Bitcoin Cash (BCH) is a coin that split off from Bitcoin (a hard fork) in August 2017. Back then the Bitcoin camp divided between 'make blocks bigger and use it for payments' and 'keep them small and focus on store of value' โ and the former broke away to create Bitcoin Cash.
In other words, BCH was born under the banner of carrying on 'Satoshi's original vision โ cheap, fast peer-to-peer electronic cash'.
The core difference is block size. While Bitcoin keeps blocks small (about 1โ4MB), Bitcoin Cash made them large (32MB). More transactions fit in a block, so fees are cheap and delays are few.
That gives it an edge for small payments and transfers โ positioned as 'Bitcoin is digital gold, Bitcoin Cash is digital cash'.
Much is the same โ the 21-million supply cap, the roughly four-year halving and proof-of-work mining are identical to Bitcoin, because they share the same root.
What differs is the big blocks and the direction they imply. Where Bitcoin tries to solve payments on a separate layer like Lightning, BCH aims to handle cheap, fast payments directly on the base layer (L1). In 2018 it split again here, spawning 'Bitcoin SV'.
Bitcoin Cash does not want to stay a payments-only coin. The 2023 'CashTokens' upgrade made it possible to issue tokens and run simple smart contracts on BCH.
That lets applications like stablecoins, NFTs and DeFi be tried on its own chain โ an effort to add 'expanded uses' to its identity of 'cheap payments'.
Bitcoin Cash refines performance and features through annual scheduled upgrades. Better difficulty adjustment, expanding CashTokens-based applications and boosting scalability for large-scale payments are ongoing tasks.
The direction is to grow the application ecosystem while keeping the principle of 'directly on the base layer, cheap and fast'.
BCH's biggest weakness is that it lost the narrative war. The original Bitcoin dominates on the 'Bitcoin' name, brand, market cap and developer base, and in small payments BCH must also compete with stablecoins and Lightning.
Its hash power is smaller than Bitcoin's, raising some security concerns. This article is information, not advice; always make investment decisions at your own responsibility.
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