CoinClear

Bitcoin Cash

5.2/10

Bitcoin's big-block fork that prioritizes cheap on-chain payments but has lost significant mindshare and hashrate since its 2017 split.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Bitcoin Cash emerged from the contentious Bitcoin scaling debate in August 2017. Led initially by figures like Roger Ver and mining pools like Bitmain, BCH increased the block size limit to 8 MB (later 32 MB) to enable more on-chain transactions at lower fees. The project subsequently suffered its own contentious fork in November 2018, splitting into BCH and BSV (Bitcoin SV) during the so-called "hash war." A further split in 2020 created eCash (XEC) when Bitcoin ABC added a mandatory developer tax.

BCH remains committed to the "peer-to-peer electronic cash" vision from Satoshi Nakamoto's original whitepaper, but the repeated splits have fractured its community, diluted its narrative, and diverted development resources across multiple competing chains. Despite this turbulent history, BCH retains a loyal community of developers and users who continue shipping meaningful protocol upgrades. The 2023-2024 era saw renewed technical ambition with CashTokens and ABLA.

Technology

BCH uses Bitcoin's SHA-256 PoW algorithm with a 32 MB block size limit, enabling approximately 100+ TPS theoretically versus Bitcoin's roughly 7 TPS. Blocks are produced every 10 minutes. BCH implemented the ASERT difficulty adjustment algorithm for more stable block times and CashTokens in 2023, enabling fungible and non-fungible tokens natively on-chain without requiring Layer 2 solutions. The CashScript smart contract language adds basic programmability beyond simple transfers.

However, actual block utilization is consistently low, often below 5% of the 32 MB capacity. Most blocks use a small fraction of available space, undermining the large-block thesis. If blocks are nearly empty, the bigger block size is solving a problem that does not exist in practice. Technology is functional but unexciting relative to modern L1 chains. The ABLA (Adaptive Block size Limit Algorithm) upgrade in 2024 further allows the block size to adjust dynamically based on demand, but this addresses a theoretical scaling need rather than present demand. CashTokens is the most interesting recent innovation, bringing token issuance to BCH, but ecosystem uptake has been limited.

Security

BCH shares Bitcoin's SHA-256 mining algorithm, meaning miners can switch between BTC and BCH freely. This creates a persistent 51% attack risk because BCH commands only 1-2% of total SHA-256 hashrate. While no successful attack has occurred on BCH mainnet, the theoretical vulnerability is real and has been analyzed extensively. A well-capitalized Bitcoin miner or mining pool could temporarily redirect hashrate to attack BCH at relatively low cost.

The ASERT difficulty adjustment algorithm, adopted in November 2020, helps stabilize block times during hashrate fluctuations, preventing the wild oscillation issues that plagued earlier BCH difficulty algorithms like EDA and the original DAA. This was an important security improvement. The 2018 hash war with BSV demonstrated governance fragility under adversarial conditions, with both sides weaponizing hashrate for political purposes. The overall security posture is adequate for a medium-cap PoW chain but far weaker than Bitcoin's, and the shared mining algorithm is a permanent structural weakness that cannot be resolved without changing the PoW algorithm entirely.

Adoption

BCH has a dedicated community and reasonable merchant adoption, particularly in North Queensland (Australia), St. Kitts, and parts of South America. Payment processors like BitPay support BCH alongside Bitcoin. The project experienced a brief resurgence of interest around the 2023-2024 CashTokens upgrade.

However, overall adoption has declined significantly from 2017-2018 peaks. DeFi activity is minimal with no notable protocols generating meaningful TVL. Developer activity is a fraction of Bitcoin's or Ethereum's. BCH is available on most major exchanges but trading volume and market cap rank have slipped steadily. Bitcoin Cash Point-of-Sale apps function well for in-person payments, but user counts are modest. The project relies heavily on ideological commitment to the big-block philosophy rather than market-driven demand. Attempts to build an ecosystem around CashTokens show ambition but have not yet attracted significant developer interest.

BCH did experience a notable price rally in 2024, partly driven by ETF speculation and renewed interest from specific market participants. However, this price action was not accompanied by proportional growth in on-chain usage or developer activity, suggesting speculative rather than fundamental demand.

Decentralization

BCH's decentralization is mixed. Mining is dominated by a handful of SHA-256 pools that also mine Bitcoin, including AntPool, ViaBTC, and F2Pool. The development ecosystem is fragmented across client implementations (primarily BCHN since Bitcoin ABC forked to eCash) that have historically conflicted, leading to forks and political infighting. There was no pre-mine; all BCH was distributed via the Bitcoin UTXO snapshot at the August 2017 fork, inheriting Bitcoin's existing distribution.

Node count is modest but sufficient for network operation. The small mining share relative to Bitcoin means fewer participants secure the network. Governance is informal and community-driven but has been contentious. The lack of a funded foundation or treasury (unlike Decred or Dash) means development relies on volunteer effort, sporadic donations, and a few dedicated companies like General Protocols. This is both a decentralization strength (no single entity can capture the protocol) and a practical weakness (limited resources for marketing, development, and ecosystem growth).

Tokenomics

BCH mirrors Bitcoin's supply schedule: 21 million max supply with halvings every four years. The last halving occurred in April 2024, reducing the block reward to 3.125 BCH. There was no pre-mine or ICO. All BCH was distributed to existing Bitcoin holders at the fork, a clean and fair distribution model.

However, BCH has steadily lost value relative to BTC, declining from approximately 0.2 BTC at the August 2017 fork to roughly 0.005 BTC by 2025, reflecting overwhelming market consensus that BTC won the Bitcoin brand war and store-of-value narrative. Transaction fee revenue is negligible given low on-chain demand, raising long-term security budget concerns. As block rewards continue to halve, BCH will face increasing difficulty incentivizing miners without meaningful fee revenue. Bitcoin faces this same challenge but with vastly more hashrate and economic weight to buffer the transition.

Risk Factors

  • Hashrate vulnerability: 1-2% of SHA-256 hashrate makes 51% attacks economically feasible for large miners.
  • Declining relevance: Market cap, developer activity, and community size continue to erode year over year.
  • Community fragmentation: History of contentious forks (BSV, eCash) has permanently fractured the original community.
  • Security budget: Low fees and declining block rewards threaten long-term miner incentives.
  • Competition: Stablecoins, Lightning Network, and faster L1s serve the payment use case more effectively.
  • Empty blocks: Large block capacity is unused, undermining the core big-block scaling narrative.
  • Developer scarcity: Small development team limits pace of innovation and bug-fix responsiveness.

Conclusion

Bitcoin Cash represents an intellectually honest vision of Bitcoin as peer-to-peer electronic cash. Its technology works as designed: fast, cheap, on-chain payments with larger blocks. However, the market has largely rejected the big-block approach in favor of Bitcoin's layered scaling strategy. Declining hashrate, fragmented community, and minimal ecosystem growth leave BCH as a legacy project sustained by ideological commitment rather than organic demand. CashTokens and ABLA show the community still ships meaningful upgrades, but reversing BCH's long decline requires a catalyst that has not yet appeared.

The BCH community's determination to build a peer-to-peer electronic cash system is ideologically pure but commercially challenged. The lesson of Bitcoin Cash may be that in crypto, as in other technology markets, network effects and brand dominance matter more than technical specifications. BCH had the right technical arguments about on-chain scaling but lost the narrative war to Bitcoin's store-of-value thesis and Lightning Network promise.

Looking forward, BCH's best hope lies in CashTokens creating an on-chain token ecosystem that generates organic demand for block space. If BCH blocks begin filling with meaningful token activity, the large-block thesis would finally be vindicated in practice. Until then, BCH remains a functioning but underutilized payment network, waiting for the demand that its infrastructure was built to serve.

The broader lesson from Bitcoin Cash is that winning the technical argument is not sufficient in crypto. Community cohesion, brand narrative, ecosystem development, and network effects ultimately matter more than block size parameters. BCH had the right technical answer to the wrong question: the market wanted a store of value, not faster on-chain payments.

Sources

  • Bitcoincash.org documentation and upgrade specifications
  • Coin Dance BCH block and node statistics
  • BitInfoCharts hashrate comparisons (BTC vs. BCH)
  • CashTokens specification and ecosystem tracker
  • BitPay payment volume reports
  • BCHN client release notes and development roadmap
  • Messari BCH research profile
  • CashScript smart contract language documentation
  • BCH network transaction volume and block utilization data
  • General Protocols and other BCH ecosystem companies
  • Roger Ver and key BCH advocacy history
  • ABLA adaptive block size algorithm specification