A Beginner’s Guide to Buying Bitcoin Cash
For countless people, Bitcoin is synonymous with cryptocurrency, but there are hundreds of other coins and tokens. In some cases, developers seek to solve problems specific to a popular coin’s code and will duplicate the blockchain with improvements. This is one way that new cryptocurrencies emerge.
In August of 2017, that’s exactly what happened. Bitcoin Cash or BCH launched from a hard fork in the Bitcoin blockchain as its blocks were filling up quicker than new ones could be mined. BCH offered a solution to the slow transaction speed of its predecessor.
This scalability issue was a problem that the BCH fork sought to resolve. To increase transaction speed, this new cryptocurrency implemented protocol changes that allowed more data to be processed in each block. As of May 15, 2018, BCH has upgraded again to a larger block size. This is excellent news as it promises speed for the growing user base.
Bitcoin continues to dominate the cryptocurrency space, though fans of BCH, who believe in its utility and longevity, are increasing rapidly. In some cases, the two camps are a little polarized in their devotion to their favorite coin.
Learning to keep your cryptocurrency safe is the most challenging and crucial aspect of owning it, Therefore, you’ll have to know how to keep your Bitcoin Cash safe inside a wallet.
A cryptocurrency wallet is a software that holds public keys and private keys. These give you access to your BCH, coins or tokens. In truth, your coins will not be stored in this wallet because they don’t really exist physically. Your Bitcoin Cash is on the blockchain, and your private and public keys allow you to interact with your coins, so you can move them around and change them to cash or other cryptocurrencies.
These keys are a series of numbers and letters that are generated each time you create a wallet. Your public key is your receiving address, and your private key allows you to move and convert your coins.
If someone has this private key, they can steal all your BCH off your wallet. Take care in keeping this key secret. Depending on the kind of wallet you choose, you’ll have to take steps to preserve your password or mnemonic phrase with a backup in a separate location. Never take a photo of your private key. Some go as far as to only print out their keys with an older style printer that is not connected to Wi-Fi. Although there are security parameters to follow, a desktop or hardware wallet can aid you in managing this responsibility.
Get a Wallet
It is possible to buy Bitcoin Cash on an exchange before getting a wallet, but this is never a choice for long-term storage as exchanges can get hacked. This has happened already and will most likely occur again. Most seasoned cryptocurrency holders believe if you don’t hold your private keys, you don’t really own your funds.
Of course, if you plan on buying or trading, you’ll want to keep some funds on the exchange for this purpose. The rest needs to be sent to a more secure address.
One of the safest ways to store your BCH is with a hardware wallet. Ledger and Trezor have the most users because they are easy to operate and support a wide range of coins and tokens. The cost is about 100 dollars. Both can store Bitcoin Cash, and as your private keys never leave your wallet, they are ideal for permanent storage. With either of these wallets, you will only have to remember your recovery phrase to restore your funds if you lose your wallet. Even if you forget your storage device password, you could access your BCH with this seed phrase. Similarly, some software wallets have identical features.
Exodus is a free software wallet that you can download onto your desktop. It enables you to store and manage your blockchain assets and also uses Shapeshift, a service that allows you to convert one cryptocurrency into another from your wallet. Exodus is brilliantly designed, but because it is on your desktop, it will never be as shielded as a hardware wallet. Unlike some other desktop wallets, it doesn’t require you to download the whole blockchain onto your computer, and its compatibility with Windows, Mac and Linux increases its appeal. With Exodus, your private keys are stored on your desktop, and your wallet is accessed through a password and mnemonic phrase just like the Ledger and Trezor.
Jaxx is another option that supports Bitcoin Cash, and its software can be installed on your desktop or mobile device. Its intuitive interface makes it an excellent choice for newbies, and Jaxx can also exchange cryptocurrencies in your wallet through Shapeshift.
However, these desktop wallets will never be as safe as hardware ones, and the mobile wallets are much too vulnerable for storage of high values of BCH or other cryptocurrencies, but if you want to spend your coins and tokens, the mobile app is a logical choice. Soon, more of these mobile apps, each with new upgrades and innovations, will be entering the market, and they certainly will have a vital role in the growth and adoption of cryptocurrencies.
Electron Cash is yet another desktop wallet that supports Bitcoin Cash. The security of this type of wallet can be increased by generating your private keys offline. And luckily, most of the desktop wallets offer this choice for an extra wall of security.
In addition, printed paper wallets from downloaded software are considered very secure, especially if you create them when you’re not connected to the internet. You will be printing out a slip of paper with a public key, private key and QR code. Some choose to download the keys to a USB drive instead.
When doing this, make sure you back up your private key or seed phrase. Do not lose these as it’s just like losing cash. If anyone gets copies, they can have all your BCH connected to that wallet. When downloading wallet software, be aware of phishing sites that are masquerading as legitimate ones.
Although there may be small fees to pay to the network when you send BCH, the majority of these software wallets are free. The fees are very small and do not mirror the large fees that financial institutions charge for holding and moving currency. Since you are essentially your own bank, further education on how to keep your coins safe is advisable. Protect your investment!
Don’t brag about your cryptocurrencies or leave your private keys and seed phrases lying about. Your holdings may not be worth much now, but that can change quickly in the volatility of the market.
Find an Exchange
Now that you have learned about wallets, it’s time to purchase some Bitcoin Cash. As this coin increases in value and use, more exchanges will be trading it. The simplest way to buy it is on an exchange that allows the purchase of BCH with dollars, credit cards or debit cards. Transferring funds directly from your bank account bank is just as uncomplicated. When you use an exchange that allows you to buy Bitcoin Cash this way, the process is no more difficult than online shopping.
Coinbase offers this option, and its site is simple to navigate. Presently, it offers Bitcoin, Etherium, Litecoin and Bitcoin Cash. Exchanges that offer a smaller list of trusted cryptocurrencies are slowly adopting BCH, so keep your eyes out for more options for purchasing. Exchanges are adding coins, tokens and new features constantly.
Registration can be speedy, though some exchanges may require a lot of documentation. Sometimes you’re trading within 15 minutes and, other times a few days are needed for verification. For me, Coinbase was very fast. However, I do have a cap on how much currency I can move because of my choice to shorten the vetting period. In my case, this poses little problem as it is the equivalent of two Bitcoin a day.
Additionally, there are quite a few trading exchanges like Binance or Bittrex that allow you to buy BCH, along with a wide selection of tokens and coins. Sometimes you’ll have to first convert your fiat money or supported cryptocurrency into Bitcoin or Etherium by selling and buying. This is easy and can be fun! It’s an introduction to seeing how simple it is to trade. And don’t think you have to buy a whole coin or token. You can buy a fraction of Bitcoin Cash.
As cryptocurrencies gain popularity, new apps and exchanges appear with innovative approaches to purchasing. Abra, a mobile app, is one of these. However, please check these new players for restrictions on which type of currency you can withdraw from the exchange. Some may have to be converted to dollars, euros or Bitcoin before they can be moved off, and if you want to hold your BCH as an investment, this may not be a wise pick at this time.
Moving BCH into Your Wallet
Once you have your BCH, it’s time for you to get it into your wallet for safe keeping. First of all, Bitcoin Cash must be sent to a Bitcoin Cash address, so it’s essential to make sure you open the right wallet.
On the exchange, you will select a withdrawal option, and you will be prompted to enter an address. Paste in the address or use the QR code. You’ll input the address that pops up when you choose the receive funds option in your wallet. This is your public address. It is critical that you double check to make sure you have pasted the full address, and that it is correct. Scrutinizing the first and last few digits proves reliable for most of us.
Above all, make sure you are not using the private key by mistake. That’s why QR codes are so handy. Unfortunately, if you send to the wrong address, those funds may be gone forever, and if you send out your private key, anyone can take the cryptocurrency associated with that key. This is exactly why managing the security of your coins is a large chunk of buying, selling and trading.
Unlike BTC with its scalability limitations, Bitcoin Cash should arrive quickly. If you’re nervous, you’ll be able to follow the status of your transaction using Bitcoin Cash Block Explorer. It is prudent to send a small amount the first time you send BCH to your wallet. Afterward, you can send more once you’re certain you’ve done it successfully the first time.
Although every wallet and exchange have similarities, you will want to learn more about the security and protocol unique to each one you use. There are plenty of tutorials and videos specific to almost every transaction and operation you will think to do. The cryptocurrency space is full of wonderful educators who give their knowledge freely. Take advantage of their generosity!