What Is Bitcoin Cash (BCH)? How It Works, Use Cases and Risks

Bitcoin Cash (BCH) is a cryptocurrency that split from Bitcoin in August 2017 to allow bigger blocks, so that more transactions fit on-chain and fees stay low enough for everyday payments. It keeps Bitcoin's proof-of-work mining and its 21 million coin cap, but takes a different approach to scaling.

The split came out of one of the longest disputes in crypto history, often called the "block size wars." Bitcoin Cash supporters argued that Bitcoin should be cheap digital cash first and foremost. Understanding that history explains both what BCH is good at and why it has remained much smaller than Bitcoin.

Origins: The Block Size Debate

Bitcoin's blocks were limited to about 1 MB of transaction data. As usage grew in 2015–2017, blocks filled up, fees rose and confirmations slowed during busy periods.

Two camps formed:

• One favored keeping blocks small so that ordinary users could run full nodes, and scaling through other means such as Segregated Witness (SegWit) and second-layer networks like the Lightning Network.
• The other favored raising the block size so more transactions could be processed directly on the main chain.

When the larger-block approach was not adopted on Bitcoin, its supporters launched Bitcoin Cash. Because it was a fork, everyone who held Bitcoin at the split received the same amount of BCH. Our guide to hard forks vs soft forks explains how this works.

Bitcoin Cash has no single founder or company. Development is carried out by several independent teams and contributors, and miners and node operators choose which software to run.

How Bitcoin Cash Works

Much of Bitcoin Cash's design is inherited from Bitcoin:

Since the 2017 fork, Bitcoin Cash has raised its block size limit, changed how mining difficulty adjusts, re-enabled some scripting features and added native token support known as CashTokens. If Bitcoin SV is new to you, start with what Bitcoin SV (BSV) is and how it works.

Because BCH and BTC use the same mining algorithm, miners can switch between the two chains depending on which is more profitable. BCH's share of that mining power is much smaller than Bitcoin's. Our eCash (XEC) explainer covers the project's basics, use cases and risks.

The Later Splits: Bitcoin SV and eCash

Bitcoin Cash itself has split twice:

1. 1November 2018: A disagreement over protocol direction led to the creation of Bitcoin SV, which pursued much larger blocks.
2. 2November 2020: A dispute over a proposed development funding mechanism led one implementation's supporters to form a separate chain, which later became eCash.

These splits show how hard it is to coordinate upgrades on a network without a central authority, and they divided BCH's community and resources. For background on the project itself, see Dash explained.

What Bitcoin Cash Is Used For

• Peer-to-peer payments. Low fees make small payments practical on-chain.
• Merchant payments. Some merchants and payment processors accept BCH.
• Store of value. Some holders treat it like Bitcoin, as a scarce asset.
• Tokens and simple applications. CashTokens allow tokens and some smart contract features on BCH.

BCH is also used to pay its own transaction fees and is paid to miners as block rewards. Because blocks have more room, fees on Bitcoin Cash have generally stayed low even during busy periods, which is its main practical advantage for small payments. Our Bitcoin Cash price outlook for 2026–2027 looks at the catalysts, risks and bull, base and bear scenarios.

Supply Design

BCH copies Bitcoin's monetary policy. New coins are issued as block rewards that halve roughly every four years, and the total supply can never exceed 21 million. Because both chains share history before 2017, coins mined before the fork exist on both. You can see live supply and price data on the Bitcoin Cash price page.

Risks and Criticisms

• Lower hash rate. BCH is secured by much less mining power than Bitcoin, which in principle makes attacks like a 51% attack cheaper to attempt.
• Larger blocks, heavier nodes. Critics argue that big blocks make running a full node harder over time, which could reduce decentralization if demand grows.
• Adoption. Despite low fees, merchant and user adoption has stayed modest, and stablecoins on fast networks now compete for payments.
• Community splits. Repeated forks have fragmented developers, miners and users.
• Volatility and liquidity. Like other altcoins, BCH can be highly volatile.

For a side-by-side look, read our comparison of Bitcoin vs Bitcoin Cash.

How to Avoid Fake BCH and Costly Mistakes

Bitcoin Cash is a native coin on its own blockchain, so it doesn't have a contract address there. Wrapped or "pegged" BCH tokens on other chains do, and copycats exist.

• Only use wallets and exchanges that clearly support the Bitcoin Cash network.
• Never send BCH to a BTC address or vice versa. Many legacy addresses look similar, which is one reason the CashAddr format exists.
• If you use a token version of BCH on another chain, verify its contract with our guide to verifying a token's official contract address.
• Be wary of "BCH giveaway" and "fork airdrop claim" sites asking for your seed phrase.

Bottom line

Bitcoin Cash is Bitcoin's large-block offshoot, built for cheap on-chain payments and keeping Bitcoin's fixed 21 million supply. It offers low fees and a familiar design, but it has much less mining security, a history of community splits and limited adoption compared with Bitcoin. Understand those trade-offs and always double-check you're using the right network.