What Is Bitcoin Cash and How Does Bitcoin Cash Work?

what is bitcoin cash

Bitcoin Cash is an upgraded version of Bitcoin designed to overcome its limitations. In simpler terms, Bitcoin Cash is a decentralized digital currency that operates independently of banks and governments. Let’s dive deeper into how Bitcoin Cash works with Coinminutes.

What Is Bitcoin Cash?

What is Bitcoin Cash? It is a peer-to-peer electronic currency. Allows users to pay directly from one party to another quickly and almost free of charge without having to go through any financial institution. It is quite similar to the concept of Bitcoin (BTC). So why do these two coins have such similar definitions? The simplest answer is that Bitcoin Cash is the first blockchain fork (Hard Fork) from the Bitcoin blockchain.

With the above definition, Bitcoin Cash identifies itself as a blockchain developed according to the original idea when creating Bitcoin – A Peer Peer Electronic Cash.

The History of Bitcoin Cash

The genesis block, marking the inception of Bitcoin, was officially mined on January 3, 2009. Since then, Bitcoin has gained immense popularity, yet it grapples with issues related to scalability and prolonged transaction times. To address these challenges, Bitcoin Cash emerged as a solution in 2017.

Bitcoin Cash was conceived as a hard fork of the Bitcoin blockchain, a significant event occurring at block 478,558. This block introduced a fundamental protocol change, rendering all prior blocks invalid and necessitating nodes to transition to the new chain to maintain operability.

This hard fork essentially represents a substantial software update, redirecting the previous network, Bitcoin, along a distinct path while forging the future trajectory of Bitcoin Cash. The decision to implement the fork was made by various miners and developers within the Bitcoin network, driven by the aspiration to overcome limitations hindering Bitcoin’s intended use for digital transactions rather than solely as a store of value.

However, resistance to the hard fork existed for several reasons. Bitcoin Cash’s larger blocks, while addressing transaction speed concerns, introduced complexities in the mining process, potentially centralizing the platform among powerful miners with substantial computing capabilities, such as corporations.

The forking process also resulted in holders of Bitcoin receiving an equivalent amount of Bitcoin Cash, a common practice in hard forks but criticized by some as a “get-rich-quick” scheme. Advocating for Bitcoin Cash and its advancements over Bitcoin’s technology is Roger Ver, a prominent figure in the cryptocurrency community and an early Bitcoin investor, often referred to as “Bitcoin Jesus.”

Notably, Bitcoin Cash itself underwent subsequent forks, leading to the creation of Bitcoin Cash ABC (BCHA) and Bitcoin SV (BSV). BCHA, akin to the original Bitcoin Cash, directs a portion of block rewards towards network innovation, emphasizing a developer-centric approach. On the other hand, BSV, known as Bitcoin Satoshi Vision, focuses on stability through larger block sizes, proposing a significant increase to 128 megabytes. The absence of a cap until billions of transactions occur allows the community to assess network strains and potentially decide on a future block size limit.

While the cryptocurrency community debates the value of these forks, the Bitcoin Cash network has achieved notable milestones, including surpassing 9,000 transactions per second and allegedly accommodating 16.4 million transactions in a single block during early 2021 on the platform’s scaling testnet.

what is bitcoin cash

How Does Bitcoin Cash Work?

On a technical level, Bitcoin Cash works exactly like Bitcoin. Both Bitcoin Cash and Bitcoin have a hard limit of 21 million units. They use nodes to validate transactions and use the PoW consensus algorithm. If for Bitcoin, miners who authenticate transactions are rewarded with BTC, then with Bitcoin Cash, the reward is BCH.

Bitcoin Cash is settled using larger block sizes (4 – 8 times larger than BTC) for faster transaction processing. These transactions are fast enough that you can make a quick retail purchase with BCH.

Therefore, BCH and BTC perform different roles. Not every cryptocurrency is a store of value, and not every cryptocurrency needs to process data quickly to function like a credit card transaction. Finally, BCH operates faster and has lower transaction fees than its predecessor, thanks to its larger block size. It is much more suitable for smaller transactions, such as buying a cup of coffee with cryptocurrency. On the other hand, Bitcoin Cash supports smart contracts and applications such as CashShuffle and CashFusion.

Bitcoin Cash: Pros and Cons

Each currency always has certain advantages and disadvantages. Although it was born after Bitcoin and almost completely overcome BTC’s problems, Bitcoin Cash still has notable disadvantages:


  • BCH transactions will take you less time, and transaction operations and confirmations are faster, making it easier for you to do and saving time.
  • Low fees per transaction so you can send money anywhere without worrying about fees.
  • More transactions at a cheaper cost.
  • The world’s most powerful blockchain technology.


  • Disadvantages but also advantages of Bitcoin Cash. Because there are not too many parties focused on mining BCH, one unit will likely achieve 51% of the total hash rate.
  • Along with that, the BCH Halving event in April 2020 indirectly caused many operators to leave. This not only makes BCH easily scarce and dependent on a few mining units but also pushes up the price of BCH according to market demand.
  • That can help make profits for investors from the early days or for you right now when BCH has not yet had its price pushed up.

Bitcoin Cash vs. Bitcoin

Distinguishing between Bitcoin and Bitcoin Cash lies primarily in their transaction capabilities. Bitcoin Cash accommodates 25,000 transactions per block, a significant enhancement compared to Bitcoin’s 1,000 to 1,500 transactions per block. This improvement stemmed from a noteworthy increase in the block size, transitioning from 1MB to 8MB, which garnered substantial support and elevated BCH to a prominent position among cryptocurrencies, ranking within the top 20. Subsequently, Bitcoin Cash further expanded its block size to 32MB.

It is crucial to recognize that, during the fork leading to Bitcoin Cash’s inception, Bitcoin was actively pursuing its own solution to transactional challenges. Segregated Witness (SegWit) was an impending upgrade designed to facilitate off-chain transaction solutions, aiming to expedite transaction processing. However, dissatisfaction with this approach prompted the Bitcoin Cash hard fork.

Bitcoin Cash initially entered the market at around $240 per coin and has experienced notable appreciation since then. While its value has not approached the peaks of Bitcoin, the focus of Bitcoin Cash as a payment method rather than a store of value may work to its advantage.

The choice between Bitcoin and Bitcoin Cash involves considerations of block sizes and transaction validation speed, particularly relevant to businesses. Bitcoin Cash’s larger block sizes make it adept at managing smaller transactions, a challenge for Bitcoin. This characteristic is advantageous for scenarios such as restaurant payments, online tipping, and donations. Despite these merits, Bitcoin Cash has its drawbacks. The nomenclature itself can be perplexing for new investors, potentially contributing to misconceptions of Bitcoin Cash as a mere imitation of Bitcoin.

Furthermore, the lower cost of Bitcoin Cash, coupled with its relatively lower prominence in the overall cryptocurrency market, may diminish the incentive for mining on its network. Bitcoin Cash also lacks the extensive range of trading pairs available for Bitcoin, which serves as a universal trading pair across numerous exchanges and cryptocurrencies. Bitcoin Cash, in contrast, is primarily positioned as a means to replace cash and serves a distinct purpose.

Regarding the interdependence of Bitcoin and Bitcoin Cash, while their prices are not directly tethered, an upward movement in Bitcoin’s price often influences a corresponding trend in Bitcoin Cash. This correlation stems from the inclination of significant investors to diversify their portfolios during market upswings, with Bitcoin Cash being a natural choice as a top-ranking cryptocurrency.

How to Buy and Use Bitcoin Cash?

Numerous well-known cryptocurrency exchanges facilitate the buying, selling, and trading of Bitcoin Cash. Registering on these platforms is generally straightforward, but achieving anonymity may pose a challenge, given that major exchanges typically mandate Know Your Customer (KYC) and Anti-Money Laundering (AML) verification, often requiring a photo ID and, in some instances, proof of address and income.

Alternatively, Bitcoin Cash can be acquired through specific cryptocurrency ATMs, necessitating exploration of local options. Additionally, depending on your country of residence, PayPal offers support for Bitcoin Cash transactions.

As for the utility of Bitcoin Cash, its usage is uncomplicated. Owners can employ a wallet address to initiate asset transfers to recipients, be they individuals or merchants.

Bitcoin Cash is accepted by various merchants globally, alongside other cryptocurrencies, as a form of payment for a range of goods and services. Numerous websites catering to travel, e-commerce, and diverse industries may also acknowledge Bitcoin Cash.

However, it is important to acknowledge that Bitcoin Cash does not enjoy the same level of popularity as Bitcoin, resulting in a higher likelihood of encountering merchants who exclusively accept Bitcoin rather than its counterpart.

Should I Buy Bitcoin Cash or Bitcoin?

Today, Bitcoin remains the leading store of value in the cryptocurrency space, but some believe this could change in the future. Thanks to its solid network and better transaction processing speed, BCH will likely become popular and worth investing in.

Although compared to when the BCH price reached its ATH around $4,000, BCH has now lost 90% of its value. However, the trust of the community and experts in BCH is still great.

Will BCH’s flexibility and low transaction fees be enough to eliminate BTC’s current market monopoly? No one can predict, but according to some analysts, the forecast for Bitcoin Cash is promising. Therefore, we can still hope to see positive signs of Bitcoin Cash soon.

The Future of Bitcoin Cash

In the realm of future cryptocurrencies, Bitcoin Cash is carving out its own niche. While Bitcoin holds the majority of public attention, the growing acceptance of Bitcoin Cash by merchants is expected to attract increased interest. This is partly owing to the undeniable advantages of BCH, such as its swifter transaction speeds and lower associated costs.

Nevertheless, Bitcoin Cash faces competition from similar ventures, with Litecoin being a notable contender often closely ranked in terms of market capitalization. Despite their proximity in market standing, Litecoin distinguishes itself through unique attributes, each carrying its own set of advantages and disadvantages. The choice between these platforms ultimately hinges on meeting the specific needs of individual users and delivering features that resonate more strongly with the general public.


Is Bitcoin Cash still Available?

Yes, Bitcoin Cash is still available in the crypto market and still has the potential could become one of the best cryptocurrencies in the market today.

Why is Bitcoin Cash Cheaper than Bitcoin?

Bitcoin Cash is more scalable than Bitcoin, so it is easier to adopt and cheaper.

How to buy Bitcoin Cash?

To buy Bitcoin Cash, you can visit a reputable crypto exchange, create an account, deposit money, and then place an order to buy BCH in the trading section of the exchange.


Despite being a relatively new player in the cryptocurrency market, Bitcoin Cash has already made a significant impact. It has a growing user base, and many companies are starting to accept it as a form of payment. As the cryptocurrency ecosystem continues to evolve, Bitcoin Cash is poised to play a significant role in shaping the future of digital currencies.

We hope that this article has answered your question What is Bitcoin Cash? If you want to read good and useful content like this, come to CoinMinutes to discover more.

Table of Contents

Share This Article:

Chi Do
Chi Do
Chi Do is a content writer at CoinMinutes, responsible for creating most of the content on the website, including news related to Bitcoin (BTC), Ethereum (ETH), Blockchain, Decentralized Finance (DeFi), and more. With a keen interest in cryptocurrencies since the 2020s, Chi has acquired extensive experience and knowledge in this field. Chi holds a Bachelor's degree in communication from Academy of Journalism and Communication in Vietnam.

Related Post