What is Bitcoin Cash? – A Guide for Beginners

What is Bitcoin Cash?

What is Bitcoin Cash? This question sparks curiosity among cryptocurrency enthusiasts and beginners alike. As an implementation of the original Bitcoin design, it’s worth understanding its unique characteristics and how it stands out in the digital currency world.

In this blog post, we’ll delve into the details of Bitcoin Cash’s inception and its fundamental workings. We will also discuss how Bitcoin Cash supports smart contracts and can easily manage smaller-priced transactions – addressing some of Bitcoin’s long-standing issues.

You’ll learn about the advantages that make it an attractive option for many, where you can buy it, and crucially, how to store your Bitcoin Cash securely. So let’s begin our journey into exploring the answer to the question of what is Bitcoin Cash.

Table of Contents:


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What is Bitcoin Cash?

Bitcoin Cash split from Bitcoin in August 2017. It emerged from a hard fork of the original, unified Bitcoin blockchain, a significant event as it was the first major split of the Bitcoin project into multiple, incompatible networks. Arguments among Bitcoin’s users, developers, miners, and other stakeholders about resolving some of its longstanding scaling problems caused the split.

Artificial Limits on Bitcoin

The main point of contention that led to this split involved addressing Bitcoin’s artificially-small transaction throughput. The limit was initially put into place very early on by Bitcoin’s creator, Satoshi Nakamoto. The purpose of the limit was to prevent certain DoS attack vectors while the network was small and vulnerable. Satoshi explicitly expected the limit to increase as the network grew.

After Satoshi left the project, those who ended up controlling Bitcoin’s code stalled any efforts to increase the limit. Bitcoin’s artificial limits ended up creating a transaction fee market as the demand for transactions far exceeds the supply. Thus transactions are unnaturally costly and potentially extremely expensive (sometimes up to $50 or more). 

From the beginning, Bitcoin Cash has aimed to increase block size limits in parallel with technological capabilities to easily manage smaller-priced transactions. So far this has ensured that the capacity of Bitcoin Cash block space far exceeds demand, keeping transaction fees extremely affordable (a fraction of a penny).

Back to Bitcoin’s Roots

Bitcoin Cash developers, holders, and enthusiasts are completely dedicated to the ideas that Satoshi Nakamoto was trying to implement. Bitcoin was originally supposed to be an electronic peer-to-peer cash system. However, due to politics and meddling, the BTC version of Bitcoin became something else, limited by artificial constraints that did not allow it to grow into the payment network it was supposed to be. 

The small-block version of Bitcoin eventually succumbed to the idea that gains in fiat currency value are more important than an ever-growing network of economic actors in an independent payment system. Thus, it became expensive and slow.

The idea of Bitcoin was supposed to change the world by creating a currency independent of any government, allowing a voluntary economy free of coercion and control. This can only happen if economic growth can happen naturally. Unfortunately for BTC Bitcoin, the transaction cap throttled the possibility of any revolutionary economic freedom. It has been turned into simply an investment vehicle, inaccessible by those who aren’t already relatively wealthy.

Bitcoin Cash fixes all this by releasing artificial constraints and allowing cheap payments. The idea of Bitcoin was supposed to change the world by creating a currency independent of any government, allowing a voluntary economy, free of coercion and control. It was supposed to be accessible by anyone, regardless of wealth. Now it can with Bitcoin Cash!

Key Takeaway: 

Bitcoin Cash emerged from a split with Bitcoin in 2017 due to disagreements over resolving scaling issues. The primary point of contention was Bitcoin’s limited transaction throughput, resulting in high fees and slow transactions. Bitcoin Cash aims to stay true to the original vision of Bitcoin as a peer-to-peer electronic cash system by removing artificial constraints and enabling affordable, quick transactions, making it accessible to a broader range of users.

How Does Bitcoin Cash Work?

Bitcoin Cash, just like Bitcoin, uses blockchain technology. A digital record of all Bitcoin Cash transactions is kept in a public ledger, downloadable by anyone. It’s a complete record of all the Bitcoin Cash addresses and all the balances held by those addresses. You can think of addresses like accounts, but you can have as many as you want and they contain no personal information.

When someone wants to use Bitcoin Cash, they make a transaction and broadcast it to the network. It could be buying stuff online, sending money to a friend’s wallet, or any other economic activity. It is similar in function to modern fiat currency payment apps, but more elegant since there is no middle-man necessary. It truly is peer-to-peer. No one can censor your payments.

Transaction Validity

For a transaction moving coins to be valid, a user must be able to prove that they own them or, more specifically, that they know the secret for spending them. In most cases, the proof is simply a private cryptographic key kept by the user’s wallet. If the private key matches the public key of the address from which coins are being spent, then it is valid. 

Bitcoin Cash wallet software handles all the particulars of this process. So, from the user’s perspective, it’s just a matter of scanning or inputting the desired address for payment and then sending the proper amount.

Mining Process

All the transactions are sent to a network of computers, known as mining nodes. The miners compete in computing a solution for a cryptographic puzzle for an entire group of valid transactions, which is called a block. The solution allows a miner to add the block to the ever-growing ledger of all the transactions – the blockchain. 

If a miner solves the puzzle before others, they get the reward of all the transaction fees plus any newly-minted coins. There is always a race between miners for each new block, which is solved every ten minutes, on average. 

Proof of Work

The point of mining is to make transactions virtually irreversible in a decentralized manner. The solution to the cryptographic puzzle is proof that energy was expended to include the transaction in the blockchain. This is called Proof of Work. 

The only way to reverse a transaction would be to expend even more energy to redo the block that it’s in, and then catch up on any other blocks. This reorganization of blocks becomes exponentially more difficult the further back in time a transaction was put into a block.

Because it is more profitable and easier to participate in the process of validating transactions and earning mining rewards than it is to reverse old transactions, all rational miners simply work to extend the blockchain. This system of incentives results in an extremely high probability that any transaction already in the blockchain is permanent.


Key Takeaway: 


Bitcoin Cash operates on blockchain technology, maintaining a public ledger of transactions with no central authority. Users transact directly, proving ownership through cryptographic keys, and transactions are validated by mining nodes through a competitive process involving cryptographic puzzles. The Proof of Work consensus mechanism secures the network by making transactions irreversible and relies on miners’ incentives to extend the blockchain, ensuring the high permanence of transactions in the system.


Advantages of Using Bitcoin Cash

Bitcoin Cash offers several advantages over traditional financial systems and even other cryptocurrencies. Bitcoin Cash has been a desirable choice for anyone seeking alternative payment methods due to its unique characteristics.

Affordable Transaction Fees

Bitcoin Cash boasts incredibly low costs linked to transfers, rendering it exceptionally suitable for conducting micro-transactions. Bid farewell to burdensome fees that can eat into your funds.

Fast Transaction Times

With Bitcoin Cash, transactions are processed at lightning speed. No more waiting days for your money to transfer. Whether you’re out shopping, receiving payments for goods, or investing in DeFi, you can count on your transactions going through smoothly and efficiently. 

Scaled Up For Growth

Bitcoin Cash stands as a testament to scalability, purposefully crafted to surmount the challenges posed by increasing transaction volumes. Its capacity to accommodate larger numbers of transactions ensures that the network remains nimble and efficient, sparing users from the frustrations of sluggishness or exorbitant costs.

Smart Contracts

Bitcoin Cash has gone through many upgrades besides just scaling efforts. There have been numerous improvements to the underlying Bitcoin Script virtual machine. Those improvements allow for an incredible array of use cases, including smart contract capabilities. 


Bitcoin Cash added CashTokens in May 2023. The CashTokens upgrade adds native fungible and non-fungible tokens to Bitcoin Cash. This allows for on-chain and off-chain entities to create and distribute tokens that represent equity, voting shares, receipts, and much more!

Network Effect

Bitcoin Cash is essentially the first mover in the cryptocurrency space focused on accessibility and inexpensive payments. Bitcoin Cash is already accepted at thousands of merchants across the world. As fiat currencies become more unstable and interest in cryptocurrencies increases, the existing Bitcoin Cash network will only grow!

Control Over Your Money

With Bitcoin Cash, you have direct control over your funds. There is no bank that needs to authorize the use of your funds. There is no government that can censor your payments. No more worrying about data breaches or meddlesome.

Opt-in Privacy

While Bitcoin Cash is not anonymous by default, with CashFusion you can securely mix your coins with other participants. After a fusion, it is impossible to use chain analysis to be certain which coins are yours. CashFusion is available on the Electron Cash wallet.


Key Takeaway: 


Bitcoin Cash offers several compelling advantages: it boasts affordable transaction fees, lightning-fast transaction times, scalability for growth, smart contract capabilities, and the recent addition of CashTokens for creating various tokens. It has an established network effect and provides users with direct control over their funds, free from bank or government interference. While not fully anonymous, Bitcoin Cash offers opt-in privacy through tools like CashFusion, allowing users to securely mix their coins and enhance transaction privacy.


Where Can I Buy Bitcoin Cash?

To get started with Bitcoin Cash, you’ll need to purchase some BCH from a cryptocurrency exchange or other credible person or service. Here are a few places and methods you can use to buy it:

Cryptocurrency Exchanges

Satisfy your appetite for Bitcoin Cash by exploring well-known exchanges such as Coinbase, Kraken, and OKX. However, it’s essential to remember a crucial rule of thumb: always withdraw your Bitcoin Cash from these exchanges once you’ve completed your purchase. This practice aligns with the fundamental principle in the cryptocurrency world – “not your keys, not your coins” – a concept we’ll delve into in more detail shortly.

Peer-to-Peer (P2P)

Looking for a more hands-on and personalized experience? If so, you might find peer-to-peer trading platforms like the Zapit Wallet appealing, as they allow you to buy BCH directly from individuals. This approach adds a touch of personal interaction to your transactions, making the process more engaging and unique.

Cryptocurrency ATM’s


There’s a strong possibility that a cryptocurrency ATM is conveniently located nearby. These ATMs offer you the convenience of purchasing Bitcoin Cash using either cash or a card, making it a seamless and accessible process. To locate the nearest one to you, simply follow this link.


Bitgree home page

If you head over to Bitgree.com, you can engage in a unique experience by making purchases on behalf of third parties while earning valuable Bitcoin Cash in return. On the other side of the transaction, the recipients of your purchases are able to utilize their Bitcoin Cash at stores that have yet to adopt Bitcoin Cash, adding an extra layer of utility and expansion to the ecosystem.


Key Takeaway: 


To acquire Bitcoin Cash (BCH), you have several options: use popular cryptocurrency exchanges; engage in peer-to-peer trading for a personal touch; utilize cryptocurrency ATMs for cash or card purchases; or participate in platforms like Bitgree, where you can make purchases for third parties and earn BCH. It’s essential to prioritize securing your private keys and consider withdrawing your BCH from exchanges to ensure ownership and control over your coins.


How to Store Your Bitcoin Cash

If you’ve got some Bitcoin Cash burning a hole in your digital pocket, you might be wondering how to keep it safe. No worries, I’m here to guide you.

The original genesis of Bitcoin included the idea that you should hold your own coins. In other words, be your own bank. Don’t let others hold your coins for you. If you don’t control the private cryptographic keys that allow for the spending of your coins, then they’re not really your coins.

Letting others be custodians for user funds has often led to tragedy. Therefore, here are a few ways you can make sure you control your Bitcoin Cash, with no intermediaries.

Software Wallets

Software wallets are digital applications that securely store your digital assets and enable you to manage and transact with cryptocurrencies, including Bitcoin Cash. Such wallets work through private cryptographic keys stored on your computer or mobile device. Several software wallets are listed in this knowledge base article.

A software wallet on your phone or desktop is an extremely convenient method for holding and spending Bitcoin Cash. A good wallet should be open-source, meaning that its source code is available to inspect. That helps to ensure that the wallet behaves as advertised. 

No matter which software wallet you choose, make sure to write down the private key seed phrase to back up your funds in case you lose your device or the wallet gets deleted. This is usually a list of 12 words that can be used to reconstruct your wallet later. Write down the seed phrase on paper, label it properly, and store it in a secure location.

Hardware Wallets

If you’re all about security, hardware wallets are probably your best bet. They keep your private keys offline, away from the prying eyes of hackers. Hardware wallets work by signing transactions internally, never exposing the private keys outside of the device itself. 

Hardware wallets are a good option for savings you are not likely to need immediately. Remember to write down the seed phrase for this type of wallet as well. Give Trezor or KeepKey a try and keep your Bitcoin Cash safe and sound.

Paper Wallets

Feeling old school? Go for a paper wallet. Just print out your public and private keys, stash them away, and voila! Your Bitcoin Cash is safe from cyber-attacks. Again, you should back up the seed phrase for paper wallets, too.

So, there you have it. Whether you’re a software guru, a security fanatic, or a paper-loving traditionalist, there’s a storage solution for you. Keep those precious coins safe and sound.


Key Takeaway: 


To securely store your Bitcoin Cash (BCH), follow the fundamental principle of being your own bank and controlling your private keys. Software wallets offer convenient accessibility on your devices, but remember to back up the private key seed phrase. Hardware wallets prioritize security by keeping private keys offline, making them a suitable choice for long-term savings. Paper wallets, a more old-school approach, involve printing and storing public and private keys physically. Choose the storage method that aligns with your preferences and needs to ensure the safety of your BCH.


Next Steps

If you’ve come this far you might be wondering what to do next. It’s ultimately up to you, but the options are many! Whether you’re looking to spend, invest, learn more, or innovate; here are a few ideas for you to start with.


If you’re wondering where you can support the ecosystem and spend your Bitcoin Cash, there are a few ways to find businesses that accept it.

AcceptBitcoin.Cash allows visitors to peruse many stores and businesses that accept Bitcoin Cash. You can browse hundreds of merchants by category. Search through lists of payment solutions, entertainment options, dining and more!

Map.Bitcoin.com allows visitors to view merchants that accept Bitcoin Cash on an interactive map of the world. Zoom in on any location to see any BCH-accepting businesses nearby. Cash-Map.org is another similar service. Now you can be prepared with Bitcoin Cash no matter where you are!

BitcoinCash.org also lists several services that accept Bitcoin Cash. Feel free to peruse their list and go shopping!

Learn More

The Bitcoin Cash community is large, decentralized, and diverse. But there are a few major forums you can use to communicate and become more involved.

The Bitcoin Cash Telegram channel is a very active chat. Bitcoin Cash-centered news is shared daily, ideas are passed around, and a wide range of related discussions take place. Whether you’re simply curious about current events in the ecosystem or if you want to actively participate in Bitcoin Cash development, it’s a great place to start.

r/BitcoinCash is a popular subreddit to discuss news and ideas about Bitcoin Cash. With thousands of subscribers and new posts every day, you’ll be able to stay updated on most new announcements.

For more technical discussions about the Bitcoin Cash protocol and other infrastructure, go to bitcoincashresearch.org. It’s a forum for everyone who has a desire to make improvements to Bitcoin Cash.


Key Takeaway: 


After getting familiar with Bitcoin Cash, you have various options for your next steps. You can support the ecosystem by spending your Bitcoin Cash at numerous businesses listed on platforms like AcceptBitcoin.Cash, Map.Bitcoin.com, and BitcoinCash.org. To enhance your understanding and engagement, you can participate in the active and informative Bitcoin Cash Telegram channel for news, discussions, and development participation; or join the Bitcoin Cash community discussions on r/BitcoinCash, a subreddit fostering open dialogue; or get involved in technical discussions at BitcoinCashResearch.org.



Bitcoin Cash stands as a beacon of financial empowerment and freedom in an ever-evolving digital world. Its vision of a decentralized, peer-to-peer cash system resonates with the core principles that initially ignited the cryptocurrency revolution. With its affordable fees, lightning-fast transactions, and unwavering commitment to Satoshi Nakamoto’s original ideas, Bitcoin Cash invites you to join the movement and experience a new era of financial possibilities.

Imagine a world where your transactions are not subject to exorbitant fees or delayed for days on end. Imagine a world where no central authority can interfere with your financial freedom. Bitcoin Cash offers a solution, allowing you to embrace the power of digital currency without compromising on speed or affordability. Whether you’re making micro-transactions or engaging in smart contracts, Bitcoin Cash provides a platform for seamless, borderless financial interactions that transcend traditional limitations.

Moreover, Bitcoin Cash has the potential to reshape our economic landscape, unlocking opportunities for global financial inclusion and individual sovereignty. Its large and growing network of merchants and increasing acceptance worldwide is a testament to its relevance and potential impact. As fiat currencies fluctuate and financial systems face uncertainties, Bitcoin Cash remains steadfast, offering stability and control over your own money.

So, I invite you to embark on this transformative journey with Bitcoin Cash. Dive into the world of digital transactions unburdened by excessive fees. Explore the realm of smart contracts and tokenized assets. Join the thriving community of individuals and businesses that have already embraced this financial revolution.

Don’t wait for the world to change. Be the change. Try Bitcoin Cash today and experience a new paradigm of financial liberation.

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