Bitcoin introduced us to crypto payments and transactions. Since then, some similar cryptocurrencies which looks like Bitcoin have emerged through changing some aspects of Bitcoin’s source code. This process is known as fork. Forks are splits in the blockchain network and are often carried out to improve or provide greater utility for the network.
When a fork occurs, the blockchain splits into two separate chains. One chain follows the same path of the original code, whereas the second chain creates a new distinct path. There have been several Bitcoin forks since Bitcoin launched in 2009.
One of such forks is Bitcoin Cash (BCH) which was created in August 2017. Bitcoin Cash underwent another fork in November 2018 and split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision).
This article, you will learn about Bitcoin Cash ABC, how it works and the utility of its BCHA token.
What is Bitcoin Cash ABC?
Bitcoin cash ABC (BCHA) is a unique cryptocurrency created from a Bitcoin Cash chain split. In 2020, BCHA’s developers led by Amaury Sechet proposed a controversial Coinbase rule to the Bitcoin Cash network to reinvest 8% of the mining block rewards into the network. This proposal was called the miner’s tax. According to the BCH ABC team, half of the funds would finance the project’s roadmap plans, and the other half would be managed by miners and holders who will decide which projects to invest in.
Following the disagreement among the developers over this proposal, the Bitcoin cash network completed its hard fork on November 15, 2020, splitting the Bitcoin cash network into two new blockchains, Bitcoin Cash ABC and Bitcoin Cash Node.
The crypto community received the fork and Bitcoin Cash ABC with mixed feelings. A year after, in June 2021, a blog post in the Bitcoin ABC website announced that the project is rebranding to eCash. According to the post, eCash would be the natural continuation of the Bitcoin Cash project.
On July 1, 2021, Bitcoin Cash ABC (BCHA) fully rebranded to eCash (XEC) at noon UTC. The rebranding from BCHA to eCash (XEC) didn’t cause any changes on the blockchain and wasn’t a token swap. Instead, it was a change of name and values on exchanges. As a result, the BCHA token became known as eCash/XEC, and the default base unit changed so that 1,000,000 XEC = 1 BCHA.
eCash uses an “Avalanche” Layer Consensus to maintain protocols in the network and offers features never before seen in a Bitcoin project, such as staking, fork-free networks, and upgrades. eCash still uses Bitcoin’s core features: fixed supply, halving schedule, and genesis block. The project’s native token is XEC, and it has the following use cases.
Use Case: Peer-to-Peer Payments and Transactions
XEC is the main cryptocurrency and utility token for the eCash ecosystem, formerly known as Bitcoin Cash ABC. The token was designed to be used as electronic cash. In a sense, XEC functions like fiat, but with better utility as it is decentralized, with low inflation rates. Just like emails were made to send direct messages online, eCash tokens allow holders to make peer-to-peer transactions and also pay for goods and services from anywhere in the world.
eCash users do not need a bank account or credit card company for transactions and payments. All they need is a wallet that can store their XEC tokens.
For instance: John, who is in the US, wants to order some clothes from Chikita, a vendor in South Africa. Usually, sending fiat would cost John more as it is a cross-border transaction. However, all both parties need are XEC tokens and a crypto wallet. With his XEC tokens, John can pay the vendor in one swift and secure transaction that would only cost him about 0 – 0.1 XEC. All transactions arrive instantly in the wallet within seconds.
This positions XEC as the digital currency for everyone the eCash platform aims it to be.
Use Case: Staking and Governance
eCash is the first Bitcoin fork to offer staking rewards to token holders. The XEC token secures the network by providing staking facilities to users. Thanks to the newly introduced Avalanche staking protocols, this feature is operated, facilitating incentivization and eCash governance.
Users have to stake their XEC tokens directly into Avalanche nodes on the eCash platform to gain staking rewards. To run the nodes, the user selects the amount of XEC and stakes them into the node. Doing so helps secure the network and makes the user a stakeholder in the network. eCash then shares the transaction fees and staking rewards among stakeholders. The amount of staking rewards depends on the amount of XEC a user stakes in the network.
Staking XEC also gives users eCash governance rights. Like most similar blockchains, eCash uses a decentralized governance system. This system works by giving token holders certain privileges and duties within the network. By staking their XEC tokens, the network incentivizes the user and enables them to propose and vote on governance updates.
It is important to note that as at the time of writing, staking on eCash is still in the works, and the annual percentage yield (APY) is unknown.
Use Case: Token Minting and Smart Contract Execution
Within eCash network, blockchain developers can seamlessly design and create new eCash based tokens, known as eTokens using XEC. These eTokens, like Ethereum’s ERC-20 and Binance’s BEP-20, tokens are compatible with decentralized finance (DeFi) payments and applications.
Anyone can launch their tokens and deploy smart contracts on the eCash platform without any technical requirements. All they need to do is go to their eCash dashboard and input custom parameters like token name, supply, icon, distribution model, and other tokenomics.
Minting the tokens costs some network fees, which users must pay for in XEC tokens. Unlike other blockchains that offer this feature, minting tokens doesn’t cost much. A user can deploy smart contracts on eCash network by leveraging the high speed and low cost of a single eCash transaction (about $0.01).
What Makes eCash Valuable?
According to the developers, XEC is intended to support Ethereum Virtual Machine (EVM), making the token interoperable with Ethereum’s DeFi ecosystem. In addition, the developers have laid out a roadmap with solid plans to improve the network to do this successfully.
These plans include enabling more block/transaction processing through canonical transactions and adaptive block sizes to support the network’s growth. In doing this, eCash aims to allow 50 transactions per user for up to 10 billion users. eCash already has a significant utility – facilitating payments and transactions. With upcoming improvements in scalability and utility among blockchains, you can expect to see more mainstream acceptance of the project.