Bitcoin Cash: A Comprehensive Guide to Its History, Forks, and Evolution

·

Bitcoin Cash (BCH) is one of the most notable cryptocurrencies to emerge from a high-profile hard fork of Bitcoin (BTC). Designed to fulfill the original vision of peer-to-peer electronic cash, BCH was created to address Bitcoin’s growing scalability challenges. This article explores the origins, major developments, and key forks in the Bitcoin Cash ecosystem, shedding light on its technical evolution and community dynamics.

The Birth of Bitcoin Cash

Since Bitcoin’s inception on January 3, 2009, its popularity has grown from niche tech circles to mainstream adoption. However, as user activity surged, so did transaction volumes—leading to network congestion, high fees, and slow confirmation times.

Bitcoin’s 1MB block size limit restricted the number of transactions per block, capping throughput at roughly 4–7 transactions per second (TPS). Compared to centralized payment systems like PayPal or Alipay, this performance was inadequate for daily use as digital cash.

👉 Discover how blockchain networks scale to meet growing demand

By 2015, debates over scalability intensified within the Bitcoin community. Miners and many users advocated for increasing the block size to improve on-chain capacity. In contrast, Bitcoin Core developers favored off-chain solutions such as Segregated Witness (SegWit) and the Lightning Network to alleviate congestion without altering block size.

These opposing views sparked years of debate. Unable to reach consensus, the community eventually split. On August 1, 2017, at block height 478,558, a hard fork occurred. Six hours later, ViaBTC mined the first Bitcoin Cash block (478,559), marking the official launch of BCH.

Bitcoin Cash inherited Bitcoin’s transaction history and distributed BCH to BTC holders at a 1:1 ratio. It removed SegWit and increased the block size limit to 8MB—later expanded to 32MB—to enable faster, cheaper transactions through on-chain scaling.

Core Keywords

These keywords reflect the central themes of Bitcoin Cash’s development: solving transaction bottlenecks, maintaining decentralization, and preserving the utility of cryptocurrency as everyday money.

The 2018 Fork: Bitcoin Cash Divides Again

Despite achieving initial stability, internal disagreements resurfaced in 2018. The Bitcoin ABC team—the primary development group behind BCH—proposed a roadmap focusing on two goals:

  1. Further increasing block size to 32MB.
  2. Reintroducing or enabling certain Bitcoin script opcodes to support smart contracts and decentralized applications (dApps), making BCH more programmable.

However, Craig Wright (CW), who claims to be Satoshi Nakamoto, strongly opposed these changes. He argued that Bitcoin’s original protocol was already perfect and should not be altered beyond increasing block size. His vision emphasized massive on-chain scaling and protocol immutability.

To realize this vision, Wright’s company nChain launched a new client called BSV (Bitcoin Satoshi Vision). On November 15, 2018, Bitcoin Cash hard-forked into two chains:

This split was not just technical—it reflected a philosophical divide: innovation versus purity.

BSV continued pushing for larger blocks. On July 24, 2019, it executed another hard fork, increasing its block size limit to 2GB, far surpassing other blockchains. Days later, a 256MB block was successfully mined on the BSV chain—the largest ever recorded at the time.

Thus, the Bitcoin family tree expanded into three major branches: BTC, BCH, and BSV—each representing different visions of what cryptocurrency should become.

The 2020 Infrastructure Funding Plan Controversy

In 2020, another major conflict emerged within the BCH ecosystem—this time centered around funding development.

The Bitcoin ABC team proposed an Infrastructure Funding Plan (IFP), which would allocate 8% of each block reward to a fund supporting core developers and ecosystem growth. The goal was to ensure sustainable development without relying solely on donations or corporate sponsorship.

However, many miners and community members viewed this as a "miner tax." They argued that developers should not unilaterally decide how block rewards are distributed and that such a mechanism could centralize control.

Two competing visions emerged:

The BCHABC Camp

Supporters of IFP believed it was essential for long-term sustainability. They emphasized that while 8% of rewards would be redirected, mining profitability would only decrease by about 0.2% due to dynamic difficulty adjustments. They integrated IFP into version 0.21.0 of their node software.

The BCHN Camp

Led by early BCH developer Freetrader, this group launched Bitcoin Cash Node (BCHN)—a client that rejected IFP and prioritized miner autonomy. BCHN promised to maintain protocol stability and avoid forced contributions.

As the November 15, 2020 fork date approached, mining support became decisive. In the final week before the split:

Clearly, the mining community favored BCHN.

When the fork occurred at block height 661,648, BCHN gained overwhelming hash rate support and became widely recognized as the legitimate continuation of Bitcoin Cash. Today, when people refer to "BCH," they typically mean the chain following the BCHN implementation.

👉 Learn how consensus mechanisms shape cryptocurrency governance

Understanding the Philosophy Behind Bitcoin Cash

At its core, Bitcoin Cash is built on the belief that on-chain scaling is the best path to global adoption. Unlike networks that rely heavily on layer-2 solutions, BCH aims to keep transactions fast and cheap directly on the main chain.

This design supports real-world usability:

While critics argue that large blocks may lead to centralization (due to higher storage and bandwidth requirements), proponents counter that technological progress will mitigate these concerns over time.

Moreover, by rejecting SegWit and complex layer-2 systems, BCH maintains a simpler architecture—appealing to users who value transparency and ease of verification.

Frequently Asked Questions (FAQ)

What is Bitcoin Cash?

Bitcoin Cash (BCH) is a cryptocurrency created in 2017 through a hard fork of Bitcoin. It increases block size to improve transaction speed and reduce fees, aiming to function as peer-to-peer electronic cash.

How is BCH different from BTC?

The main difference lies in scalability. BTC uses small blocks (1MB effectively) and relies on off-chain solutions like Lightning Network. BCH uses larger blocks (up to 32MB) for on-chain scaling, allowing more transactions per second at lower costs.

Did Bitcoin Cash have multiple forks?

Yes. Major splits include:

Is Bitcoin Cash still active?

Yes. BCH remains among the top cryptocurrencies by market capitalization and continues regular protocol upgrades through community-driven development.

Why did the IFP cause controversy?

The Infrastructure Funding Plan redirected part of block rewards to fund developers—a move seen by many miners as involuntary taxation. Lack of consensus led to the 2020 fork.

Can I use BCH for payments?

Absolutely. Many merchants accept BCH globally due to low fees and fast confirmations. Several payment processors integrate it seamlessly into point-of-sale systems.

👉 Explore how digital currencies are transforming modern commerce

Conclusion

Bitcoin Cash represents a bold experiment in blockchain scalability. Born from ideological differences over how best to scale Bitcoin, it has weathered multiple forks—each reflecting deeper debates about decentralization, governance, and funding models.

From its 2017 launch to the pivotal 2020 split, BCH’s journey illustrates how technical decisions are inseparable from social dynamics in open-source ecosystems. While it may never surpass Bitcoin in value or mindshare, it continues to serve as a viable alternative for those who believe in on-chain scaling as the foundation of digital cash.

As blockchain technology evolves, Bitcoin Cash remains a relevant case study in decentralization, community consensus, and the ongoing quest for a truly usable cryptocurrency.