“The issue of scalability has haunted Bitcoin for long and ignited the zeal among the Bitcoin miners and the Bitcoin Community to increase the Bitcoin Block size so that faster and cheaper transactions can be executed. The resultant of this problem solving zeal was the 2017’s hard fork of Bitcoin that created Bitcoin Cash with a 32MB block size when compared to 1 Mb block size of Bitcoin.”
Bitcoin has been in the mainstream media lately and the amount of global adoption it has seen is simply immense. Since its inception in 2009, Bitcoin has grown to become a store of value similar to gold and its demand is rising at a very extensive rate. With the increase in demand increased the number of users that use Bitcoin for transactions and with it came the issue of scalability. Let’s dive deep into the scalability issue of Bitcoin to understand why there emerged a need for Bitcoin Cash and what is Bitcoin Cash?
The Scalability Issue of Bitcoin
At its time of inception, each Bitcoin block had 1MB space reserved for transactions to take place, but with the increase in the use of Bitcoin, the number of transactions increased, resulting in more blocks to be used for transactions that further resulted in transaction delays. The increased adoption of Bitcoin further escalated this problem and thus, the issue of scalability became the pain point in the journey of Bitcoin.
What is Bitcoin Cash (BCH)
Bitcoin Cash is a cryptocurrency that is the result of the hard fork (divergence of a blockchain into a new branch of blockchain in which previous rules and structures become invalid and new rules and structures are deployed) of Bitcoin which occurred in 2017. BCH is quite similar to Bitcoin as it uses the same consensus mechanism i.e. PoW (Proof of Work) and has a limited supply of 21 Million each.
The Need for Bitcoin Cash
The hard fork of Bitcoin in 2017 resulted in increasing the block size to 32 MB per block that ensured the fast transactions and in reducing the transaction delays. This improved the number of transactions per unit time, thus solving the problem of scalability. This also reduced the transaction fees by a considerable amount. Thus, BCH can be considered an advanced version of Bitcoin with fundamental similarities.
Future of Bitcoin Cash
Bitcoin Cash is considered equivalent to digital cash as Bitcoin is considered to be digital gold. Bitcoin Cash gave a 10x return to its investors in a very short period between August and December, 2017 after its inception. This increased its trading volume and provided a solid ground for growth. At the time of writing BCH has a market cap of over $10 Billion and is placed at 22nd rank as per market capitalization. It can be considered that the future of Bitcoin Cash is quite bright and with more adoption more trading volume will be acquired.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investmenting.
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