CashTokens of Bitcoin Cash refer to digital assets created on the Bitcoin Cash network. The Bitcoin Cash (BCH) network has recently undergone a major upgrade, allowing developers to issue tokens on the network. These tokens are called “CashTokens,” and anyone can issue them.
CashTokens are digital assets with the characteristics of Bitcoin Cash, such as resistance to censorship, peer-to-peer, and low fees. They can represent physical assets, serve as currency, payment stablecoins, commodities, and securities.
CashTokens are issued, verified, and cashed by Bitcoin Cash’s virtual machine. Tokens can be issued either by trusted entities or by Bitcoin Cash’s covenants that are set up to behave like corporations. In addition, decentralized applications can use CashTokens externally.
Differences between CashTokens and SLP Tokens
Both CashTokens and SLP (Simple Ledger Protocol) tokens are implementations of tokens on the Bitcoin Cash (BCH) network, but there are several important differences:
Miner Verification: SLP tokens do not have miner verification and are built on a layer above the BCH protocol. CashTokens, on the other hand, are native to the protocol and have miner verification. This means that when an app (like a wallet) receives a transaction of SLP tokens, it must check the complete history of each token to verify whether it’s genuine. As tokens became more popular, the response of apps slowed because the history of transfers to check became longer. This was a major issue for the SLP infrastructure.
In contrast, CashToken transactions are valid by default when wallets receive them because nodes do not broadcast them, and miners do not mine them initially. Therefore, the success of CashTokens is not hindered by a self-limiting negative feedback loop like SLP tokens. Additionally, no extra infrastructure for token verification is needed.
Functionality: SLP tokens covered a more limited function set (creation of tokens, transfers, burning, dividend payments). CashTokens have the same functions but also have the general power to do much more, such as communication between BCH control contracts. This shows that many things not possible with SLP can be built and drive engagement with CashTokens.
Software Integration: SLP tokens could be accidentally burned by non-compatible BCH software, leading to user dissatisfaction and issues across the ecosystem. In contrast, CashTokens can’t be accidentally received, burned, or lost by wallets or applications that do not recognize them.
Key Points of Interest in CashTokens
Particularly noteworthy points about CashTokens are fungible tokens and non-fungible tokens (NFTs). These features offer the advantage of having decentralized applications equivalent to Ethereum, while simultaneously enjoying over a thousand times the efficiency of Bitcoin Cash.
NFTs are a type of token where individual units cannot be combined or divided, and each NFT carries a commitment containing a short byte string that the issuer has attested to. These characteristics demonstrate that CashTokens, as the built-in token system of the Bitcoin Cash network, have high efficiency and comprehensive compatibility. Transactions of CashTokens are extremely efficient, and due to parallel verification, transaction fees are less than a cent even at high network utilization.
Use Cases of Tokens
The value of each CashToken is determined by the underlying asset or service or the credit of the issuer. These tokens can be used for a variety of purposes such as interoperability between platforms, proving ownership of digital content, and implementing smart contracts.
CashTokens enable developers to integrate their own tokens into their applications or services. This allows developers to encourage user behavior or provide access to specific features. For example, a social media platform could use tokens to incentivize users to share posts or gain new followers.
CashTokens leverage the decentralized and security features of blockchain technology to potentially create new economic models. For instance, CashTokens can enable peer-to-peer markets where users can directly exchange goods and services.
CashTokens also function as digital assets that decentralize financial services, enabling direct transactions without the need for banks or financial institutions.
As shown above, Bitcoin Cash’s CashTokens provide new possibilities and opportunities for users, developers, and the ecosystem as a whole. With its powerful features and flexibility, CashTokens will help to expand the range of uses of the Bitcoin Cash network and shape a new paradigm of digital assets.