Bitcoin Cash (BCH) is the most notable fork in Bitcoin's history. On August 1, 2017, at block 478,559, the community split over how to scale: Bitcoin (BTC) kept 1MB blocks and pushed second-layer solutions like Lightning, while Bitcoin Cash raised the block size limit to 32MB, aiming to restore the original vision of peer-to-peer electronic cash.
The Scalability Crisis That Triggered the Fork
By mid-2017, Bitcoin's network was congested. With 1MB blocks filling up, users paid high fees to get transactions confirmed—sometimes several dollars per transfer, and confirmation times stretched from minutes to hours. Bitcoin was becoming 'digital gold' rather than 'digital cash'. The community split into two camps: one favored small blocks + Layer 2, the other insisted on bigger blocks at the base layer. No consensus was reached, and BCH was born.
32MB Blocks and Throughput
BCH expanded the block size cap from 1MB to 32MB, allowing many more transactions per block. This yields a theoretical throughput of about 116 transactions per second, compared to Bitcoin's ~7 TPS. Lower block competition drove fees down, making micro-payments viable. Miners still use the same SHA-256 algorithm as Bitcoin, and block rewards halve roughly every four years, with a hard cap of 21 million BCH.
Security and Mining
BCH relies on proof-of-work (PoW). Miners collect pending transactions, compete to solve cryptographic puzzles, and the winner adds a new block to the chain—earning newly minted BCH plus fees. This process keeps the network decentralized and secure. Because BCH uses SHA-256, ASIC miners can technically switch between BTC and BCH, though large mining pools dominate operations.
Positioning and Use Cases
Unlike BTC's 'digital gold' narrative, BCH positions itself as 'everyday payment money'. Key use cases include: paying for goods and services, global remittances, peer-to-peer transfers, and any scenario where low fees matter. Many merchants accept BCH: online marketplaces (Gamivo), travel platforms (Destinia), hardware wallets (Trezor), and gift card services (eGifter, NOWPayments) that allow users to buy gift cards from major brands like Amazon and Uber Eats. PayPal and Binance Pay also support BCH transactions. Low fees are BCH's main selling point for real-world adoption.
CashTokens and Basic Smart Contracts
BCH goes beyond simple payments. Through the Simple Ledger Protocol (SLP) and the CashTokens upgrade, BCH can issue tokens, NFTs, and execute simple smart contracts like programmable payments. This enables limited DeFi and tokenization use cases, though the ecosystem is far smaller than Ethereum's.
Risks and Competition
BCH faces strong competition from other payment coins (LTC, XRP) and Bitcoin's own scaling solutions like Lightning. Its price is volatile, and liquidity is lower than BTC. In 2018, internal disagreements led to another hard fork, creating Bitcoin SV (BSV), which further split community resources. BCH's future depends on developer activity, merchant adoption, and real demand for low-fee payments.