What Is BCash (Bitcoin Cash)? Is BCash Worth Buying for Investment?
There is a new kid in town – Bitcoin Cash (BCash) and some of us are pretty excited about it as the price spiked significantly. Want to know what is BCash and if it is worth buying (instead of getting it free) for investment?
What Is BCash?
I bet you have heard about Bitcoin (BTC). Bitcoin transactions are validated as more currency is “mined” by computers solving certain mathematical problems.
To be validated by the decentralized network of bitcoin miners, the transactions are bundled in “blocks.” The bigger the size of the block, the more transactions can be validated in a second. Bitcoin has a maximum block size of 1MB and some transaction can take up to an hour to complete.
Just like a page of a ledger, there is a limit to how many transactions you can log.
The low limit of Bitcoin has led to delays in the amount of time it requires to verify a transaction. Consequently, it leads to higher surcharges for verification.
Prior to 1st August 2017, key miners (e.g. Bitcoin Unlimited) and developers (Bitcoin Core) of Bitcoin agreed to increase the efficiency of operating the cryptocurrency. Since the technology is open source, changes are made to its underlying code if agreed by a consensus of users.
On 1st August 2017, Bitcoin was SegWit activated (through BIP91/BIP141) and its clone – BCash (Bitcoin Cash) as it splits. BCash shares its entire transaction history with Bitcoin up until the point of the split, with the history diverging after the split.
That simply means for whatever amount of Bitcoins you had before the split, you will end up having that same amount of BCash. For those who owned Bitcoin prior to August, you will be able to spend your Bcash coins without spending Bitcoin.
What Are the Advantages of BCash Over Bitcoin?
Block Size Limit Increase – Bitcoin Cash provides much-needed relief to users with an immediate increase of the block size limit to 8MB.
Replay and Wipeout Protection – Should two chains persist, Bitcoin Cash minimizes user disruption, and permits safe and peaceful coexistence of the two chains, with well thought out replay and wipeout protection.
New SigHash Type – As part of the replay protection technology, Bitcoin Cash introduces a new way of signing transactions. This also brings additional benefits such as input value signing for improved hardware wallet security, and elimination of the quadratic hashing problem.
Is BCash Worth Buying for Investment?
First of all, I don’t think BCash is going to replace Bitcoin. Both BCash and Bitcoin will coexist in the ecosystem.
At the time of writing, we are not sure if BCash is going to reach the price of Bitcoin. However, BCash may repeat the history of Ethereum.
For those who don’t know the Ethereum’s hard fork, the core developers of Ethereum unilaterally made the decision to create a new version of the network with different rules than the original in 2016. However, the reason for the Ethereum’s split was slightly different than Bitcoin.
The most notable Ethereum project, The DAO (Distributed Autonomous Organization) raised $150m in Ether during a public crowd sale early 2016. Held online, anyone who had Ether could participate. The idea was simple, in theory. Investors would send money to The DAO and receive voting tokens, and then those who invested (and voted) would decide democratically how The DAO should disperse those funds.
By May 21, it had raised $150 million from roughly 11,000 investors, in what’s considered the biggest crowdfunding effort in history. Then, DAO was hacked. On June 17th, someone started siphoning money out of the DAO.
Skipping ahead, the Ethereum community eventually held a vote, with the majority of participants agreeing that they wanted to change Ethereum’s code to get the funds back to investors and away from the attacker. Hence, Ethereum (ETH) and Ethereum Classic (ETC) split.
Today, both strains of the currency continue to exist. Ethereum (ETH) is by far the most successful, being the second most popular currency after Bitcoin.
No one knows if BCash is going to follow the fate of Ethereum (ETH) where it is far more successful than Ethereum Classic. Our personal view is why not buying some (if you don’t own one for free) while it is still cheap and put it aside for long-term investment. Maybe one day it overtakes Bitcoin and you could become a multi-millionaire.
BCash has a chance to become the dominant cryptocurrency contingent upon its ability to gain trust and support from both current and new players as well as the security of its network.
How and Where to Buy BCash?
At the time of writing, Bcash (BCH) is available for Bitcoin through major exchanges like Bittrex, Bitfinex, and Kraken. Users interested in purchasing BCash with USD on an exchange may visit these exchanges.
If you would like to buy Bcash through Bitfinex, follow their instructions for setting up an account and depositing funds. As Bitfinex offers a different environment for acquiring BCash in a way that you must buy it by fulfilling other traders’ sell orders. This means that prices may vary, sometimes widely.
There are very few direct fiat gateways into Bcash (BCH), for those who reside in countries that don’t have direct access to Bcash. That means the vast majority of people who buy Bcash did it with Bitcoin. Bitcoin is the first coin that most people buy so it’s hard for a different crypto to overtake the value.
STEP 1: Create A Bitfinex Account
The registration process in Bitfinex is super fast & easy. Less can be said about interpreting their dashboard, but it’s not the worst. Once, you’re approved here, we’ll get to the good stuff.
STEP 2: Buy Bitcoin
Registration is pretty straightforward, requiring things like your name, email, and a verification of your identity (eg: pictures of your driver’s license, etc). Once your account is created and verified, you’ll need to add a funding source like a bank account and/or a debit card. Once this is set up, you can buy some Bitcoin.
The reason I encourage my readers to buy BTC from Coinbase because you will get $10 free BTC once you trade your first $100 through Coinbase.
STEP 3: Transfer Bitcoin to Bitfinex
Go to Bitfinex “Wallets” from on the top right menu.
Here, you’ll see a list of currencies and you need for “Bitcoin.” When you find Bitcoin, click the + icon to open a lightbox in which you will generate a Bitcoin wallet address. Once you’ve done this, copy that long string of letters & number.
Now, go back to Coinbase. Here, you’ll navigate to the Send/Request tab. Now paste the Bitcoin deposit address you got from Bitfinex into the “Destination” box and type in the amount of Bitcoin you want to send. You can opt to either move all of your Bitcoin or some fraction.
Just one click and your funds should be on their way to Bittrex. It will take a bit of time, perhaps 15 minutes or more, for your Bitcoin transfer to complete.
Step 4: Trade Bitcoin for BCH on Bitfinex
To trade your Bitcoin (BTC) for BCash (BCH):
- Check the price of BCH in real time (1-minute), and when you are happy with the price, say 0.10365 (BCH/BTC) as shown in the below figure.
- Click the “Limit” and change to “Market”. This means you are calling the platform to generate the latest bid price.
- Then, key in the number of BCH you want to buy. This example, I key in 100000 BCH.
- Click “Exchange Buy”.
You just exchanged Bitcoin for BCH. Be aware that there often isn’t much BCH for sale at the very lowest price, so you may need to repeat steps 1-3 a few times until all your Bitcoin is exchanged.
You then can check your wallet again and see the amount of BCH you have just purchased.