What is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency created in 2017 through a hard fork of Bitcoin. A hard fork is a change to a blockchain's rules that older software does not accept, so the chain splits in two. Everyone who held bitcoin at the moment of the split also received the same amount of BCH.
There was no single founder. The fork came out of a long debate in the Bitcoin community about block size, backed by a group of developers, miners and businesses.
How does it work?
Bitcoin Cash works much like Bitcoin. Miners use computers to solve puzzles in a process called proof of work, using the same SHA-256 algorithm as Bitcoin, and the winner adds the next block of transactions and earns new coins.
The main difference is block size. A block is a batch of transactions, and Bitcoin Cash allows much bigger blocks than Bitcoin, so more payments fit into each one. Supporters see this as the way to keep on-chain payments cheap. Critics argue that larger blocks make it more costly to run a full copy of the network, which can reduce decentralization. In 2018, a further disagreement split Bitcoin Cash again, creating a separate coin called Bitcoin SV.
What is it used for?
Bitcoin Cash is mainly positioned as digital cash for day-to-day spending.
- Peer-to-peer payments between individuals
- Payments to merchants that accept it
- Holding as a store of value, like other cryptocurrencies
Key facts
- Launched: 2017, as a hard fork of Bitcoin
- Creator: no single founder; emerged from a community split over block size
- Consensus: proof of work (SHA-256)
- Native blockchain: Bitcoin Cash
- Supply: capped at 21 million BCH
Explainer written by Finvane from official project documentation. It is not investment advice.