Just before Bitcoin Cash (BCH) came into being, the transaction fees had skyrocketed, from fractions of a penny to nearly $9 in August 2017. Besides, the bitcoin users had to wait for hours or even days for their payments to be cleared. This decline in usability caused many early retail adopters to abandon Bitcoin, either switching to competing digital currencies or returning to traditional payments entirely. In 2017, the number of bitcoin transactions on the network began to decline for the first time in the Bitcoin's history.
Five Things To Know About Bitcoin Cash
1. Because of influx of investors in bitcoins, two major problems had occurred. The first was the slowdown of clearance of payments. Second the transaction fee had risen. After these two reasons surfaced, the bitcoins usability started falling. By 2017, several early retail adopters had started abandoning bitcoins, or started switching to the rival digital currencies.
2. The old bitcoin had a maximum limit of 1 MB of data per block or about 3 transactions per second. Although these limits could be raised technically, the bitcoin community never reached a consensus after years of debate. So, instead of raising the limits, the community decided to create another blockchain (which was later known as Bitcoin Cash) with the improved limits. The older bitcoins were taken to this new and improved blockchain that had a maximum limit of 8 MBs per block.
3. From the hard fork on August 1, 2017, Bitcoin Cash was born, increasing the capacity limit of each block. The purpose of the fork was to raise the number of transactions that can be processed by increasing the block size to 8 MBs against 1 MB of bitcoin.
4. Bitcoin cash is the hard fork of the bitcoin. A hard fork occurs when a blockchain splits into two incompatible separate chains. Anyone who held bitcoin at the time of bitcoin cash was created automatically became owners of bitcoin cash.
5. Bitcoin Cash's official website states that the new digital currency fulfils the original promise of bitcoin as peer-to-peer electronic cash. The users are empowered with low fees and reliable confirmations.
