Burgeoning in size and scope, Bitcoin now has its own form of currency capital: Bitcoin Cash. The new digital currency, created after an intra-crypto-family squabble, seeks to put Bitcoin on the same economic turf as major traditional global currencies (like the dollar, yen and pound)
Does Bitcoin Cash have staying power? That’s likely so, even though Bitcoin Cash has had a short and volatile history, but is making up ground fast among digital currency users.
Bitcoin Cash History
Bitcoin Cash was spawned by Bitcoin, which originates from the cryptocurrency world.
It was originally introduced in 2009 by a blockchain group or individual (10 years later, nobody is entirely sure) named Satoshi Nakamoto. Around that time, the Nakamoto alias published a groundbreaking report on cryptocurrencies called the “Bitcoin Whitepaper.”
In laying out the framework for Bitcoin, the report introduced the cryptocurrency as “a purely peer-to-peer version of electronic cash, which would allow online payments to be sent directly from one party to another without going through a financial institution.”
By establishing a “virtual” currency that provides a fast, inexpensive form of digital payments in lieu of using a traditional form of currency commerce, like banks or credit unions, Bitcoin was making a big statement. In doing so, Satoshi Nakamoto was taking direct aim at the central governments around the globe that controlled the flow of cash to regular people.
Bitcoin was created to disrupt the financial industry’s currency model.
After growing slowly but steadily in its first several years, Bitcoin skyrocketed between August 2016 and August 2017. It soared from $572 per Bitcoin to more than $4,700 in that time frame. By the end of the year, Bitcoin accelerated upward to $13,800 before eventually cresting $19,000 each.
Bitcoin plummeted to around $5,000 in late 2018 and is around $8,000 today.
Even with the decline in value in 2018, Bitcoin has comprised 34% of all the globe’s cryptocurrencies since then.
One Bitcoin Cash = $456, as of the end of May 2019.
What Is Bitcoin Cash?
Bitcoin Cash is a variance of Bitcoin. It’s date of birth was some time in August 2017, when Bitcoin backers created the cash version to increase the speed of cryptocurrency transactions, but with lower fees than traditional banks.
Aside from fees, Bitcoin backers regularly complained about the cryptocurrency’s scalability issues, which they believed constrained the growth of Bitcoin just as the public was warming to the idea of using cryptocurrencies instead of cash as a form of payment.
The problem with Bitcoin’s scalability is that it wasn’t up to the task, size wise. In cryptocurrency technical terms, Bitcoin was limited in size to just one megabyte (i.e., a million bytes, or 1MB.)
Basically, when more and more individuals are trading in Bitcoins and triggering larger transaction sizes in the process, limiting Bitcoin’s size to a single MB held back the cryptocurrency’s growth. The transactions weren’t being completed fast enough – that was one of the primary goals when Bitcoin was introduced 10-years ago.
The resulting delays in transaction times and the lower number of transactions that actually cleared the Bitcoin network meant Bitcoin developers had to go in another direction – and that’s where Bitcoin entered the picture.
Here’s what happened and how Bitcoin Cash was set in motion.
The rising number of bitcoin community members (called “miners” by cryptocurrency enthusiasts) called for larger block sizes, but were rebuffed by bitcoin hardliners, who wanted the traditional block transaction sizes left largely in place.
In August 2017, the dissenting Bitcoin miners left to form their own cryptocurrency model, called Bitcoin Cash. The split was controversial among Bitcoin enthusiasts, but the so-called “hard forkers” (named so as the group “split off” from traditional Bitcoin) ultimately prevailed, as Bitcoin Cash began to thrive as a new currency.
Bitcoin Cash, once it was developed and put into commercial use (we’ll spare you the onerous technical details), boosted its blockchain size from 1MB to 8MB to now 32MB, making it more streamlined. This led to the creation of its own transactions market. It also has led to the creation of competing higher-block Bitcoin models, including one from the original developers of Bitcoin.
That “per block” upgrade gave Bitcoin Cash users the same transactional power that the leading credit card and online payment systems deliver, thus leveling the payments playing field and giving Bitcoin renewed viability.
Where Can Bitcoin Cash Be Used?
Merchants have been slow to accept Bitcoin Cash but the fledgling currency is now widely available on major cryptocurrency exchanges.
As more exchanges make room for Bitcoin Cash, crypto experts anticipate that the new currency will grow in usage among commercial enterprises. That day has not yet come, for now, as Bitcoin Cash is largely walled off from major consumer and business currency usage.
We say “largely” as industry figures show that as of May 2019, 945 online companies do accept Bitcoin Cash, according to AcceptBitcoin.Cash. Higher profile retailers like Dish Network (DISH – Get Report) , Overstock.com (OSTK – Get Report) and Newegg are accepting Bitcoin Cash to better handle customer cryptocurrency payments.
Given the fact there are hundreds of thousands of online merchants operating in the U.S., which it’s a number that’s expected to rise in the coming years, as Bitcoin Cash grows in acceptance.
How Can I Obtain Bitcoin Cash?
There are several effective ways to get your hands on Bitcoin Cash. Here are the “top of the list” ways to do so:
You Already Own Old Bitcoins
Prior to the Bitcoin miners’ hard-fork split from traditional Bitcoin in August 2017, you may have owned Bitcoins. That matters, as any Bitcoins owned prior to Aug. 1, 2017, are deemed as Bitcoin Cash, and can be claimed as such, as long as the Bitcoin wasn’t held on an exchange on that date.
Purchase Bitcoin Cash
There are a growing number of cryptocurrency exchanges where Bitcoin Cash is available, including Coinbase, Bitfinex and Kraken.
From Bitcoin Wallets
A growing number of Bitcoin wallets have made Bitcoin Cash available, including the traditional Bitcoin Wallet, Ledger and Trezor.
The Takeaway on Bitcoin Cash
The development of Bitcoin Cash has led to other efforts, including from Bitcoin itself, to increase the size of Bitcoin blocks and generate faster and less expensive transaction fees.
That’s a good sign and also a nod to Bitcoin Cash, which has forced the major cryptocurrencies to raise their game and give cryptocurrency users what they want – a Bitcoin currency that makes it easier and faster to move Bitcoin around. It also gives banks a run for their money – literally – at the same time.