The start of Bitcoin Cash, Sister of Bitcoin
There is a new crypt diet on the market. It’s named: Bitcoin Cash. It already reveals how closely the new digital money is related to the world’s most famous crypto diet, Bitcoin. The start of Bitcoin Cash was on Tuesday evening.
The market responded immediately – and positively. On Thursday morning, Bitcoin Cash had already climbed to third place among the most popular cryptos, followed by Bitcoin in the first place and Ethereum in second place. The Bitcoin rate, which traditionally fluctuates strongly, declined slightly and currently stands at 2741 dollars (2315 euros). A Bitcoin cash is much less worth, but after all already 375 euro.
What is the difference between Bitcoin Cash and Bitcoin?
Bitcoin Cash is, so to speak, the little sister of Bitcoin. Without Bitcoin, there would be no Bitcoin Cash, because the new currency is the product of a spin-off of Bitcoin, a so-called fork.
Until the time of the split, both currencies share a common history, recorded in a database called the block chain. With the launch of Bitcoin Cash, there is now a further strand of the virtual cash, which is no longer compatible with one another and operates according to its own rules.
The spin-off has preceded a directional dispute within the community of Bitcoin supporters. An influential group of entrepreneurs and investors wanted to accept the technical restriction of Bitcoin, namely, that roughly only five transactions per second are possible. With Bitcoin Cash, the transaction volume to be processed will now increase. For this to be possible, extensive technical changes had to be made in the background, which necessitated the demolition of the new currency.
Bitcoin itself has been in circulation since 2009. Because neither Bitcoin nor Bitcoin Cash is currencies in the conventional sense, they are not subject to the same strict rules and conditions imposed by states or central banks such as euro or dollars.
How does Bitcoin Cash?
Both Bitcoin systems use the so-called blockchain technology. This is an encrypted database in which all transactions are stored. The blockchain is a kind of incorruptible and almost non-manipulable digital bookkeeper.
One can imagine the blockchain like a Lego tower, which grows piece by piece around new stones, called blocks. Each of these blocks contains information about current transactions, and each new block is connected to the previous one by a so-called checksum, which is calculated from its contents.
Therefore the stones, which are located further down in the tower, can not simply be removed and manipulated or replaced – but form an invariable foundation. However, the building blocks do not originate from airless space but have to be generated digitally. They are calculated in complex computing processes, the so-called mining. This takes a lot of computer power.
There was a dispute about the size of the blocks. Until now, a Bitcoin block was a megabyte – from the point of view of too little space to be able to incorporate the increasing volume of transactions fast enough into the blockchain. The blocks of Bitcoin Cash are now supposed to be eight times larger than those of Bitcoin – a second arm of the Blockchain Tower is created.
What is the spin-off for Bitcoin investors?
Because both arms of the tower still have the same foundation, the same history, a special feature applies: Before the Fork exist existent Coins are now available in both Blockchains. Those who had three Bitcoin before the Fork on August 1 now have three Bitcoin and three Bitcoin Cash.
This duplication, however, does not apply to all investors, depending on the exact nature of the investment and the Bitcoin investment. Some users could also go empty. The Bitcoin exchanges have positioned themselves very differently to Bitcoin Cash. Investors of the big stock exchange Coinbase go – as in an e-mail advertised to customers – only empty. Coinbase ignores the new digital currency. In a tweet, the head of the stock market, Brian Armstrong, emphasized that they did not want to do anything. In the long run, however, he wants to offer all the legal products with which his customers want to trade.
Exchanges, exchanges and other Bitcoin sites, investors now advise on how to deal with the innovations. Many details are still unclear. “Please be careful with everything you do,” warns, for example, the bitcoin side “BTC Echo” and advises: “Everyone should take time and deal with the matter, the BCH does not run away.” BCH and BCC are new abbreviations used for Bitcoin Cash.
Will Bitcoin Cash establish itself permanently?
This is still very uncertain despite the good start. Splits, the Forks, have always been the case in Bitcoin history. As an indication that Bitcoin Cash will be among the more successful start-ups, the influential circle of supporters can apply.
It is still unclear to what extent influential exchanges will deal with bitcoin cash in the future. The new money is traded, for example, at the big stock exchange Bitfinex from China.
The controversy over the future of Bitcoin is still going on despite the spin-off of Bitcoin Cash. There could soon be further changes, which should double the block size. This update is named SegWit2x. If it does not come, it could again boost Bitcoin Cash.