Bitcoin Cash was created in the summer of 2017 in order to reduce the amount of time needed to process cryptocurrency transactions and lower the price charged for premium verification. The founders of Bitcoin Cash hoped that accomplishing these goals would make using cryptocurrency much simpler and radically increase the number of people using cryptocurrency.
It was hoped that the latter development would bring the vision of Satoshi Nakamoto, who wanted to create "a new electronic cash system" much closer to reality. There are multiple signs that Bitcoin Cash is currently much closer than the original Bitcoin, also known as Bitcoin Core, to fulfilling Nakamoto's vision.
Due to overcrowding on the bitcoin blockchain, it took 95 minutes as of August 2017 for each bitcoin transaction to be approved. As of May 2018, the average processing time had dropped to 17 minutes. However, of course, that is still much longer than the processing time for traditional cash or credit cards. Meanwhile, Bitcoin Cash's average transaction fee was just over $0.10 as of May 2018, while Bitcoin Core's average transaction fee at the same point in time was about $2.50.
The History of Bitcoin Cash
Seeking to popularize a new cryptocurrency that would process transactions more quickly, a group of entrepreneurs and evangelists launched Bitcoin Cash in August 2017. The new cryptocurrency, which used a separate blockchain ledger from Bitcoin Core, was able to process eight times the number of transactions per block as Bitcoin Core. At the time of the launch, each owner of Bitcoin core was given an identical amount of Bitcoin Cash.
In May 2018, Bitcoin Cash implemented a software update. In conjunction with the update, a new segment of blockchain was created for Bitcoin Cash, and the block size was raised to 32 MB from 8 MB. The increased block size is supposed to enable Bitcoin Cash to process transactions more quickly, making the cryptocurrency easier to use for traditional commerce.
The update will also enable smart contracts to be carried out using Bitcoin Cash. According to Deloitte, blockchain-based smart contracts are "self-executing code on a blockchain that automatically implements the terms of an agreement between parties."
Smart contracts could be used in the future to provide funding for large capital projects, to easily pay employees every day instead of every other week, and to prevent purchasers of tickets to special events from selling the tickets for large profits. Blockchain-based smart contracts are already being used by major financial institutions to clear trades and by companies to reduce the costs of supply chain management.
The fact that Bitcoin Cash has added support for smart contracts could enable it to attract many more businesses to the platform and cause its popularity and market cap to grow very quickly. Appearing on CNBC on May 15, 2018, Roger Ver, one of the first investors in Bitcoin who has become a Bitcoin Cash advocate, said that the update would "make more room" on the blockchain so that "more people can use" Bitcoin Cash. According to Ver, in the wake of the update, Bitcoin Cash has about 30 times the "transactional thorough put" of Bitcoin Core.
While "other tokens have become speculative assets with no utility," Bitcoin Cash has attained its value because it can be used for commerce, Ver stated. Given these factors, Bitcoin Cash is the "best choice for businesses looking to build infrastructure based on cryptocurrency," Ver said, adding that Bitcoin Cash had become "very popular" in Thailand where he had just attended a conference. "Bitcoin Cash works as money and Bitcoin Core no longer does," Ver stated.
Asked about the higher market cap of Bitcoin Core versus Bitcoin Cash, Ver said that Bitcoin's market cap as of May 15 was higher than that of Bitcoin Core was 12 months before. Moreover, the same number of businesses were accepting Bitcoin Cash as Bitcoin Core, he noted. Finally, Bitcoin Core is "slow and unreliable," Ver said.
There are several signs supporting Ver's contention that Bitcoin Cash is rapidly gaining acceptance. Specifically, according to many websites, Microsoft now accepts Bitcoin Cash as payment for items bought on its online store, while Bitcoin Cash can be loaded onto and accessed via a Visa debit card. And according to the website Trustnodes, "about 31,000 restaurants in Europe and Vietnam" now accept Bitcoin Cash, including "Germany's biggest meal delivery provider. Liferando." Finally, Ver has said that cryptocurrency users and developers are adopting Bitcoin Cash more quickly than Bitcoin Core.
Ver has been harshly attacked by many supporters of Bitcoin Core. For example, Doug Polk, a professional poker player who also has a YouTube channel devoted to cryptocurrency, called Ver a "crazy Altcoin Man," and said that he was a hypocrite who specializes in "sheisty moves."
According to Crowdfund Insider, Ver has been "accused...of everything from hijacking the Bitcoin brand and deliberately creating brand confusion to physical sabotage of the network and market manipulation." Supporters of Bitcoin Core have also claimed that the Bitcoin Cash advocate controls the latter cryptocurrency, and they have said that he has created confusion about the Bitcoin brand, undermining its value as an investment.
Some Bitcoin devotees tried to sue Ver for using the names ":Bitcoin Core" and Bitcoin Cash on his website, Bitcoin.com, but their class action lawsuit was shut down as of May 5, 2018, partly due to lack of funds.
The steps that Bitcoin Cash is taking seem likely to eventually make it much more popular as a payment system than Bitcoin Core. Specifically, Bitcoin Cash is cheaper and faster than Bitcoin Core. Furthermore, Bitcoin Cash is now facilitating smart contracts which have already begun to proliferate among large companies. Indeed, according to Roger Ver, Bitcoin Cash, despite its shorter lifespan versus Bitcoin Core, already is accepted by the same number of merchants.
Consequently. Bitcoin Cash seems to be more on track to fulfilling the vision of the anonymous person who used the pseudonym Satoshui Nakamoto and in 2008 called for the creation of "bitcoin, a new electronic cash system that's fully peer-to-peer with no trusted third party." As Ver stated, Bitcoin Core seems to have become more of a speculative investment while Bitcoin Cash's main mission is to become a new payment system.