Bitcoin Cash is a split of the main chain of Bitcoin after some users did not fully agree with the implementation of Segwit. While initially most people considered Bitcoin Cash like any other altcoin in the market, and would fade from memory. It soon became clear based on its increase in market cap that Bitcoin Cash was here to stay!
There is currently no way to buy BCC/BCH directly. So the only way to buy BCC/BCH is to purchase BTC to use on an exchange, and then switch it to using Binance.
Step 1: Choose Your Trading Platform
Firstly you will need to decide on your cryptocurrency trading platform and create an account there. The choice of platform isn’t very important as a beginner, what really matters is a trading platform that you are comfortable using..
Choose one of these platforms and complete the follow steps to get started:
Once your account has been confirmed, log in to your Binance account and click on funds at the top right, then “Deposits Withdrawal”.
Look in the “Bitcoin” list and click the Bitcoin deposit button. Then a series of numbers appears in the “BTC Deposit Address:” field. You must copy this series for the next step. This is your bitcoin wallet address.
In the Balances page you will to search for Bitcoin in the list. If all goes well, you will find it at the top.
Next click on the option of Bitcoin and then on the next page copy the Deposit Bitcoin (BTC) address, which the set of numbers and letters.
You’re told that you’ll need a trade password, you can create it and then go back to your Balance.
You need this address for the next step.
STEP 2: BUY BTC
The second step is to get your Bitcoin, you can do that at a broker such as BTCdirect .
If you’re buying BTC for the first time from these brokers, you will be asked to confirm your bank account.
Upon payment you will be asked to enter a bitcoin address. You must fill in the address that you have copied at Binance.
STEP 3: WAIT UNTIL YOUR BTC HAS ARRIVED
Once you have purchased Bitcoin and entered the correct BTC deposit address with the payment, you have to wait until the BTC arrives in your wallet.
This process can take up to ½ hour, so don’t worry if it’s not immediately visible on the exchange.
STEP 4: BUY BCC/BCH
Once your Bitcoin has arrived at your trading platform, it’s time to buy some BCC.
Once on the BCC/BTC trade page you can look in the left box marked with Buy BCC. Here you can decide how much BCC you want to buy using your Bitcoin.
If you then press Buy BCC your order will be placed. When the order is filled you will see your number of BCC on the right-hand box or on your balance page.
Once on the BCH/BTC trading page you can indicate in the left box marked with buy BCH. Here you can decide how much BCH you want to buy.
If you then press Buy BCH, and enter your trade password that you created earlier, your order will be placed. Once the order is filled you will see your number of BCH on the right-hand box or in your balance page.
Congratulations you’re now the proud owner of BCC/BCH.
What is Bitcoin Cash?
Bitcoin Cash is a split of current Bitcoin network. Bitcoin Cash’s split was caused by the ongoing discussion regarding the scalability of Bitcoin.
Bitcoin’s scalability problems arose from the fact that each and every Block in its network is limited to the size of 1 MB. Each Block that is bigger than 1MB would automatically be disregarded by the Bitcoin Network.
The 1 MB limitation was created as a measurement against DoS attacks. In such an attack, hackers would create infinitely big Blocks that would congest and paralyze the network. However, everything comes at its own price. The restriction on the size of each Block also meant that Bitcoin had an inherent limitation on how many transactions it could perform. At the moment that number is to just 3 transactions a second.
In the beginning, 3 transactions a second was more than enough to handle stress on the network. However, as the popularity of Bitcoin grew, so did the number of transactions.
All of a sudden the 1 MB Blocksize limitation started creating bottlenecks within the Network, resulting in delayed transactions and also increased fees.
It soon became apparent that a change was necessary to get Bitcoin running smoothly again. However, Bitcoin being a decentralized chain meant that no central institution could force the change onto the network. The only way to change Bitcoin is if everyone is on the same page!
SegWit2x as a solution
The Segregated Witness also known as SegWit2x, was a solution suggested by the majority of the community of Bitcoin. The original concept formulated by dr. Pieter Wuille, aims to separate the signature data from each transaction.
Bitcoin’s transaction data is actually split in two parts, the input and output.
The input is the public address of the sender, while the output is the public address of the receiver. It is good to note that it is possible to have multiple input/outputs within one transaction set.
The biggest chunk of this transaction data is actually the signature data of the input. It is responsible for 65% of total size of the transaction data. The signature data function is to verify if the sender (=input) has enough funds to make the transaction.
Segwit is a process aimed to increase the size of single Block within the Bitcoin network, by separating the signature data from the transaction data. More precisely, the signature data is removed from the input, and put at the end of the transaction. Because of this simple change there is more space within a single Block of the chain. The increase in space means more transaction with a single Block. More precisely this change increases the space of a single Block from 1 MB to slightly below 4MB.
Around July 2017 the majority(= responsible for 80-90% of the computational power of Bitcoin) of the corporations and mining pools voted for the incorporation of Segwit2x.
Not everyone agreed on Segwit2x
Not everyone in the Bitcoin community was behind the Segwit2x implementation. This group of Bitcoin miners and developers was also concerned about the future of Bitcoin, and its scalability. It however, did not share the conviction that Segwit2x would permanently solve Bitcoin’s scalability issues. This group felt that Segwit2x did not try to solve the root of the problem, and therefore the fundamental problems were still present.
Furthermore, this ground felt that the steps that were currently being taken did not correlate with the initial vision shared by Satoshi Nakamoto. The changes being made because by the Segwit2x solution were far from transparent in the opinion of this group.
Because of this disagreement this group decided to initialise a hard fork. With it creating a new cryptocurrency called Bitcoin Cash.
Besides not implementing Segwit2x Bitcoin Cash is practically identical to Bitcoin, with one difference! Bitcoin Cash has a larger Blocksize (= 8 MB). This increase in space within a single Block meant that Bitcoin Cash experiences faster transaction verification, when compared to Bitcoin.