Bitcoin Cash (BCH)
Date Launched: August 1, 2017
Founders: Jihan Wu (CEO of Bitmain), Roger Ver (CEO of Bitcoin.com)
Parent Fork: Bitcoin
Bitcoin Cash is a fork of Bitcoin that was created in August of 2017. Publicly led by Jihan Wu of Bitmain and Roger Ver, Bitcoin Cash aims to speed up transactions by increasing Bitcoin’s block-size parameter from 1mb to 8mb. It also removes Segregated Witness (SegWit), a code adjustment designed to free up block space and increase transaction speeds.
As Bitcoin became more popular, the number of transactions grew too high for the network to handle. The confirmation times for transactions grew longer and longer and fees also skyrocketed. This raised major warning flags for the supports of Bitcoin. Users knew that if Bitcoin wanted mainstream adoption, it needed to first fix the scaling issues.
There were 2 main proposals for the solution to Bitcoin’s scaling problems. The first was SegWit, which was intended to solve the problem of slow transactions and high fees by reducing the size of transactions in a block. The second was to increase block-sizes, so more transactions could fit inside each block.
Creation of Bitcoin Cash
However, internal conflict arose over which solution was better. Updates to Bitcoin’s code could not be properly processed if the network did not have consensus. Eventually, the Bitcoin developer team came up with the idea of a UASF (aka User Activated Soft Fork) called BIP 148.
BIP 148 is a user activated soft fork meaning it is activated by the users rather than miners. It states that all the full nodes in the bitcoin network will reject any and all blocks that are being created without SegWit ingrained in it. The idea is to motivate the miners to put SegWit activation in the blocks that they mine for it to be part of the system.
Going by the coordination game-theory, the miners will be compelled to accept SegWit and comply with the majority. This however raised a serious concern. What if the change over doesn’t happen smoothly and causes the chain to split? This could spell disaster for the entire Bitcoin network. This is the exact issue raised by Jihan Wu, founder of Bitcoin mining company Bitmain. So, as a contingency plan for BIP 148, Bitmain proposed a UAHF (aka User Activated Hard Fork).
The User Activated Hard Fork is a proposal by Bitmain which gave blocks a larger size (8 mb). Since this is a hard fork, the chain will not be backwards compatible with the rest of the Bitcoin blockchain. Jihan, along with longtime Bitcoin evangelist Roger Ver, visualized this as a voluntary escape for anyone who is not interested in following the BIP 148 proposal. This proposal became Bitcoin Cash.