Bitcoin Cash: Everything to Know

By  Beluga Research August 2, 2023

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  • Bitcoin Cash (BCH) is a peer-to-peer electronic cash system, created as a fork of Bitcoin, aiming to provide faster, cheaper, and more scalable transactions
  • It was designed to address scalability issues of Bitcoin by increasing the block size to 8 MB, allowing for more transactions per block and faster processing times
  • Bitcoin Cash aims to be a peer-to-peer electronic cash system, emphasizing low fees and quick transactions
  • Despite its similarities to Bitcoin, it has a distinct blockchain architecture, with its own community and development teams


Bitcoin Cash (BCH) shares many similarities with its predecessor, Bitcoin (BTC). It is a decentralized digital currency that operates on a peer-to-peer network, allowing users to send and receive funds directly without the need for intermediaries like banks. Both Bitcoin and Bitcoin Cash utilize blockchain technology, which serves as a public ledger that records all transactions in a transparent and immutable manner.

The key distinction between Bitcoin Cash and Bitcoin lies in their approach to scalability. Bitcoin Cash increased the block size limit from 1MB to 8MB, enabling it to process a greater number of transactions per block. This larger block size allows for faster and cheaper transactions compared to Bitcoin, which has faced congestion and high fees during peak usage periods.

A Brief History

Bitcoin Cash traces its roots back to the scalability debate within the Bitcoin community. As Bitcoin gained popularity, the number of transactions being processed on the network increased. This led to congestion and slower transaction confirmation times. Some members of the community believed that increasing the block size limit could alleviate these issues.

The debate reached a tipping point in August 2017 when a group of developers and miners initiated a hard fork, creating Bitcoin Cash as an alternative version of Bitcoin. The hard fork resulted in a divergence of the blockchain, with Bitcoin Cash becoming a separate cryptocurrency with its own set of rules and network.

Bitcoin Cash: Everything to Know

  • Block Size Increase. Bitcoin Cash implemented an increased block size limit of 8MB, allowing for more transactions to be included in each block. This larger block size enables faster transaction confirmation times and lower fees compared to Bitcoin. It aims to provide a better user experience for everyday transactions.
  • On-Chain Scaling. Bitcoin Cash emphasizes on-chain scaling as a solution to scalability challenges. By increasing the block size, more transactions can be processed within a single block, reducing congestion and potential delays. This approach differs from Bitcoin's Lightning Network, which aims to address scalability through off-chain solutions.
  • Transaction Fees. Bitcoin Cash generally boasts lower transaction fees compared to Bitcoin. The larger block size allows for more transactions to be included in each block, spreading the fees across a greater number of transactions. This makes Bitcoin Cash an attractive option for those seeking to transfer funds quickly and economically.
  • Adoption and Community. Bitcoin Cash has garnered a significant following since its inception. It has gained support from various crypto exchanges, wallets, and payment processors, contributing to its overall adoption and utility. The community surrounding Bitcoin Cash actively advocates for its use as a digital currency for everyday transactions.
  • Potential Challenges. While Bitcoin Cash offers several advantages, it also faces challenges. One of the main criticisms is that the increased block size may make it more difficult for individual users to run full nodes, potentially leading to increased centralization. Additionally, the contentious nature of the hard fork and ongoing debates within the community can sometimes create uncertainty and volatility.

Getting Started

To get started with Bitcoin Cash, a digital wallet is needed. There are various types of wallets available, including desktop wallets, mobile wallets, web wallets, and hardware wallets. Each type has its own advantages and considerations in terms of security and convenience. It is important to choose a wallet that suits specific needs and take necessary precautions to protect funds.

Once a wallet is set up, bitcoin cash can be acquired through several methods. One way is to purchase it on a cryptocurrency exchange. There are numerous exchanges that support Bitcoin Cash, and you can buy it using other cryptocurrencies or traditional fiat currencies. It is important to choose a reputable exchange with good liquidity and security measures in place.

Another way to acquire bitcoin cash is by accepting it as payment for goods or services. As an increasing number of merchants and businesses start accepting cryptocurrencies, including bitcoin cash, wallets can receive payments directly.

Unique Aspects

Bitcoin Cash differentiates itself from Bitcoin through several unique aspects. One of the key differences is the block size limit. While Bitcoin has a block size limit of 1MB, Bitcoin Cash increased this limit to 8MB. This change allows for a higher number of transactions to be processed per block, resulting in faster transaction confirmations and lower fees. The larger block size also enables Bitcoin Cash to handle a higher volume of transactions, making it more scalable for everyday use.

Another notable aspect of Bitcoin Cash is its approach to mining. Bitcoin Cash utilizes the same mining algorithm as Bitcoin, known as proof-of-work (PoW), which involves miners solving complex mathematical puzzles to validate transactions and add new blocks to the blockchain. However, Bitcoin Cash has implemented an adjustable mining difficulty feature that allows the network to quickly adjust the difficulty level based on the total computational power of the network. This ensures that blocks are mined at a consistent rate, even if there are fluctuations in the number of miners.

Bitcoin Cash also emphasizes the importance of on-chain scaling. This means that the majority of transactions and smart contracts are executed directly on the blockchain, rather than relying on off-chain solutions like the Lightning Network, which is used by Bitcoin. By prioritizing on-chain scaling, Bitcoin Cash aims to maintain the decentralized nature of the network and provide a reliable and efficient payment system.


  • Increased Block Size. Bitcoin Cash has a larger block size limit compared to Bitcoin. This means that more transactions can be included in each block, allowing for faster and more efficient processing of transactions.
  • Lower Transaction Fees. With the larger block size, Bitcoin Cash can accommodate a higher volume of transactions, resulting in lower fees compared to Bitcoin. This makes it more cost-effective for users who frequently engage in cryptocurrency transactions.
  • Faster Confirmation Times. The increased block size also contributes to faster confirmation times for bitcoin cash transactions. As more transactions can be processed in each block, users can experience quicker confirmation of their transactions, leading to improved usability for everyday transactions.
  • Decentralized Development. Bitcoin Cash follows a decentralized development model, where decisions regarding protocol upgrades and improvements are made through community consensus. This ensures that no single entity has control over the development process, promoting a more democratic and inclusive approach.
  • On-Chain Scalability. Bitcoin Cash aims to address the scalability challenge faced by Bitcoin by prioritizing on-chain scaling. By increasing the block size, it can handle a larger number of transactions, allowing for greater scalability without relying heavily on off-chain solutions.
  • Enhanced Privacy. Bitcoin Cash offers improved privacy features compared to its predecessor. It incorporates the use of Schnorr signatures, which enable multiple parties to collaborate on a single signature, making it difficult to identify individual participants in a transaction.


  • Centralization Concerns. Some critics argue that Bitcoin Cash is more centralized compared to Bitcoin due to the concentration of mining power among a few large mining pools. This concentration of power raises concerns about potential manipulation and control over the network.
  • Security Risks. As a result of the larger block size, the blockchain of Bitcoin Cash is more susceptible to potential security risks. A larger block size requires more storage space and computational power, which could make the network more vulnerable to attacks.
  • Fragmented Community. The hard fork that led to the creation of Bitcoin Cash resulted in a division within the Bitcoin community. This division has led to a fragmented ecosystem, with supporters and developers of each cryptocurrency often at odds with one another. This fragmentation can hinder collaboration and slow down the progress of both Bitcoin and Bitcoin Cash.
  • Adoption Challenges. Bitcoin Cash faces challenges in terms of wider adoption and acceptance. While it has gained some traction, Bitcoin remains the dominant cryptocurrency in terms of recognition and acceptance by merchants and businesses. This can limit the use cases and utility of Bitcoin Cash as a medium of exchange.
  • Limited Development Resources. Compared to Bitcoin, Bitcoin Cash has a smaller developer community and fewer resources dedicated to its development. This can impact the speed of innovation and the ability to implement new features and improvements.