A Beginner’s Guide to Bitcoin Cash and Tips for Investing in it
Bitcoin Cash (BCH) is both a network of cryptocurrencies and online payment transactions. It was founded in December 2017 as the outcome of a hard Bitcoin fork, with the intention of increasing the amount of transactions in a smaller time window.
There is no doubt that decentralized, peer-to-peer electronic securities are a useful tool toward economic independence, and there’s no question about Bitcoin Cash (BCH) helping you get there. However, it’s always important to stay informed and knowledgeable on all there is to know about BCH.
What Is Bitcoin Cash?
Bitcoin Cash (BCH) holds the framework of a payment network but is also a cryptocurrency. It came about from a hard fork with Bitcoin in 2017 to increase transaction capacity and speed. It is fully decentralised, with no central bank and requires no intervention of third parties.
As Bitcoin Cash was brought out due to a fork with Bitcoin, a common question is what the difference between Bitcoin Cash and Bitcoin is? So, let’s take a look.
Bitcoin Cash VS Bitcoin:
Bitcoin, as well known as it is for being the first coin, has its drawbacks. Its transaction process time is quite slow, and the goal with Bitcoin Cash was to eliminate this. One of the main reasons for its speed is its block size. There is a limit to the size of every Bitcoin block — 1 MB, whereas when Bitcoin Cash was created, it had an 8 MB limit. Today, it’s increased to 32 MB, making it one of the fastest processing coins and allowing for transactions to be completed with more speed.
Bitcoin and Bitcoin Cash differ in their algorithms. This suggests that replication is no longer possible between the two blockchains. There is a repeat and wipeout safety mechanism in place if Bitcoin Cash breaks in the future. With this, it is assumed that all chains will coexist with minimal inconvenience for those involved if a fork happens.
Emergency Difficulty Adjustment (EDA)
Bitcoin cash uses a modern algorithm that aims to guarantee the network’s regular operation should the number of miners shift drastically. This continues to give the cryptocurrency more stability.
Where Did Bitcoin Cash Start?
BCH was started by Bitcoin miners and developers who were similarly concerned with the cryptocurrency’s potential and its capacity to successfully grow. In August 2017, they started what is referred to as a hard fork, which in short, creates a new currency. This established a new and unique blockchain for BCH with its own specs.
As mentioned above, Bitcoin Cash’s most attractive feature was its block size compared to Bitcoin, which brought in the attention of investors from all over. The comparative assessment reveals that while Bitcoin blocks handled 1,000 to 1,500 transactions per block, up to 25.000 transactions per block were able to be handled by Bitcoin Cash.
The cryptocurrency experienced another fork in November 2018, which thus created Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision).
Since its introduction, one of the most popular Bitcoin offshoots has been Bitcoin Cash. A famous investor and Bitcoin adopter, Roger Ver is a Bitcoin enthusiast, describing it as ‘the true Bitcoin.’ Ver was a prominent advocate of Bitcoin as early as 2011, as a way of encouraging economic independence, widely referred to as the ‘Bitcoin Jesus.’
Sceptics On Bitcoin Cash
Volatility is always on the worry list when looking to invest in any cryptocurrency. There is no definite answer to this issue when considering the instability of cryptocurrencies, including Bitcoin Cash. Investing in cryptocurrencies could wipe the money in no time and double it in minutes.
You need to make sure that you are taking all the precautions because of the risks associated with BCH investing. Don’t render more money than you can afford to lose and follow reliable professionals and crypto enthusiasts at all times. In view of the underlying potential, Bitcoin Cash may be a long-term investment opportunity; however, BCH does not remain as relevant if original Bitcoin continues to address all of its problems related to delays and transaction costs.
Read More: Is It Worth Investing In BCH In 2021?
Why Invest In Bitcoin Cash?
There is a multitude of reasons as to why you should invest in Bitcoin Cash.
1. Sustainability and Safe
BCH is reasonably safe and has extremely protected blockchain technologies opposed to other highly unpredictable cryptocurrencies, which avoids any data breaches or loss of funds.
Bitcoin Cash is built on a decentralized peer-to-peer network, much like Bitcoin and Ethereum, which ensures no single dominant person has an excessive amount of power and influence over the digital currency.
BCH provides transaction fees that are basically zero. It implies that without thinking about exorbitant service costs, people can send and receive any amount of money.
4. Dedicated campaigns
Since BCH excludes banking charges from the calculation, using this alternative payment mechanism, vendors may provide better pricing, discounts, and promotions.
Bitcoin Cash uses larger-sized blocks – 32 MB, where miners can process more transactions at a faster rate in a reliable and safe way.
So, what can we expect from Bitcoin Cash in the future? The overall pattern of adoption with Bitcoin Cash as a form of online payment has until now, mirrored the adoption of cryptocurrencies in the payment industry as a whole, implying that it’s restricted.
Bitcoin Cash is one of the four cryptocurrencies you can buy on Paypal. Crypto-payment services such as BitPay, Coinify, and GoCoin also support it. Roger Ver announced the opening of a $200 million ecosystem fund in November 2019 for startups aiming to create software and technologies on top of Bitcoin Cash.
Also the entrepreneur Kim Dotcom has said on Twitter that people should get involved in Bitcoin Cash.
When we look at the chart, we see that in the past few months, the BCH price has risen considerably. It is now struggling to climb beyond the $570 mark. It stays above the moving averages that are seemingly narrower and broader. In the short term, however, the price of BCH could begin to climb as bulls target for a strong $590 for the next resistance.
Bitcoin Cash (BCH) Technical Chart. Source: Prime Investing Cube
How To Invest In Bitcoin Cash?
The easiest way to invest in bitcoin cash is through a digital asset exchange, like eToro. You can buy other cryptocurrencies like Bitcoin, Litecoin, or Ethereum for it or you can use your local fiat currency to buy Bitcoin cash.
If you're looking to invest in Bitcoin Cash, it's important to note that Bitcoin Cash is a digital currency. It’s not as though you purchase shares of BCH and receive dividends; you are exchanging your fiat currency for Bitcoin Cash cryptocurrency. The aim is to increase the value of Bitcoin Cash, in which case you will swap the coins back to dollars (from someone who is looking to exchange).
So where do we begin? You can invest in Bitcoin Cash with crypto exchanges. eToro is the best place where you can buy Bitcoin Cash. eToro offers an inexpensive and friendly platform to enhance your crypto experience.
Ready to invest In Bitcoin Cash BCH?
Tips Before Investing In Bitcoin Cash
1. Keep your BCH secure with a digital wallet
Essentially, digital wallets are small hardware devices where individuals store their cryptocurrencies. For those who intend to carry larger sums, it’s a smart idea to get a hold of a wallet for safekeeping. Each wallet will have private keys which only you will have access to, guaranteeing that safeguard. eToro has launched its authentic wallet eToroX where you can keep your coins safely.
2. Don’t head too far into the ballpark
It’s always healthy to bear in mind that you shouldn’t spend more than what you can afford to lose, particularly when looking to invest in Bitcoin Cash. While prices can be rising and your BCH value can grow, within minutes that value can fall suddenly and can leave you in an undesirable position financially. All cryptos are known for their sudden fluctuations, so keep your emergency funds where they should be, and when the time is right, invest wisely.
3. Think long-term
Unless you’re someone planning on getting into day-trading, it’s wise to look into stashing your BCH for long-term. It poses less risk and allows for you to await high rises in value. With the positive predictions being placed for Bitcoin Cash, it may be worth gaining some patience for some higher rewards.
4. Stay up-to-date
One of the crucial practices to crypto investing is keeping an eye out for trends and signs. Signs will let you know that maybe it’s a good time to get ready to invest. Market trends will help identify how BCH’s performance might be over time and in the near future. However, it’s also good to keep in mind external factors as well.
There are certain indicators that also affect BCH’s prices. Covid-19 can be used as a good example here. While at first, the crypto market curbed in March 2020, the world saw its fame rise as many were fearing risks of inflation as a result.
5. Take into consideration legal aspects
There are now legal frameworks regarding investing in cryptocurrencies in the US. They fall under capital gains and in the case that you profit off of exchanging your BCH, there are tax laws that apply. Capital gains are also dependent on how long you’ve held onto the assets for, so don’t forget to keep a record of your BCH to swerve any issues in the future.
One of the newest cryptocurrency options open to users is Bitcoin Cash. Although it is fresh, it’s still entirely based on Bitcoin, It’s become famous, though, because over time it’s suddenly become easy to reach - so continue to bear this in mind when looking to invest. Know that there is a decent level of risk involved if you’re thinking about investing in Bitcoin Cash. When the price rises, the only way to take advantage of it is selling it.
Start Investing In Bitcoin Cash With eToro
If you looking to start investing in Bitcoin cash, eToro is the best place to do so. eToro is a user-friendly and inexpensive platform providing excellent experiences for crypto investors.
eToro – Best Broker to Buy Bitcoin Cash BCH
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
- Bitcoin Cash was founded in December 2017 as the outcome of a hard Bitcoin fork.
- The biggest difference between Bitcoin and Bitcoin Cash is the block size.
- Bitcoin blocks can handle 1,000 to 1,500 transactions per block, compared to the 25.000 transactions per block for Bitcoin Cash.
- Bitcoin Cash is built on a decentralized peer-to-peer network, much like Bitcoin and Ethereum.
- Price of BCH could begin to climb as bulls target for a strong $500 for the next resistance.
- Roger Ver announced the opening of a $200 million ecosystem fund in November 2019 for startups aiming to create software and technologies on top of Bitcoin Cash.
- Digital wallets are crucial to the safekeeping of your BCH.
- Make a plan and consider tax liabilities when investing in Bitcoin Cash.
If you're thinking about investing in Bitcoin Cash, remember, there is an incredibly high degree of risk involved.
Are you planning on buying or selling Bitcoin Cash?