More and more, cryptocurrencies are becoming a medium of exchange. But they’re not your average dollar.

Cryptocurrency—or digital currencies that are based on blockchain technology—is a thing of the present, and the future. With Bitcoin prices soaring and more cryptocurrencies coming online, this new, digital financial instrument is drumming up more interest than ever. 

Investors these days are wondering if it’s too late to invest in Bitcoin. And, if so, what are the other options available to investors who want to buy cryptocurrency?  

Big banks are also trying to figure out how to modernize and innovate for the purposes of meeting customer interest in cryptocurrency. This has some banks creating their own currency exchange networks. Silvergate Capital’s Silvergate Bank, for example, offers the Silvergate Exchange Network (SEN), a digital payments network that facilitates 24/7 transfers of cryptocurrency. 

Others, like J.P. Morgan Chase, are launching their own digital coins. Still others are providing services to manage the new currency. In early 2021, the Bank of New York Mellon, the nation’s oldest bank, announced that it would begin financing bitcoin and other digital currencies. It is the first traditional bank to offer services for digital assets. 

Since they were first introduced, cryptocurrencies have developed into an alternative high-risk asset for affluent investors. As a financial innovation, they appeal to customers because they allow for real-time value movement, improving transaction speed and removing limitations on business hours.

Here’s what investors should know about the Bitcoin Cash and how is it different from Bitcoin.

What Is Cryptocurrency?

In order to describe Bitcoin Cash, it’s important to understand its predecessor, Bitcoin. 

Unlike paper bills (fiat), cryptocurrency is strictly digital. Instead of a centralized bank monitoring currency purchases and exchanges, cryptocurrency “uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.” Each transaction is recorded on a global public ledger recorded via blockchain technology. 

Bitcoin was first described by an anonymous person(s) who went by the name Satoshi Nakamoto in 2008. Bitcoin was later released publicly in 2009. Although blockchain was first thought of as far back as 1991, it was really only first implemented as a currency model in 2009, the birth of Bitcoin. 

Bitcoin is fundamentally different from other commodities. These days, it is typically used as an investment and exchange platform. (While it can be used to complete certain types of online purchases, these tend to be more complicated than paying with dollars.)

Bitcoin also allows for anonymity, as no central entity verifies buyers and sellers. Rather, the blockchain allows the ledger to be peer-to-peer, with no one entity maintaining ownership or control over the ledger. 

A signature feature of Bitcoin transactions is that they have low fees and lots of flexibility. Think no more waiting two business days for a transaction to clear. 

And, in the case of Bitcoin, there is a fixed amount of 21 million available. That nulls the issue of inflation that other currencies are subject to. 

But, that fixed number, an increase in demand, and a flux in transaction fees is in part is what led to Bitcoin Cash…

In the years following Bitcoin’s launch, the cryptocurrency evolved from a fringe boutiquey interest to a more mainstream purchase and investment. As Bitcoin began to capture more and more interest from the general public, the blockchain technology that was pivotal to the use of the currency faced major challenges, resulting in increasing fees and less reliable transactions. 

Out of that problem, Bitcoin Cash was born. Created on August 1, 2017, Bitcoin Cash was designed to help solve these scalability issues. In the world of blockchain it is considered a “hard fork,” or basically a new coin. 

There are only 21 million units of Bitcoin Cash available in total, similar to Bitcoin. A major difference, however, is that Bitcoin Cash has larger blocks (between 8 MB and 32 MB), which allows space for more transactions per block. These larger blocks also make the system faster and more reliable. 

Why Invest in Cryptocurrency?

The cryptocurrency market has yet to mature, but when it does, you might be happy that you decided to stuff your digital wallet with Bitcoin Cash in the early days. 

Even now, to do so, you’ll have to dish out big bucks. As of March 16, 2021, 1 unit of Bitcoin Cash had the cash equivalency of about $523.

But, that’s much more affordable than the original Bitcoin. As of late February 2021, one Bitcoin was selling for $47,032.52. As of January 30, 2021, there were only 2,385,193 bitcoins remaining available for mining.

Bitcoin Cash, on the other hand, entered the market at $900 and has since reached an all-time high of $3,785.82. While the price of Bitcoin Cash in late February 2021 was about $515.93, predictions put Bitcoin Cash at higher than that, reaching $738.03 by December 2021. 

Bitcoin Cash is faster and cheaper, at about $0.20 per transaction. (Bitcoin transactions cost about $25 per transaction, but fees have reached as high as $60.)

While Bitcoin Cash isn’t valued nearly as high as Bitcoin, Bitcoin Cash is still one of the top ten cryptocurrencies in the world. 

The cryptocurrency world is still relatively new, but in many ways, Bitcoin has set the standard for these currencies. It is anticipated that in the long-term, Bitcoin Cash has the ability to take on some of Bitcoin’s market share, eventually becoming the most dominant cryptocurrency. 

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