Bitcoin Cash: What is it and How to Buy Bitcoin Cash in Canada
This guide will cover Bitcoin Cash, a fork of Bitcoin and a prevalent digital currency in today’s market. It aims to provide an overview of the digital currency for both experienced digital asset traders and newcomers to the space.
What is Bitcoin Cash?
The first thing that is important to note about Bitcoin Cash (BCH) is that it is different from Bitcoin (BTC). Bitcoin is credited as being the world’s first decentralized digital currency, while BCH came out in 2017 as an ideological split of the platform.
Like Bitcoin, BCH serves as a trustless and permissionless payment platform, allowing users to send or receive money without the use of a centralized party like a bank or financial services company. However, there are many features that separate BCH from Bitcoin.
Why was it created?
Bitcoin Cash is one of many hard forks of Bitcoin, and is its own, separate digital currency. A ‘hard fork’ is a process in which developers take an existing piece of open-source software (such as the Bitcoin client) and create a new version with their desired changes.
In this system, Bitcoin and Bitcoin Cash exist on different blockchains, meaning that transactions are entirely separate. To trade between Bitcoin and Bitcoin Cash you would essentially be converting from one currency to another, similar to if you were to trade between CAD and USD.
Bitcoin ABC is credited as being the first implementation of the BCH protocol. It was unveiled by Amaury Séchet at a Bitcoin conference in the Netherlands. Later, other projects released BCH compatible software, and the currency took off from there.
Developers created the protocol to address facets of Bitcoin’s platform that they were unhappy with. When it launched, BCH inherited Bitcoin’s entire transaction history, but all transactions since then are entirely separate.
How does it work?
At its core, BCH functions the same way as Bitcoin. It uses a decentralized network of nodes to verify transactions and add then to the blockchain. However, Bitcoin Cash distinguishes itself from Bitcoin through the changes that were made to the platform.
One of Bitcoin Cash’s biggest changes is that it significantly increased the maximum block size of the platform. This was a largely contentious issue in the digital currency community, as Bitcoin proponents were divided on if a larger block size was an appropriate issue to the platform’s scaling issues.
Bitcoin Cash, however, implement these changes as well as others like a system for modifying the block creation difficulty, and modification of the transaction signature hashing algorithm.
Is it legal in Canada?
It is completely legal to hold, mine, and trade Bitcoin Cash in Canada.
Why should I use it?
Much like the discussion around increasing Bitcoin’s block size, BCH is a somewhat contentious digital currency.
Opponents criticize the platform for having a similar title to Bitcoin, stating that it may cause confusion among investors.
Proponents, on the other hand, use it for several reasons. Firstly, many of these proponents believe that the changes that the platform made are necessary for its growth. Currently, Bitcoin suffers from high transaction fees and slow transaction times during network congestion, as part of broader scaling issues.
Many chose to use BCH for theological reasons or because of quicker transaction times. Like many other digital currencies, it serves a way of sending or receiving money without the drawbacks that arise through the use of a bank or financial service.
How do I buy and sell Bitcoin Cash in Canada?
There are several ways to easily and quickly trade Bitcoin Cash in Canada.
Using an Online Exchange: Bitcoin Cash is one of many supported digital currencies on Coinsquare. Alongside similar exchanges, Coinsquare provides a quick and effective method of purchasing digital currencies in Canada.
In order to comply with Know Your Customer (KYC) obligations in the country, digital currency exchanges require information that can be used to verify your identity.
Through the use of digital currency exchanges, users can easily trade digital assets through placing buy or sell orders, making them an attractive option for those looking for a hassle-free experience.
Using a Bitcoin ATM: Users also have the option of going to a physical Bitcoin ATM in order to purchase Bitcoin with a cash or card. However, the user would then need to trade Bitcoin for Bitcoin Cash on an exchange or trading platform.
This may be preferable for some, but would incur higher costs due to both the ATM fee, and the associated cost with converting Bitcoin to Bitcoin Cash.
Using Gift Cards or Vouchers: Flexepin vouchers can be bought at thousands of retail locations in In Canada and used on exchanges like Coinsquare. These vouchers allow users to purchase currencies like Bitcoin Cash. This method also has a higher fee than using an exchange directly, but is favoured by some due to its convenience.
How do I store it?
Just as you would likely store cash in your wallet, Bitcoin Cash needs to be kept in a digital currency wallet. These take the forms of either programs or physical devices that retain important information like your private key.
Keeping your wallet safe is vital to ensuring that your funds are not lost or stolen. You’ll need to find a digital currency wallet that supports Bitcoin Cash (BCH), however these are quite popular due to its current market relevance.
When purchasing Bitcoin Cash or a different digital currency through Coinsquare’s exchange, you are automatically assigned your own web-based wallet to secure your funds. You can easily transfer funds from your web-based wallet to another digital currency wallet of your choice, or simply leave them in the online wallet if it proves more convenient.
Additional links for Bitcoin Cash
Image credit: Bitcoin Cash logo
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