Bitcoin Cash 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.
Video Bitcoin Cash
History
Idea forms
On July 20, 2017 at block height 476768 Bitcoin Improvement Proposal (BIP) 91 was locked in (i.e. scheduled to activate at block height 477120). It was designed to reject blocks created by miners not supporting Segregated Witness.
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.
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. Subsequently, some developers took interest in the project. The Bitcoin Cash name was originally proposed by Chinese mining pool ViaBTC.
A 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. CoinDesk said that these motivations might have been behind the development and launch of Bitcoin Cash:
- Some users wanted an increase in bitcoin's block size limit parameter
- SegWit was likely to activate and some users wanted to avoid the feature
- The likelihood that SegWit2x would not launch in 2017
Development
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. The Bitcoin Cash hard fork was announced to take place on August 1, 2017.
Launch
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. 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.
Move of hashpower and change to difficulty
On August 9, 2017 it was 30% more profitable to mine on the BTC chain. 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 as the high profitability periods attracted a significant proportion of total processing power. Due to the new Emergency Difficulty Adjustment (EDA) algorithm used by Bitcoin Cash, mining difficulty fluctuated rapidly, and the most profitable chain to mine switched repeatedly between Bitcoin Cash and mainline bitcoin.
A fix for these difficulty, hashrate, and profitability fluctuations was introduced on November 13, 2017 at 7:06 p.m. UTC. 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 the original bitcoin algorithm adjusting the difficulty every 2016 blocks.
Market acceptance and naming
Cryptocurrency exchanges
Bitcoin Cash has been broadly adopted by digital currency exchanges. Exchanges such as Coinbase, CEX.IO, Kraken, ShapeShift and many others use the Bitcoin Cash name and the BCH ticker symbol for the cryptocurrency. Bitstamp and Bitfinex temporarily used the name Bcash, but after being criticized, they switched the name back to Bitcoin Cash.
Bittrex, Binance, and Huobi exchange use BCC as Bitcoin Cash's ticker symbol instead.
Cryptocurrency wallets
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.
Cryptocurrency wallets such as the Ledger hardware wallet, KeepKey hardware wallet, Electron Cash software wallet, Bitcoin.com software wallet 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.
Maps Bitcoin Cash
Supporters
Notable supporters of Bitcoin Cash include investor Roger Ver and entrepreneur Calvin Ayre.
Tax implications
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.
See also
- List of bitcoin forks
- SHA-256 crypto currencies
References
External links
- Official website
Source of the article : Wikipedia
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