The Bitcoin Cash (BCH) network underwent a major upgrade on May 15, allowing developers to create tokens with the same properties as BCH. The tokens — called “CashTokens” — can be issued by anyone using the network.
The network successfully upgraded the blockchain at the block height of 792,772. According to BCH developer Jason Dreyzehner, the new upgrade includes support for CashTokens, which the developer believes to be a “tool for expanding financial access.” The upgrade also has features like future-proof multiparty vaults and technical improvements for transaction validation.
Congrats on the 2023 upgrade, Bitcoin Cash!
Beginning with block #792773 (000000000000000002fc0cdadaef1857bbd2936d37ea94f80ba3db4a5e8353e8), $BCH supports #CashTokens, future-proof multiparty vaults (P2SH32), and several non-breaking technical improvements to TX validation.
— Jason Dreyzehner (@bitjson) May 15, 2023
The developer highlighted that CashTokens could be used for various applications, from payment stablecoins and commodities to gift cards and event tickets. Dreyzehner also mentioned that its underlying technology would make advanced on-chain applications possible. This includes decentralized exchanges (DEXs), security vaults and bridged sidechains.
Related: Ordinals good or bad for Bitcoin? Supporters and opposers raise voices
The price of BCH surged on the same day due to the new update. Data shows that the tokens went from $114 to a high of $120 on May 15. Despite the hype, the price action was short-lived as the price almost instantly returned to the $113 to $114 range after the upgrade.
The CashTokens upgrade on the Bitcoin Cash network comes as BRC-20 tokens become increasingly popular. On May 9, BRC-20 tokens surpassed a $1 billion market capitalization. The explosive growth came two months after the Bitcoin token fungibility protocol was created and was fueled by the growth of tokens like Ordi (ORDI), Nals (NALS), VMPX (VMPX), Pepecoin (PEPE) and Meme (MEME).
While the new development proved exciting for many, it came with a new set of problems for the network. On May 10, CryptoQuant analyst Axel Adler expressed that increased fees and a backlog of transactions have besieged the Bitcoin network because of the new token standard.
Magazine: $3.4B of Bitcoin in a popcorn tin: The Silk Road hacker’s story