Bitcoin Cash (BCC) came as a surprise just a few days before the SegWit upgrade was going to be initiated on August 1 – leaving everyone wondering what is Bitcoin Cash how is it different to the original Bitcoin.
Today, Bitcoin will most likely fork into two – Bitcoin as we know it and Bitcoin Cash which will become a new altcoin.
On one side of the war, there are core developers who want to keep the network size limited to protect against the hacks. On the other side, there are miners who want to increase the block size to make the network size faster.
Up until two weeks ago, it looked like miners reached an agreement and came up with a proposal known as SegWit2x, which would increase blocks’ size to 2MB. So it looked like everyone was on board with the plan.
Until the alternative plan came in – Bitcoin Cash.
What Is Bitcoin Cash
Bitcoin Cash is a continuation of Bitcoin which will give an increase of the blockchain ledger and will allow a further growth. It doesn’t mean they will both work in a partnership. BCC will become a separate cryptocoin, with its own protocol and price.
From the official website:
Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.
The definition sounds similar to the original explanation of Bitcoin that has been released back in 2008. So what is the main difference between BTC and BCC?
What Features Does Bitcoin Cash Have?
Bitcoin Cash offers three new features:
- It extends a block size to 8MB from 1MB.
- The transaction signature is slightly different and it will require the block size to be larger than 1MB.
- It speeds up the proof-of-work difficulty which will result in a quicker transaction time.
It’s a well-known issue that Bitcoin’s transaction time takes too long nowadays and it’s becoming even more expensive. Miners can charge extra for a quicker transaction time but the cost is becoming higher.
Not to mention the unaffordable mining fees which created an exclusive network of miners and contradicted the true, egalitarian, nature of Bitcoin and cryptocurrency in general.
What Do You Need To Know
According to Bitcoin Cash website if you own Bitcoins, you will automatically own Bitcoin Cash:
Because Bitcoin Cash is a fork of the ledger, that means you own the same amount of Bitcoin Cash as you did Bitcoin at the time of the forking block. However, if your Bitcoins are stored by a third party such as an exchange, then you must inquire with them about your cash.
What does it mean? That if you’re keeping Bitcoins on an exchange, they may or may not give you Bitcoin Cash.
Not all exchanges support Bitcoin Cash and some of them won’t offer it. So if you’re keeping your Bitcoins with a third party, you don’t have an access to your private key. Hence you’re handling the control of Bitcoins over to somebody else.
The same goes for a wallet – not all of them support Bitcoin Cash.
Another thing you have to think about it the transaction replay between and old and new blockchain. A replay attack is a valid data transmission that is maliciously or fraudulently repeated or delayed. That could happen if someone takes a transaction from one blockchain and repeats it on another one to steal funds.
Bitcoin Cash will handle it by using a new flag in the code, which is different to the original Bitcoin blockchain. Hence the transactions won’t be able to repeat.
Why Should You Care
Firstly, what is about to happen will change Bitcoin permanently. Regardless of the fork, Bitcoin will finally get the long-awaited update which will increase the blockchain capacity.
Secondly, the update will split the chain, which will result in a new altcoin – Bitcoin Cash.
Oddly enough, Bitcoin’s price hasn’t dropped in the last few days which only showed confidence in the up and coming upgrade. Bitcoin Cash futures are already trading at almost $300 and the fork will likely increase both of them.
If you’re in control of your private keys, meaning you don’t store Bitcoins on an exchange or online wallet, after the split you will own both – BTC and BCC and it will be up to you which one you decide to choose.
Keep in mind that BCC is an altcoin and won’t be as widely accepted as Bitcoin. Hence, you may struggle at first with buying or investing.
So far Bitcoin Cash is raising more questions than answers and we will have to wait until the network stabilises itself to be able to properly answer the question what is Bitcoin Cash and its implications.
What do you think about the network update? Do you have your own theory? Share your views with us in the comments below!