What is Bitcoin Cash? | How Do Bitcoin and Crypto Work? | Get Started with https://ontopwiki.com

Bitcoin Cash’s core features

Bitcoin Cash is a decentralized peer-to-peer electronic cash system that does not rely on any central authority like a government or fiscal institution. As such, it represents a fundamental redesign of the very nature of money. The core features of Bitcoin Cash are :

  • Open to anyone. Nobody controls or owns Bitcoin Cash. There’s no CEO, and you don’t need to ask for permission to use it.
  • Pseudonymous. Identities are not tied to transactions. This helps to ensure that Bitcoin Cash remains free to be used by anyone, without censorship.
  • Transparent. All transactions are recorded on a global public ledger called the blockchain. The ledger is updated at regular intervals in blocks that are connected to form a chain. This allows anyone to easily see the full history of ownership, and helps to eliminate the potential for fraud.
  • Distributed. The public ledger (blockchain) is stored voluntarily by a network of participants known as ‘nodes.’ This helps to ensure the longevity of information.
  • Rules-based. Nodes follow a set of rules (a protocol) to achieve consensus on the state of the ledger. This consensus is what constitutes the ‘truth’ as to who owns what. The protocol, however, can evolve as participants demand – although there is high-degree of consensus required to make changes. This makes Bitcoin Cash a quasi-political system, with participants forming a kind of social contract.
  • Immutable. The technology deployed means that, once recorded in the blockchain, transactions effectively cannot be altered.
  • Secure. Through a process known as Proof of Work (PoW), ‘miners’ compete to add new blocks to the chain that constitutes the ledger (again, the blockchain). The hardware and energy costs associated with PoW mining contribute to the security of the network along game-theory driven principles such that attacking the network is both prohibitively expensive and guarantees the attacker cannot profit directly.
  • Fixed supply. Only 21 million coins will ever be created. This makes Bitcoin Cash a hard asset, like land or gold, providing an opportunity for people to store value in digital realm over long periods of time.
  • Low Fees. Bitcoin Cash enables reliable, fast, and affordable transactions of any value and regardless of location (including cross-border transactions). This makes it an effective alternative to payment networks like Visa and Mastercard.

What is Bitcoin Cash used for?

Bitcoin Cash ‘s above-described core features make it both a long-run shop of prize and a highly effective medium of central. More philosophically, these two habit cases combine with the decentralized and capable nature of the protocol to make Bitcoin Cash ( the network ) a method acting for supporting and enhancing ball-shaped economic freedom .

Long-term store of value

The total issue of Bitcoin Cash will never exceed 21 million coins. This is written into the code that defines the Bitcoin Cash protocol. As a decentralized net, Bitcoin Cash users ultimately decide how the protocol evolves – and since it is not in the interests of participants to dilute their holdings by changing the protocol, the 21-million-coin limit will about surely remain in place constantly .
The rate that new coins are added to the circulating issue gradually decreases along a define agenda that is besides built into the code. The issue rate is cut in half approximately every four years. This makes Bitcoin Cash a ‘disinflationary ‘ asset.

In April 2020, the third gear ‘halving ‘ reduced the issue rate from 12.5 to 6.25 BCH per stop. At that steer 18,375,000 of the 21 million coins ( 87.5 % of the total ) had been distributed. The fourth halve, in 2024, will reduce the issue to 3.125 BCH, and sol on until approximately the year 2136, when the concluding halve will decrease the parry reward to just 0.00000168 BCH .
Bitcoin Cash ‘s ‘set-in-stone ‘ provide schedule makes it unique among hard assets. By comparison, the supply of gold, although specify, is however subject to the forces of add and demand. As the price of gold rises, more gold miners are incentivized to search for gold. The leads to an increase in the supply of gold, which places down atmospheric pressure on the price .

Highly effective medium of exchange

Bitcoin Cash enables peer-to-peer payments between individuals – just like cash, but in the digital region. Critically, fees for sending Bitcoin Cash typically amount to less than a penny per transaction, and liquidation occurs near immediately, regardless of the physical placement of participants. This makes Bitcoin Cash useful for not only remittances and cross-border trade, but besides for daily transactions like buying groceries. Since the fees and transaction times are indeed humble, Bitcoin Cash is besides effective for micro-transaction habit cases like tipping subject creators and rewarding app users .

Economic freedom

economic freedom is the ability for individuals to freely acquire and use personal resources however they choose, both independently and in cooperation with others. It is a full of life component of human dignity and a fundamental human good. Money – as a vehicle that can be used for both store and exchanging measure – is a cardinal tool for enabling economic exemption .
Bitcoin Cash provides, on an opt-in footing, an option class of money that supports economic freedom. Unlike home currencies, Bitcoin Cash integrates strong protection against ( 1 ) monetary confiscation, ( 2 ) censoring, and ( 3 ) devaluation through uncapped ostentation .

Is Bitcoin Cash different from Bitcoin?

Bitcoin Cash is considered a ‘fork ‘ of Bitcoin. It was created on August 1 2017 after participants in the Bitcoin ecosystem were unable to agree on methods for scaling the cryptocurrency .
The main point of controversy was ‘block size, ‘ which is relevant for the volume of transactions that can be processed per second ( aka the ‘throughput ‘ ). Since transactions consist of data, a larger block size enables more transactions to be included in each forget, resulting in a higher throughput .
The Bitcoin protocol had for years limited the size of each block to 1MB. As the numeral of Bitcoin users grew, rival for the limited block size gradually led to higher transaction fees and prolonged settlement times. Under these conditions, while Bitcoin retained its utility for settling high-value transactions and/or transactions where speed is less relevant, it lost a lot of its utility as a culture medium of commute for small-value purchases where fees and village time are important. In other words, it became less useful as ‘cash. ‘
Bitcoin is not a electrostatic protocol. Integrating changes – or the ‘governance ‘ of Bitcoin – is a quasi-political process based on deliberation, persuasion, and volition. In other words, people decide what Bitcoin is .
Faced with the challenge of scaling Bitcoin, one side felt the need to maintain 1MB block sizes. They contended that it was better to scale Bitcoin ‘off chain, ‘ internet explorer. on a second-layer solution, leaving the ‘on-chain ‘ base settlement level for larger transactions only. The other side wanted to increase the block size, allowing for more transactions per block. This moment upgrade was seen as a bare method to keep transactions flying and reliable, and fees broken .
Since the Bitcoin community was unable to agree on the change, the leave was a ‘hard fork, ‘ or a point in time where two versions of Bitcoin diverged. The version that included the block size upgrade was given the list Bitcoin Cash ( BCH ), while the unchanged version retained the name Bitcoin ( BTC ).

Read more : What is Bitcoin ?

What’s the difference between Bitcoin and Bitcoin Cash?

Since branching in 2017, the multiple independent teams of developers working on the Bitcoin Cash protocol have brought a number of innovations aimed at improving the serviceability of Bitcoin Cash as a peer-to-peer electronic cash system that supports economic exemption. These innovations, which set Bitcoin Cash apart from Bitcoin, are summarized below :

Maximum block size

Bitcoin Cash has a larger maximum block size ( 32MB ) than Bitcoin ( 1MB ). The larger engine block size increases the volume of transactions that the Bitcoin Cash net can process on chain. While Bitcoin typically processes between 3-7 transactions per second, Bitcoin Cash has the capacity to process deoxyadenosine monophosphate many as 200 transactions per second. This helps to reduce the price per transaction and increase transaction focal ratio and dependability. Bitcoin Cash transactions typically cost less than a penny. By comparison, the median on-chain Bitcoin ( BTC ) transaction fee has been in the range of $ 1-15 since 2020 .

Smart contract support

Bitcoin Cash developers can use ache compress languages like Cashscript to enable more building complex functions than the basic transactions that are possible on Bitcoin. This creates the possibility of ‘decentralized finance ‘ applications like synthetic derivates trade. early use cases include individual payments with tools such as CashShuffle and CashFusion. It besides allows for ‘token issue ‘ ( see below ) .

Token issuance

Using the Simple Ledger Protocol, developers can issue new tokens that live on the Bitcoin Cash blockchain similar to how ERC-20 tokens live on the Ethereum blockchain. For exemplar, Tether, the largest issuer of USD stablecoins, has issued USDT tokens that live on the Bitcoin Cash chain. This enables people to send and receive USDT for pennies per transaction using a non-custodial digital wallet like the Bitcoin.com Wallet .

Non-Fungible Tokens

The Simple Ledger Protocol besides supports Non-Fungible Tokens ( NFTs ), similar in function to Ethereum ‘s ERC-721 standard. The key feature of NFTs is that they are digital tokens which are distinguishable from each other. This enables a wide range of potential function cases, from digital artwork marketplaces to tradeable in-game items .

No ‘replace-by-fee’

Replace-by-fee on Bitcoin ( BTC ) allows for transactions to be cancelled/double-spent while unconfirmed. The miss of replace-by-fee in the Bitcoin Cash ( BCH ) protocol makes Bitcoin Cash more procure, as unconfirmed transactions are * efficaciously * * irreversible. It besides enables near-instant transactions of small amounts. With the May 2021 Bitcoin Cash protocol upgrade, the unconfirmed chained transaction specify ( which was previously set at 50 ) was removed and double-spend tests were introduced. This further enhanced Bitcoin Cash ‘s utility as a payment solution where a high volume of small-value transactions must be processed in a short-circuit time .

* Note that technically it is calm possible to double spend a Bitcoin Cash transaction. however, to do then would require connivance with miners and/or bribing miners to accept a second transaction over the first by attaching a very high transaction fee. For this reason, when receiving a large amount of BCH, it ‘s advisable to wait until the transaction has been confirmed on the blockchain. Read more about double spends on the Bitcoin Cash network here .

Schnorr signatures

This is a digital key signature schema that allows for more complex sign capabilities. Transactions that adopt Schnorr signatures consume less quad, making them less expensive. Although presently supported by the Bitcoin Cash protocol, Schnorr signatures have so far to be widely adopted by wallet providers. When adoption of Schnorr signatures is widespread, it has the electric potential to enhance the network ‘s privacy by improving the exchangeability of tokens ( efficaciously making all transactions appear to third-party observers to be more exchangeable to each other ) .

Difficulty adjustment algorithm

Bitcoin Cash deploys an exponential motivate prey difficulty alteration algorithm called aserti3-2d. For every two days that blocks are behind agenda, the difficulty is cut in half, while for every two days blocks are ahead of schedule, the difficulty doubles. This difficulty alteration algorithm helps to ensure new blocks are generated at a stable rate ( every 10 minutes ) even if there is high price volatility and hashish office elasticity. For example, in the event that SHA256 miners move their hash exponent from BTC to BCH and back, Bitcoin Cash ‘s trouble allowance algorithm ensures blocks continue to be produced at the coveted consistent rate.

Read more: Events Timeline

Read more : How to use Bitcoin Cash .
Visit Bitcoin Cash Projects to browse through the fully list of projects and applications .
Keep up with the latest news and engage with the Bitcoin Cash community in the Bitcoin Cash Telegram Channel .

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Category : Finance

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