Bitcoin CashBCH to USD
Improving Bitcoin’s ability to handle large transaction volumes at high speed and low cost has been a technological challenge since the launch of the protocol. How best to achieve this eventually led to irreconcilable disagreements in the Bitcoin community, and a part of the community split off and created Bitcoin Cash in 2017 by forking the original protocol.
The proponents of Bitcoin Cash wanted to make the protocol better suited for being used in day-to-day transactions, including micropayments, and proposed to increase the block size to achieve this. The opponents of this change believed that greater processing power necessary for larger block sizes would lead to unwelcome centralisation which would ultimately threaten Bitcoin’s core value and principles – the opponents effectively prioritising Bitcoin’s store of value properties over the feature that might make it a better medium of exchange to be used in transactions.
Bitcoin Cash increased the original 1MB block size limit to 8MB. Although Bitcoin Cash never came close to using the 8MB limit, in 2018 the block size limit was increased to 32MB, in anticipation of mass adoption. The limit can easily be increased further, should it be reached. So far, apart from brief periods of high usage, the actual block size was typically around 100KB until the beginning of this year, when it ramped up to around 1MB.
So far, apart from brief periods of high usage, the actual block size was typically around 100KB until early 2021 when it briefly ramped up to over 1.5MB, reverting to 2-300KB by the end of 2021.
Further disagreements on how scalable Bitcoin Cash should be ultimately led to it being forked further into Bitcoin SV in late 2018.
Bitcoin Cash added a token creation platform called the Simple Ledger Protocol in 2018. Smart Bitcoin Cash (Smartbch), an Ethereum and Web3 compatible sidechain for smart contracts was launched in 2020.
The best known proponent of Bitcoin Cash has been Roger Ver.
Initial core allies in supporting the creation of Bitcoin Cash and its vision have later went on to create further Bitcoin Cash forks after eventual disagreements on vision, with Craig Wright pushing for the creation of Bitcoin SV, and Amaury Sechet the Bitcoin Cash ABC fork.
Funding development on Bitcoin Cash has been challenging, and led to brainstorming and debate on how to fund ongoing development of open source projects in general. In Bitcoin Cash’s case, successful fundraisers have helped, and certain miners have also volunteered a share of their profits for a period of time.
Bitcoin Cash is a fork of the original Bitcoin protocol, and it has the same supply as Bitcoin, i.e. a maximum of 21 million tokens. And as with Bitcoin, the rate of supply growth declines over time as the amount of tokens issued as mining reward halves roughly every four years.
At the time of Bitcoin Cash’s launch, tokens were distributed to Bitcoin holders through an airdrop. Bitcoin Cash is more concentrated among large holders than Bitcoin (but a lot less than Litecoin).
Largely because of a period of deviation from the target 10-minute block times on Bitcoin Cash (which was later addressed with a code change), there is a slight difference between the total number of Bitcoin Cash tokens in issue versus Bitcoin. However, the trajectory of future token issuance is expected to proceed at roughly the same rate, and converge to the maximum limit around 2040.
Key value drivers
Bitcoin Cash has been an underperformer in the midst of significant innovation in the blockchain protocol space, and despite growth in their targetted use case of day-to-day transactions and micropayments, the transaction volumes remain relatively low.
However, there is focus and drive behind the project, both in terms of expanding the user base and bringing new use cases and applications to the platform.
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