It is critically important to research SmartBCH and understand the risks thoroughly before using it in any capacity at this time. Further updates will of course appear on the podcast where notable change has happened, but The Bitcoin Cash Podcast suggests avoiding SmartBCH entirely at this time.
SmartBCH is an EVM-compatible sidechain of Bitcoin Cash.
EVM means "Ethereum Virtual Machine", which is the code standard pioneered by the Ethereum (ETH) network for defining cryptocurrency smart contracts. This means that any code written for Ethereum can be copy-pasted across to SmartBCH and is instantly compatible. This allows Bitcoin Cash to benefit from all of the financial products and programming work completed now or in future on any other EVM compatible chain - so not only Ethereum (ETH) but many other major blockchains including Cardano (ADA), Binance Smart Chain (BSC), Solana (SOL) and Avalanche (AVAX). BCH therefore has tradeable tokens, decentralised exchanges, yield farming, NFTs and other DeFi cryptocurrency functionality.
A "sidechain" means that the ecosystem for SmartBCH runs on its own blockchain isolated from the central Bitcoin Cash main chain. This ensures that any problems on SmartBCH cannot cause any issues on the main Bitcoin Cash chain. It also means that data storage on SmartBCH does not compound with data storage on the main chain to reduce decentralisation.
The two chains are connected by a number of company-operated "bridges", which allow users to swap their main chain BCH at a 1:1 ratio for sBCH on the smartBCH chain or to swap them back. A decentralised bridge (called SHA-Gate) has been developed, and will launch in May of 2022, removing the reliance on centralised bridges in the meantime. The sidechain shares the main BCH token (denoted as sBCH while on the sidechain), so there will never be more than 21 million coins total across both the main chain and smartBCH sidechain.
Similar to some other smart chains, SmartBCH burns part of the transaction fees paid on the network. This means increased usage of decentralised finance on the smartBCH chain rewards all BCH holders (on both the smartBCH and main BCH chain) by decreasing the circulating BCH supply and increasing the value of the remaining BCH. SmartBCH burns 50% of the (very low) fees paid (the other 50% is paid to validators).
In true BCH fashion, SmartBCH has its own innovations to maximise scaleability and decentralisation in ways that other EVM compatible chains cannot copy.
- Hardware optimised: The SmartBCH team wrote their own EVM compatible code from scratch, focussed on optimising for parallel hardware execution. This makes the supported throughput of the network far higher by default, and allows SmartBCH to benefit greatly from ongoing development in computer hardware. The Ethereum network targets a gas limit of 15 million per block, while SmartBCH supports 1 billion gas per block. This means BCH currently is about 80x as scaleable as the Ethereum main chain (leading to much lower fees), with the team working hard to improve this further.
- Miners as validators: The Ethereum network is trying to transition away from Proof Of Work mining to Proof Of Stake validators to secure their blockchain's decentralisation. BCH gets the best of both worlds, by allowing BCH miners to elect a validator using their main-chain Proof Of Work. This means that SmartBCH is secured by the largest and most decentralised crypto mining network in the world (the SHA256 miners shared by Bitcoin BTC and Bitcoin Cash BCH), as well as providing additional incentive to encourage Bitcoin BTC miners to switch more of their hash power to Bitcoin Cash BCH. In this way, SmartBCH has the proven security of Proof Of Work mining without using any extra electricity or needing extra infrastructure incentives - as Bitcoin mining is already independently established.
In essence, this makes Bitcoin Cash the better version of Bitcoin BTC (cash/money) and ALSO the better version of Ethereum (decentralised finance) within the same interoperable network using the same base token (BCH). It will continue to passively benefit both from ongoing enormous investment and improvements in the Bitcoin mining industry, as well as in the EVM/DeFi ecosystem. This is a unique property of BCH, which is only replicable in theory on other Bitcoin forks and in practice (for a variety of reasons, including community attitude and technical choices) on no other coins.
Note that BCH is also simultaneously developing smart contracts for the UTXO model with "PMv3" transactions. This will unlock even more scaling, and interoperates with SmartBCH. This video has some more information:
See also: Where can I learn more about SmartBCH?
See also: What about Ethereum (ETH)?
See also: Is SmartBCH burning BCH coins a problem?