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Last updated: September 2025

Bitcoin Cash (BCH): Payments Fork Explained

Bitcoin Cash (BCH) emerged as a payments fork from the original Bitcoin in 2017, addressing blockchain congestion through larger block sizes to enable merchant payments and everyday usage. As a hard fork, BCH aimed to fulfill Satoshi Nakamoto's vision of peer-to-peer electronic cash, prioritizing scalability, transaction speed, and lower transaction fees over decentralization concerns. This guide explores the differences vs Bitcoin, technical differences, and use cases in merchant payments, highlighting tradeoffs in network scalability and token adoption.

History: The Scaling Debate & Hard Fork

The Bitcoin Cash (BCH) story began with the bull market of 2017, when blockchain congestion led to high transaction fees and long transaction confirmation times, peaking at nearly $40 per transaction. Advocates argued that Bitcoin's 1 MB block size limit was unfit for micro-transactions and everyday usage, contradicting Satoshi Nakamoto's white paper vision. The proposed solution was a hard fork to increase block size to 8 MB (later 32 MB), enabling higher transaction throughput and scalability. On August 1, 2017, the hard fork split the blockchain, creating Bitcoin Cash (BCH) as a clone with different consensus rules. This payments fork aimed to be digital cash for peer-to-peer transactions, while Bitcoin focused on store of value as digital gold. BCH underwent another hard fork in 2018, leading to Bitcoin SV (BSV), a hybrid combining elements of both.

Technical Differences: Block Sizes, Fees & Scalability

Block Size & Throughput

Bitcoin Cash (BCH) uses 32 MB block sizes versus Bitcoin's 1 MB, enabling 61-200 TPS (transactions per second) compared to 3-7 TPS. This larger block sizes support higher transaction throughput and network scalability for merchant payments.

Transaction Speed & Fees

With larger block sizes, BCH offers faster transaction confirmation times and lower transaction fees, ideal for point-of-sale (POS) transactions and everyday usage. Bitcoin remains slower and costlier, suited for store of value.

Mining & Difficulty Adjustments

Both use Proof of Work, but BCH employs emergency difficulty adjustment every 6 blocks versus Bitcoin's 2016 blocks. This difficulty adjustment adapts to network hash rate changes, maintaining decentralized mining and equitable mining power distribution.

Smart Contracts & Token Issuance

BCH supports smart contract functionality natively and uses Simple Ledger Protocol (SLP) for token issuance, while Bitcoin relies on Omni Layer or Taproot upgrade. This enhances compatibility with existing infrastructure.

Use Cases & Adoption: Merchant Payments & Everyday Transactions

Merchant Payments & POS

Bitcoin Cash (BCH) excels in merchant payments with fast confirmation times and low fees, enabling point-of-sale (POS) transactions. Merchants accept BCH for everyday purchases, reducing barriers to cryptocurrency adoption.

Peer-to-Peer Transactions

Focusing on peer-to-peer transactions, BCH serves as digital cash without intermediaries, aligning with Satoshi Nakamoto's original vision. This supports micro-transactions and everyday usage in market volatility scenarios.

Adoption Challenges

Despite advantages, BCH faces token adoption hurdles due to Bitcoin's dominance as digital gold. Scalability benefits attract developers and businesses, but decentralization tradeoffs limit widespread use.

Conclusion

Bitcoin Cash (BCH) represents a pivotal payments fork in cryptocurrency history, prioritizing scalability and merchant payments through larger block sizes and faster transaction speeds. While differences vs Bitcoin highlight tradeoffs in decentralization and security, BCH's focus on everyday usage and peer-to-peer transactions positions it as a viable alternative for digital cash. As blockchain evolves, BCH's network scalability and token adoption will determine its role in the crypto ecosystem.

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Bitcoin Cash BCH Payments Fork Block Size Merchant Payments Hard Fork Scalability Transaction Fees Peer-to-Peer Digital Cash

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