How, where and why to buy Bitcoin Cash in Australia.
You can buy Bitcoin Cash much like other cryptocurrencies. However, it’s not as established as some others, so your options are more limited.
Bitcoin Cash (BCH or BCC) reached a new high on 12 November 2017, peaking at around US$2,000. This is more than twice as high as its previous peak in August.
To buy Bitcoin Cash you will need the following:
- A wallet that supports Bitcoin Cash.
- To choose whether you’ll buy from a broker or on an open exchange.
- To follow the site’s sign-up and verification processes to buy Bitcoin Cash.
Places to buy Bitcoin Cash in Australia
How to buy Bitcoin Cash on an exchange or from a broker
The procedures can vary, but generally it’s as easy as doing the following:
- Creating an account by signing up with an email address
- Verifying your account by providing proof of identification
- Depositing funds into the account, and then using that to buy BCH that’s listed for sale
- The procedures are similar whether you’re buying on an open exchange or from a broker.
What to look for in an exchange
The following are some of the main factors to consider:
- Payment methods. POLi is the most widely accepted payment method, and almost all exchanges and services will accept it. If that doesn’t work for you, then you’ll need to specifically look for a service with alternative payment options, such as cash, credit card or PayPal.
- Transaction times. A high order volume might affect transaction times, so if you want it sooner, it can be helpful to look for a less popular service or one that offers faster transactions.
- Reputation. It’s always good to look for an established provider with a strong reputation.
How to choose a Bitcoin Cash wallet
The price of Bitcoin Cash jumped in November 2017 before there were too many wallets that supported it. In an effort to get in quickly, some unsuspecting users were scammed by fake Bitcoin Cash wallets that were created specifically to take advantage of new users.
If you’re not sure how to find a reliable wallet, a good rule might be to avoid anything that looks as though it has been newly created exclusively for BCH.
This means looking for established multi-currency wallets that support BCH and have a proven security history. All of the following hardware wallets fit the bill, and might be a reliable option.
What’s the difference between bitcoin and Bitcoin Cash?
You don’t want to confuse the original bitcoin (BTC or XBT) with Bitcoin Cash (BCH or BCC).
You might think of BTC as being more collectible, but BCH as being more usable.
One main difference
The main difference is that Bitcoin Cash has an 8MB block size, compared to legacy bitcoin’s 1MB block size. This makes Bitcoin Cash easier to mine, which has the effect of decreasing its rarity.
You might think of this as Bitcoin Cash having a higher rate of inflation than other cryptocurrencies. You will need to decide if this means it might not increase in value as quickly as “rarer” cryptocurrencies like the original bitcoin, which could be a downside if you're looking for a currency that appreciates more quickly.
The upside of the 8MB block size is that BCH can be transferred quicker, cheaper and easier, and it might be a more practical way to buy, sell and move funds than BTC. Some traders feel that in the long run the more “usable” cryptocurrency will win out, rather than the one that’s worth the most at the moment.
The other main difference
The second main difference is that BCH scales its mining difficulty based on how many miners are working at the time.
Miners use computing power to process the transactions, and are rewarded with Bitcoin Cash for their efforts. This is the same system that most other cryptocurrencies use.
But the scaling difficulty used by Bitcoin Cash means that whenever there are more miners working on it they all get paid less BCH for their work, and when there are fewer miners working on it, they all get paid more BCH for their work.
This has the following effects:
- Keeping the natural “inflation” caused by 8MB block sizes in check. When there are too many miners, some will switch off because it’s not worth their time.
- Keeping transaction fees lower and transfer times faster across the board. When there aren’t enough miners, more will move over to start processing transactions.
What factors affect BCH prices and why did they spike in November?
BCH prices are susceptible to the same forces that impact other cryptocurrencies.
- General interest
In November 2017 in particular, though, it’s suspected that a lot of bitcoin users switched to BCH instead, driving the price up to a new level, after the Segwit2X bitcoin hard fork was cancelled.
That hard fork was intended to give BTC some of the same features as BCH and improve its transactability at the cost of collectibility.
It was a contentious issue and eventually ended up dividing opinions. So when the fork was cancelled, a lot of users decided that in the long run they wanted to support the more “transactable” BCH coin rather than the more “collectible” BTC.
So suddenly there were a lot of people selling bitcoin and buying Bitcoin Cash. This caused bitcoin prices to drop, and Bitcoin Cash prices to rise. After the initial jump to around US$2,000, Bitcoin Cash prices settled back to around US$1,100.
All of this took place over the course of about two days from 12 November to 14 November, 2017. When the dust settled, BCH prices seemed to have a new floor of over US$1,000, while bitcoin prices have largely recovered.