 | 3.125 BCH |
| 3rd Halving | ~2028 | 1.5625 BCH |
Bitcoin vs Bitcoin Cash
Despite sharing the same origin and much of the same code, Bitcoin (BTC) and Bitcoin Cash (BCH) have diverged significantly in philosophy and approach.
| Feature | Bitcoin (BTC) | Bitcoin Cash (BCH) |
|---|---|---|
| Block Size | ~4MB (with SegWit) | 32MB |
| Avg. Transaction Fee | $1 - $30+ (varies) | Less than $0.01 |
| Scaling Approach | Off-chain (Lightning Network) | On-chain (bigger blocks) |
| SegWit | Yes | No (removed) |
| Primary Use Case | Store of value / "digital gold" | Everyday payments / "digital cash" |
| Difficulty Adjustment | Every 2,016 blocks (~2 weeks) | Every block (ASERT algorithm) |
Both approaches have trade-offs. Bitcoin's smaller blocks and off-chain scaling preserve decentralization by keeping node requirements low, while Bitcoin Cash's larger blocks prioritize transaction throughput and low fees at the potential cost of higher node resource requirements.
Why Bitcoin Cash Has Value
Bitcoin Cash derives value from its utility as a fast, low-cost payment system. With transaction fees consistently below $0.01 and confirmation times that are practical for point-of-sale transactions, BCH is one of the most usable cryptocurrencies for everyday payments.
Like Bitcoin, BCH has a fixed supply of 21 million coins with predictable issuance through halving events, providing scarcity. The SHA-256 Proof-of-Work consensus mechanism secures the network with significant mining power, often shared with Bitcoin's mining infrastructure.
BCH's merchant adoption, particularly in regions where low-fee transactions matter for commerce, contributes to its utility value. The addition of CashTokens has expanded its programmability, enabling new use cases beyond simple value transfer.
How to Buy Bitcoin Cash
Bitcoin Cash is widely available on most major cryptocurrency exchanges. Here is a step-by-step guide to purchasing BCH.
1Compare providers
BCH is available on major exchanges including Coinbase, Kraken, Binance, and many others. Compare fees, spreads, and supported payment methods before choosing where to buy.
2Create an account and verify identity
Register on your chosen exchange and complete identity verification (KYC). This typically requires government ID and may take a few hours to a few days. Enable two-factor authentication (2FA) for security.
3Choose a payment method
Fund your account via bank transfer, credit/debit card, or by depositing other cryptocurrencies. Bank transfers typically have lower fees but take longer. Cards offer instant purchases at higher fees.
4Buy BCH
Place a market order for instant purchase at current prices, or use a limit order to specify your target price. Start with a small test purchase to familiarize yourself with the process.
5Withdraw to your own wallet
For maximum security, withdraw BCH to a personal wallet (see storage section). BCH transactions are cheap and fast, so withdrawals are economical.
Next step: Compare BCH providers in your country to find the best price.
How to Store Bitcoin Cash
Wallet Options
Bitcoin Cash is supported by a wide range of wallets:
- • Mobile wallets: Electron Cash (Android), Bitcoin.com Wallet (iOS/Android), Cake Wallet
- • Desktop wallets: Electron Cash, Bitcoin Cash Node (full node)
- • Hardware wallets: Ledger, Trezor (both support BCH natively)
Hardware Wallets
Ledger and Trezor both provide full BCH support. Hardware wallets are the safest way to store larger amounts of BCH for the long term, as your private keys never leave the device.
Seed phrase and security
When setting up a self-custody wallet, you'll receive a 12 or 24-word seed phrase. Write it down on paper and store it securely offline. Never share your seed phrase or enter it on websites. Anyone with your seed phrase can access your funds. Be careful to use BCH-specific addresses (starting with "bitcoincash:") to avoid sending to the wrong chain.
How to Use Bitcoin Cash (BCH)
Everyday Payments
Bitcoin Cash's primary use case is peer-to-peer payments. With sub-cent fees and reliable confirmations, BCH works well for everyday purchases — from coffee to online services. Merchants benefit from low processing costs compared to credit card networks, and there are no chargebacks.
Cross-Border Remittances
BCH is well-suited for international money transfers due to its low fees and fast settlement. Sending $1,000 worth of BCH costs less than a cent in fees, regardless of the destination country — a fraction of what traditional remittance services charge.
Tipping and Micropayments
Because BCH fees are so low, it is practical for micropayments and tipping — use cases where Bitcoin's higher fees make small transactions uneconomical. Content creators, social media platforms, and gaming applications can leverage BCH for tiny value transfers.
CashTokens and DeFi
With the CashTokens upgrade, BCH now supports fungible tokens and NFTs natively. Developers can build decentralized applications, create tokenized assets, and build DeFi protocols directly on the Bitcoin Cash blockchain without relying on separate layer-2 networks.
Risks
BCH carries risks common to all cryptocurrencies: price volatility, security risks from self-custody, and evolving regulations. Additionally, BCH has lower hashrate and network effects compared to Bitcoin, and its price has generally declined relative to BTC since the fork. The community has also experienced splits (BCH/BSV), highlighting governance risks.
Notable People in Bitcoin Cash
Bitcoin Cash was born from a community-driven effort to scale Bitcoin for everyday use. Here are some key figures who have shaped BCH's development and adoption.
Roger Ver
Known as "Bitcoin Jesus" for his early evangelism of Bitcoin, Roger Ver became the most prominent advocate for Bitcoin Cash. As the operator of Bitcoin.com, he championed BCH as the true continuation of Bitcoin's peer-to-peer cash vision.
Jihan Wu
Co-founder of Bitmain, the world's largest Bitcoin mining hardware manufacturer. Jihan Wu and Bitmain provided crucial mining support for the Bitcoin Cash fork, ensuring the new chain had sufficient hashrate to survive and thrive.
Amaury Sechet
Lead developer of Bitcoin ABC, the primary client software for the Bitcoin Cash fork. Sechet was instrumental in implementing the technical changes that created BCH. He later left the project after disagreements over a developer funding mechanism.
Gavin Andresen
Former lead maintainer of Bitcoin Core who advocated for larger blocks. While not directly leading the BCH fork, his early support for block size increases aligned with the philosophy that ultimately produced Bitcoin Cash.
Rick Falkvinge
Founder of the Swedish Pirate Party and early Bitcoin Cash advocate. Falkvinge has been vocal about BCH's utility as electronic cash and its potential for censorship-resistant payments.
Regulation Overview for Bitcoin Cash
Regulatory Status
Bitcoin Cash is treated similarly to Bitcoin from a regulatory perspective in most jurisdictions. As a Proof-of-Work cryptocurrency with no pre-mine and no ICO, BCH has not faced securities classification concerns. It is widely available on regulated exchanges worldwide.
Country Differences
Regulations vary by jurisdiction. Here is a snapshot:
United States: BCH is legal and widely available on US exchanges. Tax treatment follows standard crypto rules — capital gains apply to sales. The IRS treats BCH as property.
Canada: Legal and subject to capital gains tax. Available on most Canadian exchanges with Interac e-Transfer support.
European Union: Legal across the EU. Subject to MiCA regulations which provide a clear framework for crypto assets.
Australia: Legal and available on Australian exchanges. Subject to capital gains tax rules enforced by the ATO.
BCH benefits from being classified similarly to Bitcoin in most regulatory frameworks, making it one of the more accessible cryptocurrencies globally.
FAQs About Bitcoin Cash (BCH)
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