A Basic Guide to Bitcoin Cash (BCH)

A Basic Guide to Bitcoin Cash (BCH)


Bitcoin Cash (BCH) emerged in August 2017 as a result of political disagreements within the blockchain community. Dissatisfied with Bitcoin's development direction, a coalition of developers, investors, entrepreneurs, and miners decided to create a new project. Bitcoin Cash, also known as Bitcoin ABC (Adjustable Blocksize Cap), is designed to be a peer-to-peer electronic cash system with a focus on scalability and minimal transaction fees.

Bitcoin’s Scalability Issue

In 2017, Bitcoin faced issues with slow transaction confirmations and high fees. This led to a debate within the Bitcoin community about increasing the block size limit. To make changes to the Bitcoin protocol, widespread agreement among network nodes was necessary due to its decentralized nature.

As a response to these challenges, Bitcoin Cash emerged as a cryptocurrency with lower transaction fees and faster confirmations. Supporters argued that Bitcoin Cash better aligned with Satoshi Nakamoto's vision of a peer-to-peer electronic currency, offering a more practical payment system for daily use.

Shortly after the creation of Bitcoin Cash, the original Bitcoin blockchain underwent an upgrade called SegWit (Segregated Witness). This upgrade, developed by Pieter Wuille in 2015, aimed to address network congestion and scalability concerns.

While the SegWit upgrade was planned before the emergence of Bitcoin Cash, proponents of Bitcoin Cash believed that increasing the block size limit was a more effective solution. Notable figures in the blockchain industry, including Jihan Wu and Roger Ver, supported the Bitcoin Cash fork from Bitcoin.

What Is Bitcoin Cash?

Bitcoin Cash was created as a direct fork from the original Bitcoin source code, resulting in several similarities between the two networks. Both Bitcoin and Bitcoin Cash utilize a Proof of Work consensus mechanism and have an open structure that allows anyone to participate and contribute. Additionally, during the fork, any BTC address held before the event received an equivalent amount of BCH in a separate network, maintaining the same address string.

Technical Specifications

Bitcoin Cash maintains a target block time of 10 minutes, similar to Bitcoin, and has a maximum supply of 21 million coins. The emission rate of BCH is halved approximately every four years or every 210,000 blocks. Notably, Bitcoin Cash distinguishes itself from Bitcoin by implementing an increased block size limit. Initially, the block size limit was raised from 1 MB to 8 MB, and in 2018, it was further increased to 32 MB. This larger block size enables more transactions to be included in each block. However, since its inception in 2017, Bitcoin Cash has rarely exceeded a block size of 1 MB.


Bitcoin and Bitcoin Cash both utilize a difficulty adjustment algorithm (DAA) to regulate mining difficulty, but they differ in how often they make adjustments. Bitcoin adjusts its difficulty every 2016 blocks, while Bitcoin Cash adjusts its difficulty after each block.

Bitcoin Cash previously implemented an emergency difficulty adjustment (EDA) algorithm to reduce mining difficulty and encourage miner participation. However, due to its instability, the EDA algorithm was eventually removed. This implementation of EDA is why the Bitcoin Cash blockchain has accumulated thousands of blocks more than Bitcoin.

In 2019, Bitcoin Cash introduced Schnorr Signatures, an alternative algorithm that modifies the usage of digital signatures. Schnorr Signatures enhance privacy and scalability compared to the ECDSA scheme. Subsequently, Bitcoin also adopted Schnorr Signatures as part of its Taproot Update.

Main Characteristics of Bitcoin Cash

  1. Based on the original Bitcoin protocol.
  2. Capped supply at 21 million coins.
  3. Utilizes Proof of Work (PoW) consensus mechanism for coin issuance.
  4. Increased block size from 1 MB to 32 MB.
  5. The community claims alignment with Satoshi's original vision.
  6. Mining difficulty adjusts after each block using the difficulty adjustment algorithm (DAA).
  7. Did not implement SegWit.
  8. Implemented Schnorr Signatures in 2019.
  9. Smart contract development added as a later update.

Everyday Payments

The Bitcoin Cash community advocates BCH as a currency designed for everyday use, offering quick and convenient transactions for sending and receiving the money to individuals and businesses with a BCH wallet. With fast transaction times and low fees, BCH proves to be a viable option, especially for small payments, potentially surpassing Bitcoin's base layer. Although some stores and merchants accept Bitcoin Cash payments, widespread adoption is still limited, and the accuracy or currency of available information on platforms like the Bitcoin.com Map may vary, as it lists thousands of stores accepting BCH, but not all may currently offer this payment option.

Storing Bitcoin Cash

To store Bitcoin Cash, we suggest using Trust Wallet or other popular crypto wallets like Ledger, Trezor, and Cobo Vault. Electrum Cash is also a reliable option for desktop storage.

Bitcoin.com and Coinomi wallets are recommended by some Bitcoin Cash proponents for BCH storage. These software wallets are compatible with various operating systems, including Windows, Mac, Linux, Android, and iOS. It's crucial to note that Bitcoin and Bitcoin Cash operate on separate blockchain networks. Therefore, it is not possible to send Bitcoin to a Bitcoin Cash wallet address or vice versa.


Bitcoin Cash emerged as one of the notable projects that forked from Bitcoin. While it may not have achieved the same level of popularity as Bitcoin, BCH is accepted by some stores due to its faster transactions and lower fees. However, Bitcoin remains the more secure and widely adopted cryptocurrency compared to BCH.

Bitcoin Cash
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