BCH is Bitcoin Cash. A group of developers, investors, entrepreneurs, and miners created Bitcoin Cash (BCH) in August 2017 because they were not happy with Bitcoin’s development plans. Bitcoin Cash is a peer-to-peer electronic cash system that aims to have higher scalability and lower transaction fees. It is also known as Bitcoin ABC (Adjustable Blocksize Cap). When politics affect blockchains, hard forks can lead to new projects. Now, you can know “What Does BCH Mean?”
How does BCH work?
Bitcoin Cash came from the same source code as Bitcoin, so they have a lot in common. They both use a Proof of Work system and are open for anyone to participate. Additionally, if you had Bitcoin before the split, you got the same amount of Bitcoin Cash after the split.
Just like Bitcoin, Bitcoin Cash also has a target block time of 10 minutes and a maximum supply of 21 million coins. The emission rate of BCH decreases by half every 210,000 blocks, which is approximately every four years. Currently, the block reward is 6.25 BCH per block.
Bitcoin Cash has a larger block size limit compared to Bitcoin, enabling more transactions to be processed in each block. Initially set at 1 MB, the limit was increased to 8 MB and further raised to 32 MB in 2018.
Bitcoin and Bitcoin Cash both use a difficulty adjustment algorithm (DAA) for mining. Bitcoin adjusts every 2016 blocks, while Bitcoin Cash adjusts after each block.
Bitcoin Cash previously used an emergency difficulty adjustment (EDA) algorithm to lower mining difficulty and attract more miners. But the algorithm was taken out because it caused issues. This is why the BCH blockchain is ahead of Bitcoin by thousands of blocks.
Bitcoin Cash adopted Schnorr Signatures in 2019, a new technology that alters the method of using digital signatures. The Schnorr Signatures system is straightforward and safe, offering increased privacy and scalability compared to the current ECDSA scheme used by Bitcoin.
BCH Features
- The BCH source code is derived from the original Bitcoin protocol.
- The total supply is limited to 21 million coins.
- BCH, being a fork of Bitcoin, also utilizes the Proof of Work (PoW) consensus mechanism for creating new coins.
- The block size has been increased from 1 MB to 32 MB.
- Supporters argue that the BCH philosophy is more in line with Satoshi’s initial vision.
- The BCH mining difficulty is adjusted after every block using the difficulty adjustment algorithm (DAA).
- BCH chose not to adopt SegWit.
- In 2019, BCH integrated Schnorr Signatures.
- Smart contract development was included in a later update.
Conclusion
Out of the many cryptocurrency projects that came from Bitcoin, Bitcoin Cash is one that has stayed somewhat important. Even though it hasn’t reached the same level of success as Bitcoin, there are still places where you can use BCH to pay for things, mainly because of its lower fees and quicker confirmation times.
Despite this, bigger block sizes raise worries about network security. Bitcoin remains the most secure blockchain network. Additionally, Bitcoin remains the top cryptocurrency, resulting in Bitcoin Cash having less market liquidity and adoption compared to BTC.