Did you know that Bitcoin is not the only Bitcoin around?
One of these other Bitcoins, is Bitcoin Cash (BCH), which currently ranks as the fifth-largest cryptocurrency boasting a total market cap of $4.1bn USD.
But how did Bitcoin Cash come to be, what problems does it solve, and how has the BCH price performed in the past?
What Is Bitcoin Cash (BCH) and What Should I Know About its History?
Bitcoin Cash (BCH) is an altcoin and a fork of the Bitcoin (BTC) blockchain.
Bitcoin, the world’s first and most popular cryptocurrency, provides multiple use-cases for the crypto industry. However, the coin has been struggling with scalability issues for a very long time. BCH emerged in the context of the Bitcoin scalability issue.
While Bitcoin works normally under regular use, BTC’s limited scaling capabilities can lead to network congestion quite easily.
As a result of a network congestion, both transaction fees and confirmation times increase exponentially.
This happened with the cryptocurrency before, ultimately leading to the Bitcoin scalability debate and the birth of Bitcoin Cash.
As transaction fees and processing times were rising, the Bitcoin community split into two groups supporting different solutions to scale the BTC network.
The first group proposed scaling the BTC blockchain with a solution called Segregated Witness (SegWit) to decrease network load with more efficient data storage methods for transactions.
With SegWit, the group’s developers also wanted to prepare the Bitcoin blockchain for the future implementation of the Lightning Network, a Layer 2 scaling solution on top of the main blockchain featuring fast and low-cost off-chain payments.
However, the second group opposed the idea and proposed to improve Bitcoin’s scalability on the chain by increasing the network’s 1 MB block size limit that restricts the maximum number of transactions to be processed in a block.
Eventually, the first group came out as the winner of the overheated debate and initiated the implementation of SegWit.
However, the debate did split not only the community but also the Bitcoin blockchain.
While SegWit’s supporters stayed with the Bitcoin blockchain we know today, the other group initiated a hard fork – a major network upgrade that is not compatible with previous versions – to create Bitcoin Cash, which went live on August 1, 2017.
Interestingly, there was also a split in the Bitcoin Cash community over a disagreement between developers, which led to the birth of Bitcoin SV (BSV) in November 2018.
What Problems Does Bitcoin Cash Solve?
As its name suggests, the supporters of Bitcoin Cash seek to encourage the cryptocurrency’s use for everyday payments in contrast to holding the coin as a store of value or object of speculation.
After the hard fork and its birth in August 2017, Bitcoin Cash developers increased the network’s block size limit initially to 8 MB, then later to 32 MB.
With a 32-fold increase in the block size, we can safely say that BCH developers have provided an (at least a temporary) solution to the Bitcoin scalability issue.
What Should I Know About the Bitcoin Cash Price?
Let’s take a look at how BCH has been performing in terms of price.
After some minor downtrends, Bitcoin Cash’s price surged quickly from $304 to $3,780 between August 13 and December 21, 2017.
Despite the over 1,100% growth, 2018’s crypto bear market has driven the cryptocurrency’s price down to $1,025 by February 5, 2018.
Following another drop to $614 by April 6, BCH entered into a short-term bull run where the coin’s price increased to as high as $1,670.
However, following the bull run’s peak on May 10, Bitcoin Cash’s value started to fall, continuing to downtrend until December 15.
Between late December 2018 and late June 2019, BCH increased its price from $76 to $510 but it fell again, ending the year at the value of $208.
While BCH showed performed well in early 2020, after increasing its price to $490 by February 14, the cryptocurrency’s value fell to $176 by March 13, possibly as a result of the coronavirus-fueled general market crash.
Since then, Bitcoin Cash has been gradually recovering its losses, trading at $222 at the time of writing this article.
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