By now, most people will have heard of the cryptocurrency Bitcoin. Unlike other currencies, the decentralised currency is not regulated by any central authority. However, it is not completely without regulation as only 21 million Bitcoin can be created in total. At the moment, there are 16 million Bitcoins in circulation. Recently, Bitcoin Cash has hit the headlines. This is because it is a new version of Bitcoin, which was established at the beginning of August. To understand exactly what Bitcoin Cash is and how it was created, we first need to understand how Bitcoin itself is mined.
Bitcoin is created and used online but the more Bitcoins there are in circulation the more difficult it becomes to create more. Bitcoin transactions are made possible by blockchain technology, which is the database which stores all of the transaction information. This database is accessible to everyone in the network, which makes it very difficult for people to change or manipulate the data. For this reason, most people consider cryptocurrencies to be highly reliable despite the lack of central authority controlling them.
The creation process is known as mining. This is completed by individuals using their computer processing power, also known as CPU, to run software which unlocks blocks in the blockchain by solving the complex mathematical code which seals them. In the past, anyone with a regular computer hard drive could mine Bitcoin. However, it has now become more difficult and requires a large amount of specialist computer hardware and software. Miners can work together to solve problems faster and split the reward, which is Bitcoins. Each block is worth approximately 25 Bitcoins, although this value changes every four years to reduce the rate at which Bitcoin is being mined. If you’re interested in earning some cryptocurrency for yourself, why not see if you’ve got what it takes to mine Bitcoin?
On the 1st of August 2017, Bitcoin Cash has recently emerged from the same ledger as Bitcoin. It was created through a fork in the blockchain, by Bitcoin miners who were finding Bitcoin limiting technically and were frustrated by the lack of software updates available for Bitcoin users. Bitcoin Cash was created by a hard fork in the technology, which had divided the online community at the heart of the digital currency. Bitcoin Cash has been described by its creators as, “the continuation of the Bitcoin project as peer-to-peer digital cash”. By default, everyone who already had Bitcoin in their Bitcoin wallet or account received some Bitcoin Cash. The new cryptocurrency is striving to make the potential for growth unrestricted and to ensure that it is used around the world. Bitcoin Cash still aims to use the same decentralised technology.
The main differences to note between Bitcoin Cash and Bitcoin are that the new currency has increased the block size to 8MB. Bitcoin blocks are only 1MB in size, which works out at approximately three transactions per second. The creators of Bitcoin Cash felt that this was limiting the growth of Bitcoin significantly and that over time Bitcoin will decrease in value. Bitcoin Cash developers have also removed a code change known as SegWit, which could be active on the Bitcoin blockchain by the end of August. Many digital currency users want to avoid this new feature, which could be a factor that has resulted in Bitcoin Cash already moving up to number 5 in the top digital currencies currently available.
Although competition is inevitable, the currencies have been designed to coexist harmoniously. Anyone who has used Bitcoin previously will notice little difference in terms of how it’s used. However, Bitcoin Cash allows more transactions per minute to be made in comparison to Bitcoin. This means that it is faster to use and has lower transaction fees. Transactions are also said to operate at a more reliable rate than Bitcoin.
At the moment support for Bitcoin Cash is limited as it is such a new concept. The following exchanges are supporting Bitcoin Cash: Kraken, ViaBTC and OkCoin among others. In the future, it’s highly likely that we will see the increasing use of Bitcoin Cash in the future. Some people believe that the future of cryptocurrencies like Bitcoin is limited, only time will tell whether they will continue to increase in use or plummet in value. Either way, the blockchain technology behind these cryptocurrencies is revolutionary and could be used for a range of other record keeping processes, from online identification services to medical records. Blockchain technology has the potential to make data sharing faster and more efficient.
