Bitcoin Cash (BCH) was created in 2017 as a result of a hard fork from Bitcoin. It increased the size of blocks from its predecessor and therefore enabled more transactions to be processed and improved scalability.  Bitcoin Cash’s increase in block size attracted the attention of crypto enthusiasts. As a result, BCH now ranks among the top 20 cryptocurrencies and is becoming one of the most popular Bitcoin forks.

However, Bitcoin Cash shares some fundamental similarities with Bitcoin. It is deflationary, with a limited total of 21 million coins that can be recreated, it also retains Bitcoin’s 10 minute block production time. BCH also shares the same mining process as BTC, they both use the same SHA-256 hashing algorithm.

What are BCH key features and how does it work?

As mentioned, at a technical level, Bitcoin Cash works like Bitcoin. They both have a hard cap limit of 21 million coins, use nodes to validate transactions, and use a PoW consensus algorithm. PoW means that miners validate transactions utilizing computer power and are rewarded in BCH for their contributions.

However, BCH operates faster and has lower transaction fees than its predecessor, thanks to the larger block size. As such, it is better suited for transactions of smaller sizes. Bitcoin Cash also supports smart contracts, unlike Bitcoin.

Bitcoin Cash also differs from bitcoin in another respect as it does not incorporate Segregated Witness (SegWit). SegWit is designed to help increase the block size limit on a blockchain by removing signature data from a blockchain transaction. This frees up space for more transactions of smaller sizes, and thus faster processing speeds are achieved.

How can you mine Bitcoin Cash?

Bitcoin Cash runs on the Proof-of-Work consensus mechanism, thus miners can mint new BCH to secure the network and receive rewards for doing so. Mining rewards are halved every 4 years or when 210,000 blocks have been mined, whichever comes first. Miners also receive the network transaction fees paid by the sender.

There are several ways to mine Bitcoin Cash: individually, joining a Bitcoin Cash mining pool, or via cloud mining.

Some miners choose to repurpose their old laptops. Miners should use software that can take the highest advantage of their rig’s specification against BCH’s SHA-256 algorithm. BCH can be efficiently mined with ASIC machines.

However, because such advanced mining software has been developed with the ability to produce incredible hash power, mining individually is unlikely to return a profit without investing in a top rate mining rig or having a full node setup. To reasonably compete for block rewards, individual miners need a setup that can produce an incredibly high hash rate.

Joining a mining pool or cloud mining is likely to bring the highest profits. Pool mining requires miners to have mining software and share the computer power with others by joining a pool. The combined power of the pool generally results in a higher hash rate and therefore a greater chance of successfully mining a block. However, since a miner is only contributing a part of the power, the share of the reward will be far less, although more regular. 

Cloud mining does not require any upfront expenditure on mining software. In cloud mining, you rent out computing power from another person or group, paying regularly. Generally, a miner buys a contract for a predetermined period and the ASIC owner does all the mining. Rewards are agreed in the contract.

Where can you buy BCH?

BCH is available to buy on the listed CEXs and DEXs here. HitBTC and DragonEX are some of the most popular options with the highest trading volume.