What Is Bitcoin Cash (BCH)?

Bitcoin Cash is a cryptocurrency that split off from Bitcoin in 2017 over a disagreement about how to scale the network. It uses larger blocks to fit more transactions, but that design choice comes with trade-offs every beginner should understand before forming an opinion.

Where Bitcoin Cash Came From: The 2017 Hard Fork

Bitcoin Cash (BCH) was created on August 1, 2017, through an event called a hard fork. A hard fork is a permanent split in a blockchain: the network's software is changed in a way that is incompatible with the old rules, so the chain divides into two separate networks that share the same history up to the split point. After that moment, each chain runs its own software and develops independently. If you want a refresher on the base layer, see what is a blockchain and what is Bitcoin.

The fork grew out of a years-long debate often called the "block size war." Bitcoin's blocks were effectively limited to about 1 megabyte, which capped how many transactions could be confirmed in each block. As usage rose, blocks filled up, confirmations slowed, and fees climbed. One camp wanted to keep blocks small and move scaling to other layers; another camp wanted to raise the block size directly. When no compromise held, the second group launched Bitcoin Cash with larger blocks.

How Bitcoin Cash Works

At its core, Bitcoin Cash is a peer-to-peer digital cash system that, like Bitcoin, uses Proof of Work mining to secure the network and confirm transactions. Miners compete to solve a cryptographic puzzle, add the next block, and earn newly issued BCH plus fees. If the difference between mining-based and stake-based security is new to you, our guide on Proof of Work vs Proof of Stake breaks it down.

The defining feature is the larger block size. Where Bitcoin keeps small blocks and pushes high throughput to other layers, Bitcoin Cash expanded blocks (to 8 MB at launch, later raised much further) so that more transactions fit directly on the base chain. The intended result is more on-chain capacity and lower fees during normal demand. BCH also shares Bitcoin's fixed supply cap of 21 million coins and a similar issuance schedule.

• Consensus: Proof of Work (SHA-256, the same algorithm family as Bitcoin)
• Block size: much larger than Bitcoin's, prioritizing on-chain capacity
• Goal: fast, low-cost everyday payments
• Supply: capped at 21 million BCH

Bitcoin Cash vs Bitcoin: Key Differences

The two networks look similar on paper but reflect different philosophies about how a cryptocurrency should scale. The table below summarizes the main contrasts. Note that figures like transaction fees vary with network demand and are illustrative, not fixed.

The trade-off is real and worth understanding. Bigger blocks make on-chain payments cheaper and faster, but they also make the full ledger grow more quickly. That can raise the hardware and bandwidth cost of running a full node, which critics argue may reduce how many independent participants can verify the chain over time — a factor relevant to decentralization. Supporters counter that storage and bandwidth keep getting cheaper, so larger blocks remain practical. Reasonable people disagree, and that disagreement is exactly what caused the split.

Bitcoin Cash is one of many coins outside of Bitcoin; to understand that broader landscape, see what is an altcoin. It is also distinct from networks like Ethereum that are built around smart contracts.

Risks and Things to Watch

Bitcoin Cash carries the same broad risks as any cryptocurrency, plus a few specific to its history. Being clear-eyed about these matters more than any optimistic narrative.

1. Price volatility. BCH can move sharply in both directions. Past performance tells you nothing reliable about the future.
2. Name confusion. "Bitcoin Cash" is not Bitcoin. They are separate networks with separate prices and communities. Beginners sometimes buy the wrong asset by mistake.
3. Further forks. Bitcoin Cash itself later split again (a chain commonly referenced as Bitcoin SV broke away in 2018), showing that fork-based communities can fragment more than once.
4. Decentralization debate. The bigger-block model is contested precisely because it touches node costs and network resilience.
5. Scams and impersonation. High-profile names attract fraud. Review how to avoid crypto scams before sending funds anywhere.

If you do decide to hold any cryptocurrency, learn how to store it safely with our overview of crypto wallet types, and understand how an asset's market capitalization can frame its scale and risk relative to others.

Bottom Line

Bitcoin Cash is a 2017 hard fork of Bitcoin built around a single core idea: scale by making blocks bigger so more payments fit directly on-chain. That gives it cheaper, faster everyday transactions under normal demand, at the cost of a faster-growing ledger and an ongoing debate about decentralization. It is neither a "better Bitcoin" nor a failure — it is a different set of trade-offs aimed at a different use case. Understanding why it exists is more useful than treating it as a winner or loser.

This article is for educational purposes only and is not investment advice. Cryptocurrencies are volatile and you can lose money. Always do your own research and consider speaking with a qualified financial professional before making any decision.