What Is Bitcoin Cash (BCH)? Origins, Differences from Bitcoin and Risks

Bitcoin Cash (BCH) is a separate cryptocurrency that split from Bitcoin. Despite the similar name, it is a different asset. Understanding its origins, technical features and risks is important.

What is Bitcoin Cash, and how did it begin?

Bitcoin Cash, abbreviated BCH, separated from Bitcoin (BTC) in August 2017. Splitting an existing blockchain into two branches is called a hard fork.

At the time, growing transaction volume slowed Bitcoin processing and raised fees because block capacity was limited to 1 MB. The community disagreed over how to address this. Supporters of larger blocks to make Bitcoin more suitable for payments split off to create Bitcoin Cash.

How Bitcoin and Bitcoin Cash differ

Their names and origins are shared, but their emphasis differs. Bitcoin developed toward a store-of-value role, often called digital gold, while Bitcoin Cash emphasizes electronic cash for everyday payments.

Both have a maximum supply of 21 million. Larger blocks can improve transaction processing but increase storage and validation burdens, making node operation harder. This is best understood as a difference in design philosophy, rather than a simple verdict on which is better.

Bitcoin Cash is classified among larger coins by market cap, but it is an entirely different asset from Bitcoin. It is also grouped with altcoins. See market capitalization when comparing scale.

Risks to understand

Like every cryptocurrency, Bitcoin Cash carries risks to examine carefully before investing.

• High volatility: Large short-term price movements create substantial loss risk.
• Competition: Other payment-focused projects compete with it, and demand and adoption affect price.
• Further forks: Bitcoin Cash itself has split again, so avoid confusing similarly named assets.
• Storage and exchange risks: Understand wallet types and exchange security to protect assets.

Scammers may also impersonate similarly named coins or promise certain returns. Learn how to avoid scams.

Summary

Bitcoin Cash is a separate coin created by a 2017 hard fork after Bitcoin's scalability debate. It pursues fast, low-cost payments through larger blocks. Despite a similar name, its aims and technology differ from Bitcoin's, and it carries clear risks including high volatility.

This article provides information about Bitcoin Cash and does not recommend buying or selling a coin or predict future prices. Cryptocurrency investment can lose principal. Study thoroughly and decide carefully under your own judgment and responsibility.