Bitcoin Cash (BCH) remains a significant player in the cryptocurrency market, consistently ranking within the top 11 by market capitalization. For businesses like exchanges, online stores, gaming platforms, or project teams, integrating BCH wallet functionality is often essential. This guide provides a comprehensive overview of the BCH wallet integration process, including its technical aspects and practical applications.
Understanding Bitcoin Cash (BCH)
Bitcoin Cash (BCH) emerged from a hard fork of the original Bitcoin blockchain in August 2017. This community-driven update was primarily initiated to increase the block size from 1MB to 8MB, aiming to improve transaction throughput and reduce fees.
A subsequent hard fork occurred in November 2018, resulting in two chains: Bitcoin SV (Satoshi's Vision) and Bitcoin ABC. Bitcoin ABC, with greater hash power and node support, became the dominant chain and retained the BCH ticker. The most recent BCH halving event took place in April 2020, reducing the block reward from 12.5 BCH to 6.25 BCH.
Key Differences Between BCH and BTC
While BCH shares a common history with Bitcoin (BTC), several fundamental differences distinguish the two cryptocurrencies:
- Block Size and Scalability: BCH features an 8MB block size compared to BTC's 1MB, enabling it to handle more transactions per second without network congestion.
- Transaction Fees: The larger block size allows BCH to process transactions with significantly lower fees, eliminating the fee market dynamics often seen on the BTC network.
- Philosophical Divide: The BCH community advocates for on-chain scaling and practical usability as a medium of exchange, a vision that diverges from the development roadmap of BTC.
Advantages of Bitcoin Cash in Practical Applications
BCH offers several compelling features for businesses and users alike.
Fast and Affordable Transactions
The 8MB block size ensures that transactions are processed quickly and confirmed in subsequent blocks, even when fees are minimal. This design makes BCH suitable for everyday transactions.
Low Risk for Merchants
Unlike credit card payments, which are susceptible to chargebacks and fraud, BCH transactions are irreversible once confirmed. This eliminates the risk of fraudulent chargebacks for merchants.
Easy Implementation
Businesses can start accepting BCH payments with relative ease. For physical stores, a simple QR code scanner on a mobile device suffices. Online platforms can integrate payment processors like Coinbase Commerce to add BCH as a checkout option seamlessly.
Commitment to Regular Upgrades
The BCH development community is dedicated to continuous network improvement. Recent upgrades include the introduction of a new address format ("bitcoincash:") prefix to prevent confusion with BTC addresses, enhancing security and user experience.
BCH Wallet Integration Process
For platforms lacking in-house blockchain expertise, integrating BCH functionality typically involves working with a third-party service provider that offers a comprehensive API. The integration process revolves around several core functions.
1. Generating a Deposit Address
The first step is to generate a unique BCH address for each user to receive deposits.
API Endpoint: POST /mch/address/create
This request requires parameters such as the merchant ID, coin type (BCH), and a callback URL. The system returns a unique BCH address linked to your merchant account. The callback URL is crucial, as it will be used to notify your system of any incoming deposits to this address.
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2. Processing Withdrawals
To send BCH from your platform to a user's external wallet, you use the withdrawal API.
API Endpoint: POST /mch/withdraw
This interface requires details including the destination address, the amount to send, your merchant ID, and a unique businessId to track the transaction. The callUrl parameter specifies where your system will receive status updates about the withdrawal (e.g., approved, completed, failed).
3. Utilizing Proxy Pay (Auto-Disbursement)
Some providers offer a proxy pay service for automatic withdrawals. If configured and funded, this can automate payouts without manual review.
API Endpoint: POST /mch/withdraw/proxypay
The parameters are similar to the standard withdrawal API. If the proxy pay fails or isn't set up, the withdrawal request typically falls back to a manual review state.
4. Handling Transaction Callbacks
The callback system is vital for keeping your platform's balance in sync with the blockchain. Your provided callUrl will receive POST requests with transaction data.
Callback Response Body Includes:
address: The involved address.amount: The transaction amount.status: The transaction status (e.g., 3 for success).txId: The on-chain transaction hash.businessId: Your original ID for the transaction (for withdrawals).
5. Validating Address Legality
Before processing a withdrawal, it's critical to validate the destination address to prevent errors and loss of funds.
API Endpoint: POST /mch/check/address
This interface checks if a given address is valid for the specified coin type (BCH) according to its known format and length rules.
6. Retrieving Supported Coin Information
You can query the API to get a list of all cryptocurrencies your merchant account supports, including their current balances.
API Endpoint: POST /mch/support-coins
This returns a list of objects containing details like the coin's name, symbol, precision (decimals), and your available balance.
Frequently Asked Questions
What is the primary technical advantage of BCH over BTC?
The main advantage is its larger 8MB block size, which allows it to process more transactions per second. This results in faster confirmation times and drastically lower transaction fees, making it more practical for everyday payments and micro-transactions.
How does the callback mechanism work during integration?
Your system provides a callback URL to the wallet API. Whenever a transaction related to your account occurs (e.g., a user deposit or a withdrawal status change), the API service sends a POST request to this URL with all the relevant transaction details, allowing your platform to update its internal records automatically.
What is the most common error during withdrawal integration?
A common error is submitting a duplicate businessId. This ID must be unique for each withdrawal request. If a duplicate is detected, the API will typically reject the request to prevent duplicate processing.
Why is address validation important before a withdrawal?
Validating an address ensures it is correctly formatted and conforms to the rules of the specific cryptocurrency network. Sending funds to an invalid address will likely result in a permanent loss of those assets, as blockchain transactions are irreversible.
Can the same API be used for other cryptocurrencies besides BCH?
Yes, most third-party wallet API providers support a wide range of cryptocurrencies. The integration process is often similar, with the main difference being the coinType parameter used to specify whether you are interacting with BCH, BTC, ETH, or others.
What does a 'proxy pay' failure typically indicate?
A failure in the proxy pay system usually means the automatic disbursement function is either not configured correctly, lacks sufficient funds to cover the transaction and network fees, or has encountered a temporary internal error. The withdrawal is then typically placed in a pending manual review queue.
Conclusion
Integrating Bitcoin Cash wallet functionality is a structured process that involves generating addresses, processing withdrawals, and managing transaction callbacks. By leveraging a third-party API, businesses can overcome technical barriers and efficiently add BCH support to their platforms. The key to a successful integration lies in understanding the core API endpoints, implementing robust error handling, and ensuring secure communication between your system and the service provider.