Bitcoin Cash (BCH or BCC on exchanges) is a spin-off cryptocurrency that was
the result of the August 1st hard fork by a small, yet significant proportion of the
Bitcoin mining community. The fork involves increased block sizes and faster
transaction times which in turn will lead to lower transaction fees. The blocksize
has increased to 8MB, from the original 1MB that Bitcoin uses. This fork was
designed to solve the scalability problems that Bitcoin currently faces.
So if Bitcoin Cash is technologically superior to Bitcoin, why don’t I invest
in that instead?
It’s a tough question to answer because quite frankly, these are still very early
days. At the time of writing the fork is only 1 month old and Bitcoin Cash has
had high price fluctuations. Liquidity is much lower than Bitcoin (meaning it is
difficult to sell large amounts) and real world adoption effects remain to be
determined. If you’re a new investor, Bitcoin Cash is certainly something to be
monitored. However, the network effects of Bitcoin are still too strong to ignore,
and it is still very much the number one cryptocurrency.
In terms of market price, the Bitcoin Cash split on August 1st initially led to a fall
in the price of Bitcoin, before it once again rose to an all-time-high in late
August. Bitcoin Cash value initially plummeted before a boom and then a reset
to its current price of around $550.
If you purchased Bitcoin after August 1st, Bitcoin Cash should be treated as a
completely separate currency. Any Bitcoin transaction will not be replicated in
Bitcoin Cash or vice versa. If you wish to purchase Bitcoin, look for the symbol
BTC on exchanges. If you purchased Bitcoin before August 1st you may well be
able to receive the same amount in Bitcoin Cash – providing you held it in a
wallet that was not linked to any exchange.
For miners, or those interested in mining, at the time of writing Bitcoin Cash
offers greater mining rewards when compared to Bitcoin, due to a decreased
difficulty in its proof-of-work algorithm.