Bitcoin Cash (BCH): What Is It? Definition & Explanation
Bitcoin Cash (BCH) is a peer-to-peer electronic cash system that forked from Bitcoin on August 1, 2017, expanding the block size to 8 MB (later 32 MB) to enable faster and cheaper transactions. With a maximum supply of 21 million BCH, it mirrors Bitcoin's tokenomics structure.
Bitcoin Cash was born on August 1, 2017 via a hard fork from Bitcoin at the height of the community's scalability debate, beginning its life as an independent blockchain. The core motivation was simple: increase block size to process more transactions at lower fees.
What Is It and Why Was It Created?
The Bitcoin scalability problem deeply divided the crypto community between 2015 and 2017. One faction argued Bitcoin should "scale directly" by increasing block size beyond 1 MB; the other preferred to focus on second-layer solutions like the Lightning Network.
That disagreement resolved when Bitcoin kept its 1 MB block limit in August 2017. Proponents of bigger blocks created BCH via hard fork. From that day forward, every Bitcoin holder also received an equivalent amount of BCH.
Technical Specifications
| Feature | Bitcoin Cash (BCH) | Bitcoin (BTC) |
|---|---|---|
| Block size | 32 MB | ~1–4 MB (with SegWit) |
| Fork date | August 1, 2017 | — |
| Maximum supply | 21,000,000 BCH | 21,000,000 BTC |
| Consensus | Proof of Work (SHA-256) | Proof of Work (SHA-256) |
| Average block time | ~10 minutes | ~10 minutes |
Bitcoin Cash block size comparison — BCH's 32 MB capacity vs BTC's 1–4 MB and the impact on transaction throughput
The Mission: Peer-to-Peer Electronic Cash
BCH argues it stays closer to the vision Satoshi Nakamoto laid out in his 2008 whitepaper — "Bitcoin: A Peer-to-Peer Electronic Cash System" — of affordable, usable digital cash for everyday transactions. In practice:
- Transaction fees: BCH fees are much lower than BTC's.
- Speed: Larger blocks reduce wait times in the transaction queue.
- Payment apps: BCH aims to be a more practical tool for small retail payments.
Key Milestones in BCH History
- November 2018 — BCH/BSV fork: A dispute between Roger Ver and Craig Wright resulted in BCH itself splitting into two separate chains. Bitcoin Cash ABC (BCH) and Bitcoin Satoshi Vision (BSV) are the products of that fork.
- May 2020 — IFP controversy: An infrastructure funding proposal again divided the community; BCHN later assumed network control.
Risks and Considerations
- Split risk: BCH's community has experienced significant splits before; similar disagreements could recur.
- Adoption: Wallet and exchange support is more limited compared to BTC; merchant acceptance remains niche.
- Hash rate competition: Because BCH uses the same SHA-256 algorithm as BTC, the vast majority of hash rate is directed at BTC miners.
- Brand confusion: The name "Bitcoin Cash" can cause confusion with Bitcoin for new users.
COINOTAG Perspective
Bitcoin Cash is a concrete product of the blockchain scalability debate. It represents a philosophical position: answering the "payment tool or store of value?" question with "payment tool." While its adoption remains far more limited than BTC, it continues to offer a functional alternative for low-fee peer-to-peer transfers.