- Bitcoin Cash will introduce a major upgrade to its blockchain.
- New CashTokens will enable developers to run smart contracts on its network.
- One core developer claims the network will be 100x more efficient than Ethereum.
Amid major congestion on the Bitcoin and Ethereum networks, traders are begging for upgrades to boost scalability. Bitcoin Cash (BCH), one of the more successful Bitcoin hard forks, could soon deliver an upgrade to outshine both.
The Bitcoin Cash network is gearing up for its own hard fork, set for Monday, May 15. The upgrade will introduce ‘CashTokens,’ an ERC-20-like standard for the network. These tokens will enable Bitcoin Cash to run smart contracts.
According to core developers, this decentralized Proof-of-Work (PoW) blockchain will be more scalable and efficient than Ethereum.
How Will Bitcoin Cash Change After the Hard Fork?
Scheduled for May 15, the ‘Ethereum Killer’ is a hard fork on the Bitcoin Cash (BCH) network. This means that this change to the network protocol will not be compatible with previous chain versions.
The primary feature of the latest Bitcoin Cash hard fork is the introduction of ‘CashTokens,’ which are similar to Ethereum’s ERC-20 tokens. Their introduction is a game-changer for Bitcoin Cash. The upgrade will allow developers to issue tokens directly on the BCH network.
Issuing tokens (and memecoins) on the Bitcoin Cash blockchain is not the most exciting feature of the upgrade. More importantly, CashTokens will enable the blockchain to run smart contracts. This feature will allow developers to build dApps directly on Bitcoin Cash.
Will Bitcoin Cash Be the Ethereum Killer?
So far, Ethereum has remained the most significant smart contract blockchain network. However, congestion issues, high fees, and other issues have led to a series of competing networks. With its latest upgrade, Bitcoin Cash will be one of them.
The hard fork will not just enable Bitcoin Cash to power smart contracts. It will also enable it to harness the built-in scalability of the network, making its smart contracts run efficiently and at a low cost. In particular, one core developer says that dApps on Bitcoin Cash will be 100x cheaper than Ethereum.
Bitcoin Cash developer Jason Dreyzehner claims the network owes its performance to the UTXO accounting model. UTXO stands for “unspent transaction output,” and differs from the account/balance model used by cryptos like Ethereum.
The UTXO model has several features that make it potentially better than the alternative. Each transaction creates a new UTXO, making coins harder to track and boosting privacy. On the other hand, this model also enables parallel transaction processing, allowing for greater scalability.
If Bitcoin Cash becomes a scalable solution for dApps, this could help significantly boost its utility. Rather than just being a decentralized currency, BCH will power an ecosystem of decentralized applications.
On the Flipside
- While Bitcoin Cash developers boast of its scalability, the network has still not seen a substantial test of its performance.
- Despite its similarities to BCH, including its use of the UTXO model, Bitcoin still suffers from network congestion since the creation of ordinals.
Why You Should Care
A decentralized and scalable smart contract network would enable developers to create better dApps, boosting blockchain adoption. This would have a significant impact on the decentralized finance space.
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