Bitcoin cash shares most of its code with bitcoin. But it is significantly faster at processing transactions.
The cryptocurrency is having a moment: It surged more than 11% Thursday, and more than 300% this year, according to Coinbase.
Here’s what you need to know about the bitcoin cousin that’s rapidly growing in popularity.
What is bitcoin cash?
Bitcoin cash was developed in 2017 as a split-off of bitcoin, known as a “fork” in crypto parlance, to solve some of bitcoin’s issues as it grew more popular. Bitcoin, which runs on a decentralized ledger system known as blockchain, can only process a maximum of seven transactions per second, making it a less-than-ideal crypto for everyday transactions.
“Bitcoin cash is the version of bitcoin that implemented an increase in the transaction capacity,” digital currency economist Alex de Vries told CNN Business.
The bitcoin cash creators aimed to raise bitcoin’s block size limit of one megabyte every 10 minutes — which translates to a maximum of seven transactions per second — to eight megabytes every 10 minutes, de Vries said. Bitcoin cash blocks can go up to 32 megabytes.
The creators of bitcoin cash, “wrote an update for the Bitcoin software which increased the transaction limit,” de Vries said, and thus, the new cryptocurrency was born.
Bitcoin cash split in two in 2018, in a similar situation, creating another