A project which branched off from Bitcoin with the goal of becoming a payments system for microtransactions.
Mission
With the Bitcoin community split over the cryptocurrency’s potential for scalability as a payments system – as opposed to a store of value – the decision was taken in 2017 to create a ‘hard fork’, effectively splitting it into two.
While its market cap is far below that of BTC, all holders of the market-leading crypto received an equivalent amount of BCH at the time of the split. Leading exchanges including Coinbase boycotted BCH at inception.
Use-cases
Bitcoin Cash allows the transfer of currency between individuals or payments to participating merchants for goods and services.
These are made possible through extremely low transaction fees – less than a tenth of a cent – which are the result of an increase in the block size on the blockchain from the 1MB of BTC to 8MB at the time of the split.
This allows BCH to process significantly more transactions per second compared with BTC, and payments have only gotten faster as the block size has been increased by at least another 400% since then.
Cross-border remittance payments are also made practically for free through BCH.
Founders
Going back to BTC, a mystery: the original whitepaper was written by a person, or group of people, using the alias Satoshi Nakamoto, and speculation continues as to their true identity.
BCH was backed by a hardcore of former BTC advocates, but itself underwent a hard fork a year later, leading to the creation of Bitcoin SV.
Economics
As with BTC, computers can ‘mine’ BCH by verifying transactions, which are then added to the blockchain, through the solving of complex hashing puzzles. Miners receive rewards for every block that they successfully add to the blockchain. The rewards have declined over time as the supply in circulation climbs towards the maximum of 21 million BCH tokens.
BCH is a deflationary currency, meaning its total supply is limited. Unlike a fiat currency such as the US dollar, the hard, predictable rules over the supply are intended to preserve value over time. Fiat currencies are subject to inflation as central banks print more money, decreasing their value.