Bitcoin Cash (BCH) was created to make Bitcoin faster and cheaper for everyday use. It was the result of a major division within the Bitcoin community, caused by disagreements over fees, transaction times, scalability, and other issues. While Bitcoin evolved into a store of value, Bitcoin Cash focused on payments. In this guide, you will learn what Bitcoin Cash is and how it is used.
What is Bitcoin Cash (BCH)?
Bitcoin Cash is an altcoin and a fork of Bitcoin. It was launched in 2017 as a direct response to scalability issues on the Bitcoin network. Later, during a hard fork in 2018, Bitcoin Cash underwent another fork, resulting in a new currency called Bitcoin Satoshi Vision (BSV). The two separate cryptocurrencies now operate independently of Bitcoin.
Bitcoin Cash runs on its own blockchain, uses its own consensus mechanism and has a separate community of users, miners and developers. Its ticker symbol is BCH and it functions as a peer-to-peer payment system designed for low-cost, fast transactions. BCH can be mined by users with GPU or ASIC miners, but as with Bitcoin, large pools and companies dominate the space.
Infographic showing Bitcoin Cash’s key technical features, including 32MB blocks for higher transaction throughput, low fees for daily payments, faster confirmations with less congestion, and a proof-of-work SHA-256 security model similar to Bitcoin
How BCH differs from Bitcoin in one sentence
Bitcoin is a scarce store of long-term value, while Bitcoin Cash acts more like money for everyday transactions.
Development milestones for Bitcoin Cash (BCH).
Why Bitcoin Cash Was Created: The Bitcoin Fork of 2017
The more Bitcoin adoption rose around the world, the more the network struggled to keep up. With an increasing number of transactions, blocks filled up faster, leaving users competing for space. A direct consequence of this was higher transaction costs. Confirmation also took more time and the system became overwhelmingly expensive for smaller payments.
Bitcoin launched as digital cash, but quickly became too slow and expensive for those who wanted to use it regularly.
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The scalability problem Bitcoin faced: high fees, slow speeds
The block size limit has been one of the biggest issues in the Bitcoin debate.
- Bitcoin had a maximum block size of 1MB
- Bitcoin Cash increased the maximum block size to 32 MB
By increasing the block size, the Bitcoin Cash blockchain could process more transactions per block and up to 116 transactions per second, reducing costs compared to BTC. This change was intended to restore the original vision of Bitcoin becoming a digital payment currency.
The Bitcoin Cash Hard Fork: Block 478,559
The Bitcoin community split into two groups:
- One group wanted to keep the blocks small and rely on second-layer solutions
- The other wanted larger blocks to scale the network directly
Developers proposed multiple solutions, but no consensus could be reached. This disagreement ultimately led to a hard fork on August 1, 2017, at block 478.559. All Bitcoin holders at that time automatically received an equal amount of BCH. This was the creation of a new currency.
The philosophical difference: digital gold versus peer-to-peer cash
Bitcoin eventually morphed into the cryptocurrency we know today, often called “digital gold” – an asset that people invest in and hold for the long term. Bitcoin Cash, on the other hand, has doubled the value of peer-to-peer electronic cash – in other words, a currency that is meant to be spent and not hoarded.
This difference still defines both networks today.
How Bitcoin Cash Works
Bitcoin Cash works in the same way as Bitcoin. It also uses a public blockchain and communicates with digital wallets. However, there are important changes that improve scalability and costs. For example, Bitcoin Cash can process more than 100 transactions per second, while confirmations usually occur within seconds to minutes.
How BCH achieves safety
Bitcoin Cash uses proof-of-work (PoW) as its consensus mechanism and relies on miners to validate transactions and secure the network.
What miners do
In the Bitcoin Cash network, miners do:
- Collect transactions
- Bundle them into a block
- Fight to add that block to the blockchain
- Receive rewards for their work
This process keeps the Bitcoin Cash blockchain decentralized and secure.
SHA-256 and why BCH uses it
SHA-256 is a cryptographic hash algorithm used to secure both the Bitcoin and Bitcoin Cash blockchains. It converts transaction data into a fixed-length string of numbers and letters. That string cannot be easily changed. SHA-256 is used by miners to validate transactions and create new blocks. They compete to solve cryptographic puzzles, and the first to succeed adds a new block to the blockchain. This process keeps the network secure and prevents double spending.
Block rewards and halving
Miners on the Bitcoin Cash network earn newly issued BCH coins, plus fees. The issuance schedule includes halving events that reduce rewards over time, limiting the total supply to 21 million coins – just like Bitcoin.
Learn more about Bitcoin halving.
Use of Bitcoin Cash
Bitcoin Cash is mainly used for payments. The common usage scenarios include:
- Paying for goods and services
- Send money worldwide at low costs
- Peer-to-peer transfers
- Everyday transactions where costs matter
Bitcoin Cash (BCH) is accepted by a wide range of merchants and services. You can use it on online marketplaces like Gamivo, travel platforms like Destinia, and electronics stores like Trezor. Payment services such as eGifter and NOWPayments also support BCH, allowing users to purchase gift cards for major brands such as Uber Eats, Amazon and Home Depot, while platforms such as PayPal and Binance Pay enable BCH transactions and transfers. Low fees make Bitcoin Cash practical and widely accepted.
Bitcoin Cash pros and cons
Bitcoin Cash certainly has some benefits for users, but that doesn’t mean there aren’t concerns. Below is a more detailed list of pros and cons of BCH.
| Benefits of Bitcoin Cash | Limitations and Risks of Bitcoin Cash |
| Low cost (often less than $0.01) | Smaller market cap, fewer users and less liquidity than BTC |
| Fast confirmation times | Competition from BTC, Lightning Network, Stablecoins, L2s |
| Simple payment UX | Regulatory and market uncertainty |
| Strong alignment with Satoshi’s original ‘cash’ vision | Inconstancy |
| Small network, susceptible to attacks |
How can you buy your first Bitcoin Cash?
You can buy Bitcoin Cash on Changelly using a bank card, Apple Pay, Google Pay, PayPal or any other cryptocurrency. Here are step-by-step instructions on how to do this:
- Open the Changelly website or mobile app.
- Create an account (not necessary, but recommended)
- Enter your wallet address
- Choose one of the available payment methods.
- Search for Bitcoin Cash (BCH) and complete the transaction.
Always check costs, security settings and withdrawal options before making a purchase. If you plan to keep your BCH, make sure you keep it in a secure cold wallet, or a hot wallet for active trading. You can also buy Bitcoin Cash on other platforms, but make sure you research an exchange before using it.
Final thoughts
Bitcoin Cash owes its existence to the fact that the Bitcoin community disagrees on scaling. Regardless, BCH has played a distinct role as digital cash in its own right. It faces strong competition and market volatility, yet remains a working payment system with low fees and fast transactions.
Whether Bitcoin Cash has a strong future depends on adoption, developer activity, and user demand. For beginners exploring cryptocurrency beyond asset holdings, BCH offers a practical look at how blockchain-based money can work in the real world.
Frequently asked questions
Is Bitcoin Cash the same as Bitcoin?
No. Bitcoin Cash (BCH) and Bitcoin (BTC) are separate cryptocurrencies. They share the same history until 2017, after which they parted ways and now run on different blockchains with different rules.
Why is BCH cheaper than BTC?
BCH is mainly cheaper because market demand is lower. Bitcoin is seen as ‘digital gold’, while Bitcoin Cash focuses more on payments. Lower demand usually means a lower price, even if the technology works well.
Did BCH replace my BTC during the fork?
No. When Bitcoin Cash split from Bitcoin in 2017, BTC holders received an equal amount of BCH, but their BTC remained unchanged. You ended up with both coins.
Can BCH be used for everyday payments?
Yes. Bitcoin Cash is designed for fast, low-cost transactions, making it suitable for everyday payments such as shopping, money transfers and online purchases.
Can BCH execute smart contracts? (CashTokens explained simply)
Yes, to a limited extent. Bitcoin Cash has built-in support for smart contracts through protocols such as the Simple Ledger Protocol (SLP) and upgrades such as CashTokens. CashTokens allows Bitcoin Cash to create tokens and simple smart contract-like features such as NFTs and programmable payments without complex code.
Is Bitcoin Cash safe?
Bitcoin Cash uses proof-of-work and SHA-256, the same security model as Bitcoin. The network is secure, but as with all cryptocurrencies, its price can be volatile.
Disclaimer: Please note that the content of this article is not financial or investment advice. The information contained in this article is solely the opinion of the author and should not be considered trading or investment recommendations. We make no guarantees about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional random movements. Any investor, trader or regular crypto user should research multiple points of view and be familiar with all local regulations before making an investment.