Bitcoin Cash

The first block of Bitcoin Cash was created on 1st August 2017, after a Bitcoin Improvement Proposal (BIP), aka Segregated Witness, was activated.

The Bitcoin community became divided on how to scale Bitcoin on the underlying technology. As more people used Bitcoin, the network started to struggle to keep up with the volume of transactions.

In Bitcoin, the transactions are processed block by block. A block is created and new transactions are added to that block before being verified by miners. Initially, Bitcoin was design to process 6 blocks per hour (or 1 every 10 minutes). According to statistics provided by a Bitcoin website (, by 2014 adoption had grown and the Bitcoin network was processing 500 transactions per block. At time of writing (Jan 2018), the network is processing 1500-2500 transactions per block.

For a transaction to be verified, it needs to be included in the block. If the block is full, then it must be included in the next block. But this can lead to congestion because other Bitcoin users may pay a higher fee to have their transactions processed quicker. Their transactions are escalated to the top of the list of pending transactions known as the mempool.

This increase in transaction time and fees has caused a split in the Bitcoin community with opposing viewpoints. The one group wanted to increase the size of the blocks (to be able to have more transactions in a block) whilst the other group wanted to restructure the way the data was stored in the existing blocks.

Generally speaking, the miners of Bitcoin wanted to increase the size of the blocks on the Bitcoin blockchain. But since there was no consensus, this group split away and created what is called a “hard fork” from the original Bitcoin blockchain. As a result, Bitcoin Cash was formed as a new currency.

When Bitcoin Cash was launched, it inherited the transaction history of the original Bitcoin cryptocurrency. However, all later transactions were separate. Block 478558 was the last common block and thus the first Bitcoin Cash block was 478559. Bitcoin Cash uses the hash function SHA-256 to secure the transactions in the blocks and has a total coin supply of 21 000 000.

Bitcoin Cash has experienced mixed success since its inception. With a number of other coins that have emerged that also boast lower fees and fast transactions times, it is going to take a lot of drive (through user adoption) and potential innovation to keep it competitive.