By now, you've probably already heard at least something about Bitcoin. It's the most successful digital currency ever and it shot to fame with its impressive price run in the second part of 2017. Of course, it isn't the only cryptocurrency around. A look over at Coinmarketcap shows that there are well over 1,500 different coins and tokens, some offering more utility than others. One such digital currency is known as Bitcoin Cash.
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Bitcoin Cash - A Basic Introduction
Bitcoin Cash (BCH) is just like Bitcoin (BTC). It's a digital currency that's based on a blockchain. A blockchain is a revolutionary form of database. Rather than exist on a single of computer or server, a blockchain exists on many different machines simultaneously. This “distributed ledger” is Bitcoin and Bitcoin Cash's most exciting feature. It's what gives them both their best qualities. We'll get on to those momentarily though.
Since both BTC and BCH are digital currencies, no one actually owns anything physical when they “own” a single unit of either currency. Both systems are nothing more than a decentralised database. This database, or blockchain, is used to keep track of which wallets can control each of the 21 million coins in existence. Put another way, if Alice sends one Bitcoin Cash to Bob's wallet, Bob can then send that BCH on to Charlie.
These transactions are checked by a system of computers on the network called miners. Anyone can run a mining unit, they just need sufficient computational power. Miners ensure that none of the coins are spent twice. This is much like a bank does when you transfer money from one account to another (they check the funds were there in the first place and update their ledgers accordingly). The difference, and probably most special part of the entire system, is that there is no central authority. Think about if a bank suddenly went insolvent. Those who stored cash there would lose their money and none of that banks customers would be able to transfer any money until they set up a new account elsewhere. If a single miner was no longer able to participate in validating transactions, the system would continue as usual and the affect to the network and all its participants would be non-existent.
Since the system runs without central authorities, it is entirely trust-less. You don't need to have faith in anyone because all transactions are broadcast to the entire network and subsequently checked by it. The lack of authority figure also means that it's a permission-less system. You don't need to ask anyone to setup a Bitcoin wallet, you just need an internet connection. This means that even those who lack traditional banking infrastructure can take part. This is ground-breaking stuff when you consider how many people in places like India have access to mobile phones with 3G internet yet lack any form of identification needed to set up a bank account.
Bitcoin and Bitcoin Cash offer all those unbanked people around the world payment options for a variety of different online services. There's no need for permission, trust, or banks at all. Exciting, huh?
Bitcoin (BTC) vs Bitcoin Cash (BCH)
Wait a Minute, If Bitcoin and Bitcoin Cash are so Similar, Why Does Bitcoin Cash Exist at All?
Bitcoin got so popular during 2017 that the price of transactions rose to the point that the network was unusable for smaller payments. Of course, no one wanted this situation to occur, but the immense popularity of the leaderless currency was too much for the network to handle at the time.
To understand the origins of Bitcoin Cash properly, it's first important that you understand how Bitcoin's fee structure works. All transactions require a fee be paid to the miners to get them to validate it. The problem of high fees occurs when there is a backlog of transactions waiting to be included in each block. The miners automatically select those transactions that include the highest fees (operating mining hardware isn't free and miners essentially running a business after all). This essentially creates a race to the top with transactions requiring ever larger fees to be included by miners.
Bitcoin developers knew that there would come a day when fees made the network unusable for many transactions. Behind the scenes they were bitterly divided about how they could increase the networks capacity. One group wanted to simply create larger blocks on the Bitcoin blockchain. This would allow for more transactions to be processed per second and thus fees would naturally come down. A second group saw an issue with this, however.
The issue with making larger blocks is that it creates centralisation of miners on the network. If you double the size of each block and the network is still at capacity, you now need equipment with twice the storage capacity to download the entire blockchain. Since computer memory isn't cheap, this means that miners who can't afford the costly equipment will drop out and there will be fewer of them securing and protecting the network. Eventually the blocks would have to become so large that only a few machines could store the entire blockchain and thus the network would become vulnerable to attack from outside forces.
A second solution, known as SegWit was proposed by those who were opposed to the block increase. However, consensus between different groups of developers and miners could not be reached. This created a split in the network known as a fork. One of the blockchains that forked off would have the SegWit artificial block size increase and the other would simply have larger blocks. The SegWit chain is what we today call Bitcoin (BTC) and the one with larger blocks is known as Bitcoin Cash (BCH). Somewhat ironically, both chains now have much cheaper fees than during the height of the scaling debate wars last year.
Why Use a Cryptocurrency at a Casino at All?
History lesson out of the way, let's look at why you would want to use any cryptocurrency at an online casino at all. There are plenty of good reasons too!
Borderless and No Middle Man Required
Cryptocurrency payments don't require anyone's permission to use. This is great for those wanting to gamble online for number of reasons:
- Those without access to traditional banks can use cryptocurrency to play at online casinos. This gives more freedom to the planet's entire population, as well as allows casinos to attract greater numbers of players.
- People living in countries with oppressive gambling legislation aren't excluded. Traditionally, if you lived somewhere that forbids gambling, you might find that local banks refuse to transact with online casino companies. This isn't the case with Bitcoin Cash or other cryptos.
- You can withdraw money much faster from on online casino using cryptocurrency payments. Many services don't even require the operator to authorise your payment. This means you can hit withdraw and your funds will be with you in minutes rather than days. The implications of this are huge as it reduces the trust players need have in the casino operator they choose. Rather than keeping huge bankrolls online, they can deposit as and when they need to and withdraw all their funds at the end of a session.
Fewer Overheads for the Casino
Finally, the casino itself doesn't have to pay any fees to credit card companies such as Visa or MasterCard. This might sound like it only benefits the service operators themselves, but these savings can then be passed onto the customer too. Bitcoin and Bitcoin Cash casinos will often have much higher return-to-player ratings than standard casinos. They also offer much juicier bonuses to players too. This is a win/win for casino and player alike!
How to Get Bitcoin Cash
If you're sold on Bitcoin Cash, the next thing you'll need to know is how to get some. There are a couple of different ways. The easiest by far is to buy some by bank transfer or credit card purchase from a service like Coinbase.
Simply create an account, enter your details, and follow the instructions for buying Bitcoin Cash. It's really that easy. You can then create a wallet using a service like Electron Cash or Jaxx and send your crypto coins there. Whether you're planning on using your digital currency at an online casino or not, it's really not a great idea to leave your funds on an exchange like Coinbase. They have been hacked in the past and they will be hacked in the future. It's kind of ridiculous to go through all that effort of understanding and partaking in a trust-less system to then go and trust a centralised service like Coinbase with your money, yet lots of foolish people still do it! Protect your own cryptocurrency and you won't need to rely on anyone else.
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AuthorSharon Kingsby
Sharon lives and breathes online casinos. She answers all your how, why, where questions to make your online gambling journey fun and successful. read more about the author
