Meet another cousin of Bitcoin: Bitcoin Cash (BCH), a cryptocurrency created in August 2017 from a fork of Bitcoin.
So, you want to know how to buy BCH? Well, we’ve got everything you need to get started on your crypto journey.
Bitcoin Cash was designed to accommodate a larger block size than Bitcoin, thus surpassing the transaction speed of the original Bitcoin. The ecosystem’s mission statement has attracted investors from around the world.
History of Bitcoin Cash
As Bitcoin’s popularity increased, scalability issues also became an issue. To avoid such a situation, the size of a block on Bitcoin’s blockchain was limited to 1MB, resulting in less reliable transactions and higher fees.
The developers came up with two solutions to solve the problem:
To increase the average block size, resulting in more transactions per block
To maintain 1MB block sizes and work on off-chain settlement layers, excluding parts of a transaction to bring more data into the blockchain.
This resulted in a hard fork of the Bitcoin blockchain to increase the block size. The new chain had 8MB blocks and was called Bitcoin Cash. The other part of the fork has become Bitcoin Core. This deviates from the original concept of Bitcoin due to the slowness of transactions.
Bitcoin Cash was designed by an economic minority, led by Haipo Yang of ViaBTC at block height 478559. A new chain, with a rule change permanently incompatible with the original Bitcoin network, has been created. And a new crypto asset was founded.
Each Bitcoin holder received an equivalent amount of Bitcoin Cash, thus multiplying the number of existing coins. Initially, BCH had an impressive price tag of $ 900. However, Coinbase, a major cryptocurrency exchange, boycotted Bitcoin Cash and did not list it on its exchanges.
In contrast, it received vital support from Bitmain, the world’s largest cryptocurrency mining platform. At the height of the cryptocurrency craze, the price of Bitcoin Cash skyrocketed to $ 4,091 in December 2017.
How can you claim Bitcoin Cash
You could claim your Bitcoin Cash if you held Bitcoin in your wallet before August 1, 2017, when the Bitcoin Cash hard fork occurred. UTC should have an equivalent amount of BCH assigned to their Bitcoin private keys.
There are different ways to claim your BCH tokens, with the methods varying depending on the type of crypto wallet used. For example, you can use your existing hardware wallet, where you hold BTC. Otherwise, you are using a full node wallet, like Bitcoin Core or Bitcoin Knots.
These wallets store your private keys in a dedicated folder on your computer. You can make a backup of this folder using your wallet menu and select: “Backup wallet”. Once you’ve done that, you should be able to import this backup into a full Bitcoin Cash node, like Bitcoin ABC.
Bitcoin Cash: Main functionalities of the blockchain
As previously stated, Bitcoin Cash is a hard fork of the original Bitcoin. However, several features distinguish it from its predecessor:
Block size
Compared to Bitcoin, which allowed a maximum block size of 1MB, Bitcoin Cash has a higher limit of 8MB per block.
Volume of transactions
BCH can process around two million transactions every day.
Scalability
Bitcoin cash has its own blockchain and has a block size of 8MB. (BCH) has improved scalability by allowing more transactions to be processed.
Block processing time
Bitcoin has an average block processing time of 10 minutes. With BCH, on the other hand, the speeds are adjusted automatically and appropriately.
Bitcoin Cash vs. Bitcoin
While the fundamental technologies for both are the same, their underlying philosophies differ significantly.
BCH has its own blockchain and specifications, including an important distinction from Bitcoin. Bitcoin Cash’s maximum block size is 32MB as opposed to Bitcoin, which is 1MB. This makes the cryptocurrency more scalable and allows it to execute more transactions per second.
Another difference is that compared to Bitcoin, Bitcoin Cash adopts a different hashing algorithm which rules out the possibility of any replay between the two blockchains. The algorithm has a safe replay and erase mechanism in place to prepare for the possibility of a BCH split in the future.
Although Bitcoin does not support smart contracts, BCH has started using smart contract languages like Cashscript to enable more complex functions.
To issue tokens via the Bitcoin blockchain, projects must use the Omni layer, while in the case of Bitcoin Cash, the Simple Ledger (SLP) protocol is adopted. The protocol allows developers to issue tokens through BTC, much like tokens are issued on the Ethereum blockchain. SLP also supports non-fungible tokens (NFTs), which can be differentiated from each other.
Fee Replacement (RBF) is a feature of the Bitcoin network that allows unconfirmed transactions to be canceled or doubled. The removal of this functionality by the BCH protocol allows the cryptocurrency to become more secure, as unconfirmed transactions are irreversible.
The use and popularity of Bitcoin continues to grow at a constant rate. Bitcoin supporters place more importance on decentralization and resistance to censorship than higher transaction throughput.
Bitcoin Cash as a peer-to-peer electronic currency is a preferable option for low transaction fees and faster speeds.
Exchanges on which to buy Bitcoin Cash
Bitcoin Cash is not listed on most major crypto exchanges, although it is one of the largest cryptos in terms of market volume.
Only Kraken, Cex.io, and GDAX allow traders and investors to purchase Bitcoin Cash using fiat currencies.
On exchanges like Bittrex, you can only trade Bitcoin Cash using cryptos like Bitcoin and Tether. If you want to know the actual trading pairs supported by an exchange platform, you can always visit the FAQ or About section of the website.
Most crypto exchanges require extensive and sometimes cumbersome registration processes before you are allowed to start trading coins. You may need to link your bank account to the exchange to withdraw or deposit funds. Sometimes the verification process and the whole process take several days.
For security reasons, most of the exchanges around the world only allow withdrawals and deposits by wire transfer, which are usually slow, often taking up to a week. Other platforms allow the use of a credit or debit card as a payment option. In rare circumstances, PayPal is allowed.
Transaction processing fees vary from platform to platform.
How to buy Bitcoin Cash through peer-to-peer trading
Peer-to-peer (P2P) involves the direct buying and selling of cryptocurrencies with another person. Its main advantages include lower transaction costs and faster settlements.
LocalBitcoinCash is a great platform for peer-to-peer trading. You can place your order and wait for another user to respond to your request. BCH can be traded here using fiat currencies, with the platform holding funds in escrow until both parties qualify.
While this method is widely regarded as the safest and fastest way to buy BCH tokens, there have been cases where scammers have exploited the chargeback (payment dispute) feature to falsely claim the amount. transferred from the platform. Therefore, both parties should verify the amounts, as well as the wallet addresses and the actual exchange rate.
Finally, you can choose to have a real meeting and chat the old fashioned way.
You can also contribute to the ecosystem by mining BCH tokens, which involves confirming and legitimizing transactions on the blockchain.
How to buy Bitcoin Cash
You are now ready to buy BCH. Scroll down for our step-by-step guide on how to start investing today.
- Open an account online. If you don’t have a cryptocurrency exchange account yet, you will need to open one to purchase Bitcoin Cash. As an investor in digital assets, you should choose an exchange with top-notch security.
- Purchase a hardware wallet (optional). While you don’t need a cryptocurrency wallet to buy Bitcoin Cash, it’s a good idea to use a crypto wallet for added security. Software wallets are free, but hardware wallets offer the best security by storing your digital assets offline and preventing your funds from being stolen by online hackers. Wallets like TREZOR and Ledger both support BCH and come with additional features to help you automatically claim Bitcoin under the terms of the BCH hard fork. Software wallets like Exodus have great UX. Others, like Edge, are available on Android and iOS and support various cryptos.
- Make your purchase. To buy BCH, simply place a market or limit order on the exchange of your choice. Market orders will buy your BCH immediately at the market price, while limit orders will allow you to buy BCH at a specified price or below, giving you control over how much you pay.
How to buy Bitcoin Cash on CoinStats
CoinStats helps investors identify coin trends globally and make better crypto trading decisions.
To buy Bitcoin Cash on CoinStats, all you need to do is create an account on the platform and start trading. You can also check out our guide information on how to buy Bitcoin.
Conclusion
Bitcoin Cash remains in the shadow of its more successful twin, Bitcoin. It is second behind Bitcoin in terms of use and financial value. Nonetheless, Bitcoin Cash did manage to be the first major hard fork in the blockchain industry.
Additionally, BCH’s focus on scalability means that it will continue to gain popularity in the future.
