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Bitcoin Cash risks: what to know before you use it

The risks of using Bitcoin Cash are weaker mining security, irreversible payments, and address confusion. BCH is a 2017 bitcoin fork built for payments.

Vahe HakobyanEditor-in-chief Updated Oct 6, 20263 min readFact-checked

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What is Bitcoin Cash?Who created Bitcoin Cash?What is Bitcoin Cash used for?How is it different from Bitcoin?What are the risks and legal history?FAQ

Key takeaways

Miners confirm BCH transactions, and private keys control the coins.
The August 2017 fork came from a dispute over block size.
Lower hash power leaves the chain more open to attack.

Short answer

Bitcoin Cash is a bitcoin fork built for payments. The main risks of using it are weaker mining security, irreversible payments, and confusion between BCH and bitcoin addresses.

Bitcoin Cash is a cryptocurrency with its own blockchain and miners. It keeps bitcoin's rules but is meant for spending.

What is Bitcoin Cash?

Bitcoin Cash is a Bitcoin-derived blockchain. Miners confirm transactions and add them to blocks, and the private keys control the coins.

A public ledger records every transaction.
Losing your private keys means losing the money.
Anyone can join the network and run a node.

Who created Bitcoin Cash?

Miners and developers forked bitcoin in August 2017 after a fight over block size. Their side wanted larger blocks, and Bitcoin's SegWit upgrade was activated that same month.

What is Bitcoin Cash used for?

Bitcoin Cash is built for peer-to-peer payments. Some merchants accept it, though support has stayed limited since 2017.

Send BCH straight to another person's address.
Pay a merchant that accepts BCH.
Move BCH to an exchange to convert it.

How is it different from Bitcoin?

Bitcoin Cash uses larger blocks than bitcoin, so each block holds more transactions. It has far less mining power, which makes its chain easier to attack. Bitcoin SV split away in 2018.

Bitcoin Cash vs bitcoin
Feature	Bitcoin Cash	Bitcoin
Block size	Larger	Smaller
Mining power	Lower hash power	Higher hash power

What are the risks and legal history?

The main risks are weaker mining security, payments that cannot be undone, and confusion between BCH and bitcoin addresses. On-chain payments are final, though a custodial service may sometimes help. Under the Commodity Exchange Act, bitcoin and other virtual currencies count as commodities.

A large mining group could attack a chain with low hash power.
Sending BCH to a bitcoin address can lose the funds.

Bitcoin price todayLive price, charts and market data live in our Coins section.

Frequently asked questions

Use a wallet you control and keep the private keys offline or backed up. The CFTC recommends researching a wallet before you share sensitive information.

The IRS treats crypto as property. Buying BCH with US dollars is not taxable, but swapping it for another crypto or paying with it usually is.

Report it to the CFTC, which says it has heard from investors who lost money to virtual currency exchange fraud and pyramid schemes.

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Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.