Why are the fees so affordable?

Bitcoin Cash fees are remarkably low due to its approach to scaling. Unlike the original Bitcoin network, Bitcoin Cash removed the block size limit from the consensus rules during the fork, opting for a client-configurable excessive block (EB) standard. Initially set at 8 MB, this larger effective limit allowed Bitcoin Cash to achieve faster confirmation times and lower fees by increasing its throughput capacity. Subsequent upgrades in May 2018, including an EB of 32 MB, further enhanced scalability. Developers have conducted stress tests, exploring even larger block sizes, such as 256 MB and 1 GB, demonstrating the theoretical feasibility of handling transaction throughput comparable to VISA levels.

In May of 2024, Bitcoin Cash will activate an adaptive block size limit algorithm. This algorithm will constantly adjust the block size, with a baseline of 32 MB, as the needs of the network evolve. The update will allow the block size on Bitcoin Cash to grow as much as 2x per year.

The cost-effectiveness of fees on Bitcoin Cash opens up a plethora of possibilities. Users can seamlessly engage in microtransactions, leverage economical payment channels, execute intricate smart contracts, and access affordable coin mixing services.

Beyond these immediate advantages, the low fees create opportunities for innovative use cases, streamlined storage of arbitrary data, and facilitate hassle-free tipping and charitable donations of modest amounts. Looking ahead, a promising prospect is the potential to onboard a substantial number of users, particularly the unbanked population lacking sufficient financial services through conventional institutions.

Supporters of Bitcoin Cash assert that the economical nature of transactions aligns with the foundational vision of Bitcoin. Low fees are seen as a crucial element in realizing a global, electronic peer-to-peer cash system, fostering human flourishing on an unparalleled scale.

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