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Forbes Advisor has provided this content for educational reasons only and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or in any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.
Bitcoin Cash (BCH) is a cryptocurrency built on the same blockchain as the world’s first and biggest cryptocurrency, Bitcoin.
It launched in 2017 as a result of a hard fork in Bitcoin’s blockchain. Some participants voted to allow Bitcoin to process greater volumes of transactions, but the majority of participants disagreed, and so the blockchain forked off into Bitcoin Cash.
Bitcoin Cash enables greater volumes of transactions by having a larger block size than Bitcoin. Essentially this means a group of BCH transactions validated by a miner and added to the Bitcoin Cash blockchain contains a greater number of transactions than a group of transactions validated by a miner and added to the Bitcoin blockchain.
Larger blocks result in faster and cheaper transactions – but this comes at the expense of security, since fewer miners are required. This makes the network theoretically easier to compromise than the Bitcoin network.
BCH currently trades at around £150, down from a December 2017 high of £2,365. It has a current market capitalisation of £2.9 billion.
If you’re interested in investing in Bitcoin Cash (BCH), here’s what you need to know:
1. Choose a crypto exchange
You can buy BCH from a crypto exchange. In order to do so, you’ll need to open an account with one. We ranked what we believe are the best crypto exchanges.
Once you’ve chosen an exchange, you’ll need to register for an account. This involves sharing some personal information and, increasingly, passing some light identity verification checks. This could mean uploading a photo of an official identity document, or following a set of on-screen prompts in front of your smartphone camera.
Once registered, you’ll need to credit your account with some fiat currency (pounds Sterling) in order to make any trades. You’ll be given various options for making this payment.
2. Choose a payment method
While many exchanges offer credit and debit card deposits, they often attract fees of around 3%. Credit card payments are also treated by creditors as cash advances, which means you’ll pay a higher rate of interest than you would a traditional transaction.
Either way, it is not a good idea to take on debt to pay for an asset which could (and is likely to) go down in value, leaving you with debts that outstrip your assets.
Bank transfers are the simplest, fastest and cheapest way to credit your account. Most exchanges ask for a minimum deposit of around £10, regardless of whether you’re buying a whole BCH for £150 or a 1/1,000th of a BCH for £0.15.
Once your account is credited, you’ll be able to make your first trade.
3. Buy Bitcoin Cash
Navigate to the BCH page within your exchange’s website or app, tap in the amount of money you’d like to spend on it and proceed to the preview screen. Here you’ll see how much BCH your money will buy you after the exchange has taken its cut of the transaction.
If you’re happy with the numbers, confirm the transaction. You’ll then get a confirmation email and you should be able to see the BCH you now own reflected in your account balance.
4. Store your keys
If you’re happy with your exchange securely holding your private and public keys, which you need to carry out transactions with your BCH, you don’t need to take any action.
If you’d prefer to store your keys elsewhere, perhaps because you’re concerned about hackers targeting your exchange, you can either search for a third party crypto wallet provider or else buy a hardware wallet and store your keys offline.
The choice between an online and offline wallet boils down to balancing convenience against security. To learn more about keeping your keys secure with a crypto wallet, read our crypto wallet guide.
