One irony that we might find more often than not is that many cryptocurrencies aren't very good at being “currencies.” Sure, they ought to work wonders on paper. But in reality, some cryptocurrencies are just too precious to spend. Others are too expensive to cover the transactions, while the remainder takes far too long to process, even a simple payment. What then, one might wonder, is the point of using cryptocurrencies? Well, our Bitcoin Cash review aims to sort that out.
While the state and usability of cryptocurrencies, in general, hasn't yet been truly refined to replace the paper dollar as far as sheer simplicity goes, it doesn't mean that progress on fixing this has been idling. There are many cryptos that are just like Bitcoin Cash, remodeling and redesigning cryptocurrencies to be seamless methods for payment, as currencies should be. Low fees, wholly decentralized, and permission-less use… Read our Bitcoin Cash review to learn more.
What is Bitcoin Cash?
Bitcoin Cash, or more popularly known by its ticker symbol, BCH, is a peer-to-peer electronic cash system. Originally, Bitcoin Cash was an upgrade proposal for Bitcoin, whose idea was to increase the maximum block size of Bitcoin from 1MB to 8MB. This increase in block size should have allowed for Bitcoin to be able to process far more transactions and thus be a cost-effective alternative to regular fiat. However, a disagreement led to a hard-fork in August 2017…
Much of the underlying code is shared between Bitcoin Cash and Bitcoin, although Bitcoin Cash has introduced significant upgrades over the years since its hard-fork to better improve on its electronic cash system. Their end goal is to create a digital currency that can sustain easy payments with low fees, facilitate microtransactions, as well as large business transactions. In late 2018, Bitcoin Cash had a chain split that saw the creation of Bitcoin SV and Bitcoin ABC.
How does Bitcoin Cash Work & What are some of its Features?
In our Bitcoin Cash review in 2021, you'll notice a lot of similarities between Bitcoin Cash and Bitcoin. As mentioned earlier, a lot of the codebase is shared between them. For example, Bitcoin Cash is powered by the same SHA-256d-based Proof-of-Work (PoW) consensus algorithm, which relies on mining to validate blocks of transaction data. Miners are then rewarded with a portion of the transaction fees, as well as block rewards as compensation and incentives.
Bitcoin Cash has the same block timing of 10 minutes, and the total supply cap for its native BCH cryptocurrency tokens is set to 21,000,000. However, significant upgrades have been implemented to the Bitcoin Cash blockchain underneath to make through with its promises of being a very effective medium for exchanges and payments. In short, Bitcoin Cash is dedicated to increasing block sizes to accommodate more transaction volume and throughput.
By doing so, Bitcoin Cash would be less of a “digital gold” or highly appreciative store of value like Bitcoin and more akin to a usable currency that you could use day-to-day, such as paying for goods or services. For our Bitcoin Cash review, we're going to take a peek at some of the unique innovations and technologies that they've adopted, where Bitcoin hasn't. This puts Bitcoin Cash with other cryptocurrencies that focus on being “cash,” such as Litecoin or Dash.
1. Dynamic Difficulty Adjustment
One of the biggest challenges for Bitcoin Cash was trying to re-program Bitcoin's original difficulty adjustment algorithm or DAA. Being able to control the block difficulty adjustment is important for several reasons. Mainly, adjusting the difficulty of new blocks can protect the blockchain's overall security from hash rate fluctuations or a malicious attack. Moreover, it judges how fast new blocks can be mined from the blockchain.
This latter point ultimately influences how fast the blockchain can be. For Bitcoin Cash, Bitcoin's original difficulty adjustment of once every 14 or so days was far too long. It would not be sustainable to ensure low-cost transactions across the network. As such, Bitcoin Cash now adopts a dynamic difficulty adjustment that re-assesses and calibrates the mining difficulty after every single block, having already upped its block size to an upper limit of 32MB.
2. Support for Smart Contracts
Bitcoin, in its current state, is not able to have any compatibility with smart contracts. Although Bitcoin Cash is built on the same UTXO (unspent transaction output) distributed ledger design, it is able to support smart contracts functionality thanks to the Cashscript language. With this in mind, Bitcoin Cash could support far more complex services other than simple peer-to-peer or two-way transactions, such as being integrated natively for decentralized finance (DeFi) protocols.
3. Support for Token Issuance
Another limiting factor with Bitcoin is that its blockchain cannot support the creation, issuance, and transaction of native third-party tokens. This is something we most often see with Ethereum, with most of the world's Initial Coin Offerings (ICOs) and projects being built on Ethereum, thus using Ethereum-powered cryptocurrencies of their own alongside Ether. However, Bitcoin Cash is evolving from Bitcoin's simple functionality with the adoption of the Simple Ledger Protocol.
Otherwise known simply as SLP, this protocol allows users on Bitcoin Cash to be able to create their own cryptocurrencies, both in fungible and semi-fungible form, that are powered and secured by the Bitcoin Cash blockchain. As some examples for our Bitcoin Cash review, they can set their own token values (whether it can be split into smaller decimals), adjust its economics by limiting supply or by creating inflation, or whether new tokens can be minted following its initial issuance.
The most exciting news thus far has been seeing that Tether, the largest stablecoin issuer in the world by far, is planning issuance of its USDT tokens using SLP on the Bitcoin Cash blockchain. This opens up a lot of opportunities for the Bitcoin Cash ecosystem to grow beyond processing transactions, as tokens are not necessarily just cryptocurrencies. It may include gaming assets, NFTs, gift cards, synthetic assets, other cryptocurrencies, virtual rights, and so on.
What are Bitcoin Cash's BCH Cryptocurrency Tokens?
The native cryptocurrency of the Bitcoin Cash network is its BCH tokens. As we highlighted earlier in our Bitcoin Cash review, it shares many similarities with Bitcoin's BTC, such as its total supply cap. Bitcoin Cash, therefore, follows the same deflationary tokenomics as Bitcoin, with a block reward halving every 210,000 blocks, or roughly once in every four years. Its latest halving was completed on April 9th, 2020, which halved the rewards to 6.25 BCH per block.
As for how Bitcoin Cash can be used in the real world, it's a great option as an affordable means of sending money anywhere around the world. Network fees for Bitcoin Cash are minimal (less than a penny on average) while also offering each token holder financial sovereignty owing to its decentralized governance. A lack of chargebacks and low cost make it a great option for merchants too. For payments, however, Bitcoin Cash can be a bit slower than others to process.
At the time of writing this Bitcoin Cash review, the value of a single BCH token is worth around $1,430.43. It has seen some growing adoption, and thus some healthy price appreciation since late-2020, having already risen in value over 1,800% from its all-time lows in December 2018. On top of its current circulating supply of 18,729,656 BCH, Bitcoin Cash has a market capitalization value of $26,791,543,758, making BCH the 9th-most valuable cryptocurrency on the market.
What are Bitcoin Cash's Future Roadmap Updates?
For this Bitcoin Cash review, we've found quite an extensive roadmap timeline curated by its community over their development plans for 2021 and beyond. This has been officiated as an impending network upgrade coming along on May 15th, 2021. Mostly, the vast majority of its roadmap, including the upcoming update, is focused on improving Bitcoin Cash's usability as a peer-to-peer currency, which should hopefully yield increased adoption.
One of those updates planned for this coming update is the removal of unconfirmed chain transaction limits, which will allow for higher capacities of transactions to be sent at a time. This is especially helpful for services or merchants that process a high volume of BCH transactions. Other changes include the implementation of double-spending proofs, a new default mining block size of 8MB, and the Cash Improvement Protocols (CHIPs) to better streamline new protocol changes.
Bitcoin Cash Review – Conclusion
In rounding off our Bitcoin Cash review, we've found it refreshing and hopeful to see that some cryptocurrencies are still focused on trying to solve the challenges of their general adoption as currencies. Mainly, cryptocurrencies are mostly too costly or too slow to be used as something you'd pay with when buying a cup of coffee. Bitcoin Cash has yet to settle the slowness part in its entirety, but it does have a cryptocurrency that can transact monies with very low fees.
Bitcoin Cash is getting us one step closer to creating a decentralized, fair, and equitable alternative to regular, central bank-issued fiat currencies. Imagine being able to share money with your friends and family overseas, transacting across borders without paying huge forex or remittances. Or, think of how you can use it for payments without succumbing to hefty merchants and banking fees. Our Bitcoin Cash review shows there's certainly a lot more out there that we've yet to see.
Bitcoin Cash Review
Ease of Use
- Transactions are incurred very minimal fees; less than a penny on average.
- Support for smart contracts opens up new opportunities for additional use-cases and applications, such as DeFi.
- Native support for token issuance has the potential for the Bitcoin Cash ecosystem to grow rapidly into sub-economies powered by third-party tokens.
- Extensive roadmap timeline and plans for the future to improve usability and adoption.
- Transaction/processing times are a bit slower than competing peer-to-peer cryptos.