Bitcoin Cash

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Bitcoin Cash
Bitcoin Cash.png
Ticker symbolBCH [lower-alpha 1]
CoinsUnspent outputs of transactions (any multiple of satoshi)
Implementation(s)BitcoinABC, Bitcoin Unlimited, Bitcoin XT[1]
Forked frombitcoin
Genesis blockJanuary 3, 2009 (12 years ago) (2009-01-03)
Block #1January 9, 2009 (12 years ago) (2009-01-09)
First block after split (block #478559)August 1, 2017 (3 years ago) (2017-08-01)
Timestamping schemeProof-of-work (partial hash inversion)
Hash functionSHA-256
Issuancedecentralized, block reward
Block reward12.5 BCH[lower-alpha 2]
Block time10 minutes
Supply limit21,000,000 BCH
Market cap40,717,301,164 USD (as of January 2018)
  1. The code "BCC" is also used on several exchanges.
  2. from July 2016 to approximately June 2020, halved approximately every four years

Bitcoin Cash (BCH) is a hard fork of the cryptocurrency bitcoin. The bitcoin scalability debate led to the hard fork on August 1, 2017, which resulted in the creation of a new blockchain.[2][3] The stated goal of the fork was to increase the number of transactions its ledger can process by increasing the block size limit to eight megabytes.[4][5]

History[edit | edit source]

Idea forms[edit | edit source]

On July 20, 2017 Bitcoin Improvement Proposal (BIP) 91, aka Segregated Witness, activated.[6][7][8]

Some members of the bitcoin community felt that adopting BIP 91 without increasing the block-size limit favored people who wanted to treat bitcoin as a digital investment rather than as a transactional currency.[9][10]

The plan to do a hard fork was first announced by Bitmain. The project was originally referred to as UAHF: A contingency plan against UASF (BIP148) by Bitmain on their corporate blog, which the ASIC bitcoin mining hardware manufacturer would launch if BIP 148 (a User Activated Soft Fork) succeeded.[11] Subsequently, developers took interest in the project.[12] The Bitcoin Cash name was originally proposed by Chinese mining pool ViaBTC.[12][13]

Development[edit | edit source]

The first implementation of the Bitcoin Cash protocol called Bitcoin ABC was revealed by Amaury "Deadal Nix" Séchet at the Future of Bitcoin conference in Arnhem, Netherlands.[12] The Bitcoin Cash hard fork was announced to take place on August 1, 2017.

Launch[edit | edit source]

Upon launch, Bitcoin Cash inherited the transaction history of the bitcoin cryptocurrency on that date, but all later transactions were separate. Block 478558 was the last common block and thus the first Bitcoin Cash block was 478559.[14] Bitcoin Cash cryptocurrency wallet started to reject BTC block and BTC transactions since 13:20 UTC, August 1, 2017 because it used a timer to initiate a fork. It implements a block size increase to 8 MB. One exchange started Bitcoin Cash futures trading at 0.5 BTC on July 23; the futures dropped to 0.1 BTC by July 30. Market cap appeared since 23:15 UTC, August 1, 2017.[10][15]

Move of hashpower and change to difficulty[edit | edit source]

On August 9, 2017 it was 30% more profitable to mine on the original chain.[16] As both chains use the same proof-of-work algorithm, miners can easily move their hashpower between the two. As of August 30, 2017 around 1,500 more blocks were mined on the Bitcoin Cash chain than on the original one[17] as the high profitability periods[18] attracted a significant proportion of total processing power.[19] Due to the new Emergency Difficulty Adjustment (EDA) algorithm used by Bitcoin Cash,[20] mining difficulty has fluctuated rapidly, and the most profitable chain to mine has thus switched repeatedly between Bitcoin Cash and mainline bitcoin.

A fix for these difficulty, hashrate and profitability fluctuations was introduced on November 13, 2017 2:06PM UTC.[21] The EDA algorithm has been replaced with a new difficulty adjustment algorithm (DAA) that hopes to prevent extreme fluctuations in difficulty while still allowing Bitcoin Cash to adapt to hashrate changes faster than mainline bitcoin.

Market acceptance and naming[edit | edit source]

Cryptocurrency exchanges[edit | edit source]

Eventually Bitcoin Cash was broadly adopted by digital currency exchanges. Exchanges such as Coinbase,[22] Bitfinex,[23] Bitstamp,[24] CEX.IO,[25] Kraken,[26] ShapeShift[13] and many others use the Bitcoin Cash name and the BCH ticker symbol for the cryptocurrency.

Binance,[27] and Huobi exchange[28] use BCC as Bitcoin Cash's ticker symbol instead.

Cryptocurrency wallets[edit | edit source]

While the alphanumeric address style is the same as mainline bitcoin (BTC), Bitcoin Cash (BCH) should not be sent to a bitcoin (BTC) address. Like mainline bitcoin, Bitcoin Cash addresses can be used more than once, but should not be reused if privacy is a concern. However, there are plans to change the address format.[29]

Cryptocurrency wallets such as the Ledger hardware wallet,[30] KeepKey hardware wallet,[31] Electron Cash software wallet,[32] software wallet[33] and many others use the name Bitcoin Cash for the cryptocurrency, using either BCH or BCC ticker symbol for it.

Trezor hardware wallet supports Bitcoin Cash.[34]

Supporters[edit | edit source]

Notable supporters of Bitcoin Cash (both the idea of increasing the block size and the split of the cryptocurrency) include investor Roger Ver[9] and entrepreneur Calvin Ayre.[35]

Tax implications[edit | edit source]

Americans wondering whether their acquisition of Bitcoin Cash is taxable as income, or not taxable as a division of property, have received no guidance from the Internal Revenue Service.[36]

See also[edit | edit source]

References[edit | edit source]

  1. Hertig, Alyssa (August 1, 2017). "Bitcoin Cash: Who Supports the Fork And Who Doesn't". CoinDesk. Retrieved January 22, 2018. 
  2. Tepper, Fitz (2 August 2017). "WTF is bitcoin cash and is it worth anything?". TechCrunch. 
  3. Smith, Jake. "The Bitcoin Cash Hard Fork Will Show Us Which Coin Is Best". Fortune. Retrieved 21 December 2017. 
  4. Nakamura, Yuri; Kharif, Olga (4 December 2017). "Battle for ‘True’ Bitcoin Is Just Getting Started". Bloomberg Businessweek. Retrieved 19 December 2017. 
  5. Nguyen, Jimmy. "All Merchants Want For Christmas Should Be Bitcoin Cash". Huffington Post. Retrieved 24 December 2017. 
  6. Crosbie, Jack (July 26, 2017). "When Will Bitcoin Fork, and What's It Mean for Crypto's Future? A fork could change the equation for thousands of bitcoin users.". Inverse. Retrieved July 29, 2017. 
  7. Aaron van Wirdum (July 20, 2017). "BIP 91 Has Locked In. Here’s What That Means (and What It Does Not)". Bitcoin Magazine. Retrieved July 29, 2017. 
  8. Hertig, Alyssa (July 21, 2017). "BIP 91 Locks In: What This Means for Bitcoin and Why It's Not Scaled Yet". CoinDesk. Retrieved July 29, 2017. 
  9. 9.0 9.1 Popper, Nathaniel (2017-07-25). "Some Bitcoin Backers Are Defecting to Create a Rival Currency" (in en-US). The New York Times. ISSN 0362-4331. 
  10. 10.0 10.1 Wong, Joon Ian. "There’s a strange new twist in bitcoin’s "civil war"—and a way to bet on the outcome" (in en-US). Quartz. 
  11. admin (14 June 2017). "UAHF: A contingency plan against UASF (BIP148)". Bitmain Corporate Blog. 
  12. 12.0 12.1 12.2 van Wirdum, Aaron (27 July 2017). "The Future of "Bitcoin Cash:" An Interview with Bitcoin ABC lead developer Amaury Séchet". Bitcoin Magazine. 
  13. 13.0 13.1 van Wirdum, Aaron (7 August 2017). "Bitcoin Cash or Bcash: What's in a Name?". BitcoinMagazine. 
  14. "Fork Watch: Block 478558 Initiates 'Bitcoin Cash' Split – First Blocks Now Mined - Bitcoin News". 1 August 2017. 
  15. "Bitcoin Cash (BCH) price, charts, market cap, and other metrics - CoinMarketCap". 
  16. "Coin Dance - Bitcoin Cash Block Details". 8 August 2017. Archived from the original on 8 August 2017. 
  17. "". 
  18. "". 
  19. "". 
  20. "Technical specifications". 12 November 2017 – via GitHub. 
  21. "Bitcoin ABC - Home". Bitcoin ABC - Home. 
  22. "Coinbase - Buy/Sell Digital Currency". Retrieved 2017-12-20. 
  23. "Bitfinex". Retrieved 18 December 2017. 
  24. "Bitstamp". Retrieved 18 December 2017. 
  25. "CEX.IO blog". 
  26. KrakenFX. "Bitcoin Cash and a Critical Alert for Bitcoin Margin Traders". Retrieved 27 July 2017. 
  27. "Cryptocurrency". Retrieved 14 January 2018. 
  28. "Statement about Huobi’s attitude to BTC and Bitcoin Cash". Retrieved 18 December 2017. 
  29. "". 
  30. "Cryptocurrencies". Retrieved 18 December 2017. 
  31. "Bitcoin Cash Update 8/29/17". Retrieved 18 December 2017. 
  32. "Electron Cash". Retrieved 18 December 2017. 
  33. "Get a Free Wallet". Retrieved 18 December 2017. 
  34. "Which coins are currently supported?". Retrieved 18 December 2017. 
  35. Suberg, William (18 October 2017). "Bitcoin Jesus, Calvin Ayre Media Say Bitcoin Cash Is The Only Blockchain". The Coin Telegraph. 
  36. Saunders, Laura (25 August 2017). "No One Knows How Much to Pay in Bitcoin Cash Taxes". The Wall Street Journal. Retrieved 25 August 2017. 

External links[edit | edit source]