The Becoming of Bitcoin Cash

Posted on October 15, 2019

By Natalie Lord

First there was Bitcoin, then there was Bitcoin Cash. Bitcoin Cash being a fork of Bitcoin.

Bitcoin was invented in 2008 by an unknown person using the name Satoshi Nakamoto. Over the years there has been much speculation as to who Satoshi Nakamoto is, but so far no one has been able to identify the face of Bitcoin.

Bitcoin is a decentralized digital currency. It operates without a sole administrator or a central bank and can be sent from user to user through the Bitcoin network without the need for any intermediaries. Bitcoin transactions are verified by network nodes that use cryptography and are recorded in a public distributed ledger known as a blockchain.

Bitcoin Cash was created in 2017 and a year later, in 2018, it split into two cryptocurrencies: Bitcoin Cash and Bitcoin SV. Bitcoin Cash can also sometimes be referred to as Bcash.

Initially the move to create a fork was due to demand in the crypto community for a hard fork to increase blocksize because of rising fees on the Bitcoin network. The debate reached fever pitch in July 2017 with Bitcoin investors expressing concern that adopting BIP 91 without increasing the block-size limit favoured those investors who wanted to use Bitcoin as a digital investment rather than as a transactional currency. The demand to increase block size was met with resistance, with those in opposition proposing alternative plans for a split. The proposition included a plan to increase the number of transactions its ledger could process by increasing the block-size limit to eight megabytes. This is how Bitcoin Cash came to be. On August 1 2017, Bitcoin Cash started trading at around US$240. Bitcoin, meanwhile, was trading at about US$2,700.

Just over a year later, a hard-fork chain split of Bitcoin Cash took place between two rival factions: Bitcoin Cash and Bitcoin SV. Bitcoin Cash ABC was trading at approximately US$289, while Bitcoin SV was around the US$96.50 mark, down from US$425.01 in 14 November for the un-split Bitcoin Cash.

The split came about because of a “war” between two competing Bitcoin Cash camps. The first was supported by Jihan Wu of Bitmain and entrepreneur Roger Ver who were promoting the software Bitcoin ABC (Adjustable Blocksize Cap) which would maintain the block size at 32MB. The second camp was led by billionaire Calvin Ayre and Craig Steven Wright. They came up with an alternative software version Bitcoin SV (Bitcoin Satoshi’s Vision) which would increase block size to 128MB.

In simple terms there are two factions of Bitcoin supporters. Those that support large blocks and those that support small blocks. Bitcoin Cash supporters favour the use of the currency as a vehicle of exchange for commerce, while the other team see Bitcoin’s primary purpose to be as a store of value.

By November 2017, the value of Bitcoin Cash, had fallen to about US$300 from US$900, due in principal to investors who had originally held Bitcoin selling off the Bitcoin Cash they received in the hard fork. On December 20 2017, it reached a high of US$4355.62 before falling 88% to US$519.12 on August 23 2018.

Bitcoin Cash trades on various digital currency exchanges including Coinbase, Kraken, Gemini, Bitstamp, Bitfinex, ShapeShift and Kryptos-X. As of mid-2018 daily transaction numbers for Bitcoin Cash are about one-tenth of those of Bitcoin. Bitcoin Cash payments are supported by a number of payment service providers including GoCoin, Coinify and BitPay.

 

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Kryptos-X is a proud member of

ACCESS

Singapore Cryptocurrency and Blockchain Industry Association

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