Bitcoin Cash: What You Need to Know
In this article, I’m going to explain what Bitcoin Cash is, how it affects you and how you should prepare for August 1.
What is Bitcoin Cash?
- project announcement on Bitcointalk https://bitcointalk.org/index.php?topic=2040221
- project website https://www.bitcoincash.org/
Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.
Is Bitcoin Cash different from ‘Bitcoin’?
Yes. Bitcoin Cash is the continuation of the Bitcoin project as peer-to-peer digital cash. It is a fork of the Bitcoin blockchain ledger, with upgraded consensus rules that allow it to grow and scale.
This means that if you own Bitcoin (that is, you control your own private keys) prior to the fork on 2017 August 1, you will have the same amount of Bitcoin and Bitcoin Cash after the fork. BCC futures are currently trading at about $475 on ViaBTC.
Why is this happening? I thought Bitcoin solved scaling.
BCC looks like an appeal to the segment of the Bitcoin users that don’t like Segwit. Since Segwit is getting activated on Bitcoin, Bitcoin Cash is for many of these people a place to go.
Why was a fork necessary to create Bitcoin Cash?
The legacy Bitcoin code had a maximum limit of 1MB of data per block, or about 3 transactions per second. Although technically simple to raise this limit, the community could not reach a consensus, even after years of debate.
What features does Bitcoin Cash have?
Bitcoin Cash offers three new features.
- much larger block size of 8MB.
- replay and wipeout protection.
- it offers a way to adjust the proof-of-work difficulty quicker than the normal 2016 block difficulty adjustment interval found in Bitcoin.
If I own Bitcoin, do I automatically own Bitcoin Cash too?
Yes. Because Bitcoin Cash is a fork of the ledger, that means you own the same amount of Bitcoin Cash as you did Bitcoin at the time of the forking block. However, if your Bitcoins are stored by a third party such as an exchange, then you must inquire with them about your cash.
What do I need to know?
Exchanges or third-party bitcoin storage providers may or may not give you your Bitcoin Cash.
Hard forks present two risks: replay and wipeout attacks.
If you want to maximize your holdings, it’s in your best interest to get your Bitcoin off third-party services and control your own private keys before August 1st.
Bitcoin Cash announcement brings more questions than answers.
If you want to maximize your holdings, it’s in your best interest to get your Bitcoin off third-party services and control your own private keys before August 1st.