One of the main properties of cryptocurrency is the immutability of the blockchain. If, after the launch of a blockchain project, problems arise that require a radical correction of the system, one of the most common solutions is to split the blockchain into two independent branches. This results in a fork, i.e., a new virtual asset created based on the same programming code as the original crypto coin. One example of this is bitcoin cache, which is virtual money that appeared after the block chain of the first Bitcoin cryptocurrency was split. If you try to explain what bitcoin cache is in simple words, the answer is: bitcoin cache is a new bitcoin, which increased the amount of information block and introduced a new digital signature algorithm. Why we need to take such measures we will consider later, but for now a little history.
The history of the Bitcoin cryptocurrency began back in 1982, when Professor David Chaum founded the Association for Cryptographic Research. He also developed and introduced the concept of digital payment systems. Two years later, Chaum founded the DigiCash electronic payment company and tried to create a secure Internet-currency. But he failed and a few years later DigiCash declared bankruptcy. Nevertheless, the idea resonated and in 1998 Professor Nick Szabo tried to launch a decentralized payment network Bit Gold, working on a technology very similar to the bitcoin blockchain. But this project was unsuccessful as well. It took another 10 years, and finally on October 31, 2008, a white paper Bitcoin: A Peer-to-Peer Electronic Cash System was published, which opened the door to the era of digital money.
The first bitcoin block was generated on 3.01.2009, the network grew and evolved with more and more new participants. In 2017, the loads in the system increased so much that the developers were forced to take drastic measures to increase the throughput. Segregated Witness softforcing was implemented, the network remained in the same mode, but the data storage structure and transaction verification algorithm changed. New Segwit addresses (beginning with bc1) appeared. This caused some difficulties with transfers to outdated bitcoin clients that do not support the changes in the protocol, the problem was soon solved. But, some developers had their own point of view on the developments.
One member of the Bitcoin team, former Facebook employee Amory Sechet, decided to take a different path. Together with like-minded people, which included well-known members of the bitcoin community such as Roger Wehr and Jihan Wu, they conducted a network hardfork on the 478558th blockchain. This is how the digital currency bitcoin cache was born. In doing so, all holders of the original bitcoin automatically received new coins into their wallets. In this review, we will explain what Bitcoin Cash is, the advantages and principles of the platform compared to the patriarch of all cryptocurrencies, and analysts' predictions about the future of the BCH fork.
What is Bitcoin Cash
And so let's say again what Bitcoin Cash is. It is a steadily working system of electronic payments which makes very fast and inexpensive transfers in cryptocurrency. Advantages of Bitcoin Cash over bitcoin:
- High transaction processing speed. Bitcoin Cash pools process 100 transactions per second, while pools in the Bitcoin network are no more than three.
- Low commissions (0.000013 BCH on average).
- Mechanism of protection against erasure and re-execution of transfers. You can put a separate digital signature under the amount of the transaction to enhance the security of the transaction.
In addition, the way bitcoin cache works allows you to adjust the mining complexity every 6 blocks, rather than every 2016 like bitcoin.
The coin became quite popular and at the end of November 2017, was already worth $1,000, and a month later $4,300. Such a price did not last long, but nevertheless bitcoin cache currency is among the top five blockchain projects with the highest level of capitalization, along with BTC, ETH, Ripple and LTC. The bitcoin cache is one of the top five blockchain projects.
In 2018, the bitcoin cache network underwent its own hard-fork. Craig Wright, calling himself the real Satoshi Nakamoto, created the Bitcoin SV coin, while Roger Wehr and his other supporters continued on the old chain. Their cryptocurrency became Bitcoin Cash ABC, but retained the old ticker and is highly trusted in the blockchain community and popular on exchanges.
Reason for creating the coin, why the fork happened
Bitcoin Cash is primarily a payment instrument. The spring 2019 hardfork, introduced Schnorr signatures to improve privacy and speed up transaction processing even more, returned the Segwit protocol, and increased block size to a record 32MB. The developers said they were testing a new bitcoin Cash.
The developers said testing has shown that bitcoin cache generation is possible with a gigabyte block size, and presumably the network could process terabyte blocks of information as well.
In contrast to other blockchain projects, Bitcoin Cash programmers have raised the maximum block capacity to a level that allows it to process 32 times as many transfers as the bitcoin network had during peak periods.
It turns out that cryptocurrency scalability issues are greatly exaggerated. After the release of more modern computing equipment capable of solving terrablocks and development of software all the advantages of VISA, MASTERCARD and other similar payment systems will go up in smoke.
Indeed, the problems of scalability of cryptocurrencies are greatly exaggerated.
Where coins come from
The Bitcoin Cache network, like the original bitcoin, operates on a Proof-of-Work principle. Miners process transactions and keep the system secure. How it works in practice.
The word mining is anglicized and literally translates to mining. In order to calculate the hash amount of a BCH block, a specialized device on integrated circuits (ASIC) is needed. BCH ASICs are electronic devices designed for the sole purpose of generating bitcoin hash and other cryptocurrencies using the SHA-256 algorithm. The original Bitcoin and BitcoinSV, and 40 other cryptocurrencies also work on this algorithm.
Despite the fact that the latest models of ASICS have a capacity up to 60 TH/s for mining in solo one device is not enough. Miners join together in pools for collective mining. The total capacity of Bitcoin Cash network is 1EH (exacheesh), which is equal to about 17,000 ASIC-miner of the last model, higher power has only the network of original bitcoin. At the same time mining BCH on ASIC processors is not inferior to BTC mining in terms of profitability.
Decentralization of the BCH network
In January 2019, collective mining server btc.top concentrated over 51% of the BCH network's capacity under its control, which was a direct threat to decentralization, but the problem was quickly resolved. Nevertheless Bitcoin cash is less popular than Bitcoin, BCH miners sometimes process blocks not exceeding 1-2 MB.
What Bitcoin cash is secured with
POW (proof-of-work) cryptocurrency networks are used to provide the power of mining pools. Miners mining Bitcoin Cash virtual money create new blocks and prove transactions. Thus, the network of decentralized payments lives and grows.
The greater the number of working miners determines the safety of the system: the more of them, the more evenly income is distributed and decentralization increases. In peer-to-peer networks there cannot be a single control center like in a bank. The blockchain project depends solely on the miners, coin holders and programmers.
The value of a cryptocurrency is determined by the combined supply and demand on exchanges. The more people are willing to use BCH as a means of payment, the higher the value of the coin.
The complexity of solving a block changes on average after one hour. This principle of bitcoin cache, allows to maintain functionality even with minimal hashraying. Even if there are only 20-30 miners left in the network, the transactions will still be processed.
Emission
Emission is the generation of new cryptocurrencies in a particular blockchain system. Since Bitcoin Cash is a fork of the first cryptocurrency BTC, they should have the same limit of 21,000,000 coins to be issued. In this case 15,000,000 appeared immediately after branching, because the BCH blockchain completely copies the original chain of bitcoin blocks.
The remuneration to miners is 12.5 coins for each block signed. Halving, that is, halving the payment, in the bitcoin kesh network occurs in the same way as in the bitcoin network (every 4 years). According to preliminary calculations, bitcoin cache mining will end in 15 years.
But this does not mean that cryptocurrency miners will have nothing more to pay and the Bitcoin Cash network will collapse. Provided there is enough demand for the cryptocurrency, transaction fees will generate good profits.
What you can buy with bitcoin cash
The BCH cryptocurrency is not only easily convertible into fiat money. 1,649 stores, cafes and restaurants around the world accept bitcoin cache coins. You'll find a full list in the Marco Coino smartphone app.
How to buy bitcoin cash
You can buy or exchange bitcoin cache on online crypto trading platforms. You'll need a bitcoin client or a multi-currency wallet to place the coins you buy. The creators of BCH didn't bother to develop their own wallet, but decided to use Bitcoin.com as their primary storage option. This solution allows you to put BTC and BCH in one wallet, which is very convenient for traders and miners.
Exchanges and exchangers
If you can't do bitcoin cache mining, you can buy cryptocurrency for fiat:
- In internet exchanges;
- On exchanges;
- From individuals on P2P Marketplace LocalBitcoinCash.org.
The easiest way is to use the services of major exchanges. Go to Binance monitoring site beforehand in order not to run into scammers. Pay attention both to bitcoin cash chart vs. dollar or ruble and to the minimum amount of transaction.
On online exchanges, the exchange rate can be more favorable, but to purchase cryptocurrency with traditional money, you need to verify your account. This requires uploading scanned copies of documents proving your identity and place of residence to the trading site. As well as a bank statement, and then wait for the security service to verify the data. The procedure takes anywhere from two hours to two days, which isn't always convenient.
LocalBitcoinCash differs from a standard exchange in that you negotiate directly with the buyer. The P2P platform pays attention to customer reputation, but you still need to be careful and thoroughly negotiate the terms of the deal. LocalBitcoinCash differs from a regular exchange in that you negotiate directly with the buyer.
How to store correctly
In addition to the original bitcoin wallet, there are desktop programs to choose from:
- Trust wallet;
- Electron Cash;
- Exodus;
- Bitpay
- Badger Wallet.
And 10 mobile apps and paper wallets Cash Adress and WalletGenerator.net. If you decide to use the paper version, download the key generation app and open the index.html file directly on your computer. Be sure to turn off the internet before creating your wallet. Print your keys on a printer and keep them in a safe place. You can use the interface of any Bitcoin client to access your funds.
There are a lot of online services and browser extensions for storing digital assets. These wallets are not very secure, so they are not listed on the official Bitcoin Cash website. Deposits from cryptocurrency exchanges are an even less reliable storage option.
If you have a fairly large amount of money, buy yourself a hardware safe. It's an electronic device with special software to protect against hackers. Your private keys will be completely safe.
How to check a Bitcoin Cash transaction
How do I track transaction approvals and other transaction details on Bitcoin Cash? It is convenient to use the https://blockchair.com/bitcoin-cash resource for this purpose. The service is translated into nine languages and searches information on seventeen blockchains at once. As the developers themselves position it, it's «google for blockchains».
Going to the Bitcoin Cash page, you immediately get visually and affordably presented information about the current state of the distributed network, as well as graphs and charts of its recent changes. There is an opportunity to find out such information as the complexity of the network, amount of coins in circulation, value and capitalization of BCH and many others.
The search for transactions is done via the top line, where you must insert the txid (hash of the transaction). The wallet or exchanger, from which the funds were transferred, can help you find it out.
Blockchair will provide the following payment information upon request:
- Sender and recipient.
- The amount of the transfer. You can view it in BCH or dollars with the toggle.
- Number of network approvals for the transaction.
- Commission (total and per byte).
- Number of inputs and outputs.
- Send time.
- Lock time.
Provides API documentation for developers. Anyone can also download a PDF file with full information about the translation. The receipt will contain a QR-code that can be used to verify its authenticity. Blockchair's services are available to anyone.
Blockchair's services are currently used by dozens of software and hardware wallets, exchanges, mining pools, information resources, decentralized applications. The general partners are Bitmain and GitHub.
The site is user-friendly and intuitive, with all the important information in plain sight. In addition to the blockchair, Blockchair also provides other services. You can analyze rates of cryptocurrencies, compare different coins to each other, use API documentation, explore the database of datasets. There is a node browser (nodes) for eight blockchains, including Bitcoin Cash.
For convenience, Blockchair can be installed as an extension for the Chrome or Firefox browser. There are onion versions of the site for the Tor browser, completely anonymous and without java scripts, which will be interesting for those who want maximum privacy on the web.
Blockchair is also available in an online version.
Closure
We tried to briefly tell you all about bitcoin cache, perhaps the only successful fork of the first cryptocurrency. Despite numerous critics, the project is developing and its developers have very ambitious plans. It is difficult to give an exact bitcoin cache forecast, everything will depend on many factors.
First and foremost on how quickly the digital literacy of the population will increase. The advantages of cryptocurrency over fiat are obvious, and more and more people use anonymous, secure and reliable blockchain transactions. Cryptocurrency payment networks have never been hacked from the outside.
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