Before we talk about Bitcoin Cash (BCC) lets really quickly talk about Bitcoin itself so that you have a bit of a grounding.
What is Bitcoin?
Simply put, Bitcoin is a peer to peer digital currency (the first of its kind, and definitely the largest). Any transactions between users take place directly, without 3 rd parties – like banks – getting in the middle. These transactions are verified by ‘bitcoin miners’ (distributed Bitcoin software on networked computers around the world) and then the information is stored in a public ledger called a block chain (which is basically a distributed database).
The value of the currency fluctuates somewhat wildly, however, there is a set maximum of 21 million bitcoins (new bitcoins are released on a schedule but the amount being released halves every 4 years) so based on scarcity alone, they are worth something!
The Bitcoin wallet is your digital storage medium where you keep all of your bitcoins and you can buy and sell bitcoins through a Bitcoin exchange. More and more merchants accept Bitcoins every day and the speed at which they are jumping onboard is only increasing.
What’s the deal with Bitcoin Cash?
OK now that we’ve got the basics of Bitcoin out of the way, let’s talk about Bitcoin cash. It has not gone the complete opposite way and come up with a paper format of Bitcoin despite how the name may sound.
Bitcoin cash is a ‘fork’ of Bitcoin. This means like a railway track splitting, it’s going in another direction, while the original track that Bitcoin was on, will continue on its course. They will basically be available simultaneously and while they might not be directly competing right now, there is concern that some of the exchanges will not initially be able to support both.
When this fork happens, anyone holding Bitcoins will have an equal number of Bitcoin Cash also, however it very much depends upon the exchange that they deal with if they will be able to utilize it.
Why did they do this?
Well, perhaps unsurprisingly, technology has changed. Bitcoin was initially developed and released in 2009 and in that time the network has been hacked at least once. Bitcoin Cash is planned to offer a larger block size (8MB up from the current 1MB) and will also do away with the controversial SegWit.
When is it happening?
August 1 st is the currently planned deadline for the fork. Right now it does not have that much support from users and miners, but once it is in the wild and with the fact that the release is planned to ensure that users keep both their Bitcoins and Bitcoin Cash it could have enough legs to go the distance.
This is the first time a crypto currency has split in this fashion, so everyone is curious to see what happens. If you have a Bitcoin account, it is probably a good idea for you to check with your exchange to make sure that they will support as you just do not know what is going to happen in the future!