Bitcoin Cash is a cryptocurrency and payment system. It was created in August 2017 as an alternative to Bitcoin because of its high transaction fees and slow network. Investing in the currency presents many advantages for investors, such as low transaction fees and fast-speed transactions. Investing in Bitcoin Cash has proven to be a lucrative investment opportunity with many benefits over other cryptocurrencies like bitcoin or Ethereum.
Bitcoin vs. Bitcoin Cash
That isn’t to say that these two cryptocurrencies are identical. Hard forks result from disagreements among the community; therefore, there must be distinctions between them.
The first distinction is the obvious one: it’s worth it.
None of the Bitcoin forks has attracted as much of the market share as the original crypto, so they are worth only a small amount.
This is both a benefit and disadvantage, depending on who you ask. The reality is that none of the BTC fork variants are worth even half of what BTC was trading for.
Then there are the few but significant technological distinctions.
These are the most vital ones since they resulted from the conflict that prompted the fork and, in theory, made the split currencies a better product for the cryptocurrency market.
The fundamental distinction in Bitcoin Cash is the block size. In the context of bitcoin and other virtual currencies, a block is a package of several transactions that miners must validate.
Bitcoin Cash’s bigger block size (8MB, from Bitcoin’s 1MB) aims to resolve the Bitcoin Scalability Problem, which has been one of the most challenging roadblocks for cryptocurrencies in their path to mass adoption.
Naturally, Bitcoin Cash’s larger block size does not address the issue, but it does make it far less significant.
The second technical distinction is somewhat smaller.
The proof-of-work system behind Bitcoin dictates that new blocks to be mined will always need more effort than previous ones, with difficulty increasing every so often.
Bitcoin Cash is a way to make the mining economy go. It scales the difficulty for blocks in real-time, based on how many miners there are.
Although this smaller modification may appear insignificant and directed only at miners, it also assists the blockchain.
Because transactions are only verified after a block is mined, a dynamic difficulty algorithm in BCH’s blockchain allows for the blockchain to self-optimize so that transactions are always validated in a short period of time.
4 Reasons to Own Bitcoin Cash
Now that we’ve discussed the reasons why Bitcoin Cash exists and the key distinctions between it and Bitcoin, it’s worth emphasizing that there are benefits to owning this alternative currency even if it doesn’t have a large market share or if you won’t become a millionaire overnight.
Faster Processing Rate
The main reason to acquire Bitcoin Cash instead of Bitcoin is, as you would expect, the same reason that caused the fork and creation of altcoin.
Nobody has solved the scalability issue yet, but Bitcoin Cash has a far more optimized mining and verification system that can handle many more transactions in a shorter amount of time.
It is, therefore, an ideal fork for those who want to use Bitcoin or one of its offspring coins to gain mass adoption.
That being said, there is a warning to be noted: while Bitcoin Cash is considerably faster than Bitcoin, it isn’t the quickest cryptocurrency in the world.
The scalability problem has necessitated the design of newer blockchains with the goal of resolving it.
Although these later developments frequently have a larger transaction capacity and speed than Bitcoin and its forks, some claim to be able to process as many or more transactions per second as Visa or Mastercard.
Bitcoin Cash is considered as secure as its parent blockchain. Given that Bitcoin (and, by extension, Bitcoin Cash) has never been hacked in the decade since its inception, it has an excellent security rating.
Bitcoin Cash has never been hacked but still certain individuals in the community are concerned about its safety.
This fear is derived from its main advantage over Bitcoin: the block size.
Because of the blockchain’s reduced block size, transactions must be authenticated in smaller sections, making it more challenging for fraudulent transactions to pass- thanks to the consensus mechanism.
If the attackers control a greater transaction volume per block, they would have additional power over many more transactions, raising the danger.
However, because neither the BTC nor the BCH blockchains have been hacked so far, both are equally secure in practice.
The concerns originate from the ongoing debate in the community regarding speed vs. security – slower systems are seen to be more secure but at the expense of speed and processing power.
Transaction fees are one of the most frequently cited reasons why cryptocurrencies are considered unviable. In such cases, the fees are usually fluctuating, depending on how clogged up the network is at the time.
Some publications have reported that certain cryptocurrencies, such as Bitcoin, have high transaction costs – with some reporting fees in the dozens of dollars per transaction.
Needless to say, rates this high are extremely rare, and while they aren’t technically prohibited by Bitcoin’s framework, such levels have only been breached a few times in bitcoin’s history.
However, if fees are an issue for Bitcoin, they are not one for Bitcoin Cash. Its design, which permits more transactions to be completed at once, makes said transactions faster and cheaper.
Add to this the lower BCH price compared to BTC, and you have a Bitcoin fork with an average processing fee of less than a penny in 2018.
The developments made to the Bitcoin Cash blockchain when compared to the original Bitcoin one made it more reliable.
Shorter processing times, less volatile pricing, and smaller transaction costs translate to a cryptocurrency that may be used for regular purchases without having to worry about checking the current going price of the currency and its transactions first.
Another advantage of Bitcoin Cash is its unblemished security record.
Some blockchains, on occasion, have been hacked or taken down with distributed assaults, despite the fact that permanent uptime is a standard feature.
That isn’t the case with BCH, which has never been down.
How to Invest in Bitcoin Cash
Just like with any other investment, buying the token or shares is just the beginning.
A successful investment needs to be planned. You need an outline of how you are going to make the investment work.
This plan will be different for everyone. Some people might want more money, but some people might not care about it. If you want to get more money, then the market’s volatility might force you into a new plan.
Simply having an outline or a set of regulations telling you how to react to the market is known as having a strategy.
Don’t be scared to modify it if necessary.
Short Term Trading
One of the most popular methods for trading cryptocurrencies is to buy and sell them in short timeframes, taking advantage of the peaks and valleys that they undergo on a regular basis.
The length of these timeframes is entirely up to you: Some individuals like waiting a few days, especially when the price of a token rises steadily to optimize earnings.
Some people use more extreme strategies, such as day trading, which is when you buy and sell a cryptocurrency (or company shares) on the same day. Day trading works similarly to forex trading.
It’s extremely tough to master day trading since you must have a nearly perfect sense of the market’s short-term fluctuations, and a mistake might be devastating.
Other investors take things a step further, calling it “leveraging,” which entails borrowing money from a lender to use on day trading.
The amount of profit they make is determined by how much of their own cash they will invest (the leverage), and the contracts state that if the market falls, the investor must exit as soon as their own funds have been lost in order to reimburse the lender’s money.
Using leverage naturally boosts day trading earnings tenfold, but it also raises the danger by a factor of ten, making it the most hazardous sort of crypto trading on the market.
With paper-thin margins most of the time, day trading is inherently hazardous and difficult.
Using leverage to accomplish something is something only professionals should take on.
Buy and Hold
Buying and holding crypto tokens, which is a more popular and tranquil approach to investing, is simply known as “holding.”
To sum up, the buy-and-hold approach is typically recommended because it follows the “buy low, sell high” motto and applies it to long-term changes.
The majority of those who became overnight millionaires during the Bitcoin bull market of late 2017 did so by following this—they bought or mined Bitcoin many years earlier when it was worth a few dollars and then kept them stored away as an investment.
When the costs began to rise, they were looking for the ideal moment to enter or exit the market.
Given the fact that many people sold their BTC as a result of an oncoming calamity, it’s no surprise that the fall was even more devastating than it would have been otherwise.
Buying and holding is a long-term strategy.
It’s important not to expect it to produce any income in the near term, and is eager to sell (either because of peaks or valleys in the price) is likely to lead to a loss, but if you play the game well, you could see decent earnings over time.
Invest in your IRA
The third most popular crypto investment is one for the future: your retirement funds.
For your IRA, you’ll want a diverse portfolio that includes various types of investments and many different objectives.
You’ll want to have some long-term investments that you are likely to appreciate a lot. You might also want some safer ones that are guaranteed to keep their value relative to inflation—investments that are considerably less volatile and where your money isn’t at risk of vanishing overnight.
Unfortunately, cryptocurrency investments often fall into the above category: They have the ability to produce significant profits, but the market is always volatile, and anyone token may suddenly become worthless.
Of course, not all tokens are regarded as equally safe, but there is no such thing as safe cryptocurrency investment.
As a result, any crypto investments you make will be better suited to the “somewhat risky but may provide me a large return” category of your IRA portfolio.
How to Buy Bitcoin Cash
Get a Bitcoin Cash Wallet
Before you can acquire Bitcoin Cash, you’ll need a Bitcoin Cash wallet to keep it in. Hardware wallets that support Bitcoin Cash include Ledger and TREZOR, which are both well-known in the industry.
Both Ledger and TREZOR allow you to utilize Bitcoin Cash in the same way you would any other cryptocurrency. Both have also introduced the option of claiming your funds if you had Bitcoin at the time of the Bitcoin Cash fork. Furthermore, a variety of software wallets may be utilized to safeguard Bitcoin Cash.
You’ll need your Bitcoin Cash address after you’ve created your wallet. It’s a string of letters and numbers that begins with either a “1” or a “3,” much like traditional Bitcoin addresses.
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Find a Bitcoin Cash Exchange
Bitcoin Cash is also available on many Bitcoin exchanges, and you may buy it using real money. Here are some of the best places to do so.
Transfer the BCH to your Wallet
As usual, it’s best never to leave money in exchange. After you’ve completed your Bitcoin Cash purchase, move the funds to your chosen wallet (the one you selected in step 1). You may also monitor the progress of your transaction using a Bitcoin Cash block explorer. You can tell you’ve completed the process when you get three confirmations on your Bitcoin Cash.
It’s clear that Bitcoin Cash has still not gained full acceptance by large parts of the cryptocurrency community. In terms of both price and usage, it still lags behind its older brother. Bitcoin Cash has the advantage of being the first major split that has garnered acceptance, which can be seen as a positive or negative depending on your point of view.