Bitcoin Cash (BCH-USD), the cryptocurrency that was spun off from bitcoin (BTC-USD) in August 2017, is skyrocketing on Thursday. Interestingly, it is the only one of the five largest cryptocurrencies that is in the green -- bitcoin, Ethereum, Ripple, and Cardano are all negative for the day after two days of strong gains.

The reason is some positive Bitcoin Cash-specific news, which could make the network run smoother and could make the cryptocurrency generally more useful in real-world payment transactions.

Gold token with bitcoin symbol.

Image source: Getty Images.

Today's cryptocurrency prices

Here's a look at the five largest cryptocurrencies by market capitalization and how much each has changed over the past 24 hours.

Cryptocurrency Name (Code)

Price in U.S. Dollars

Day's Change

Bitcoin (BTC)

$8,229.60

(0.2%)

Ethereum (ETH)

$798.00

(4.5%)

Ripple (XRP)

$0.74

(5.7%)

Bitcoin Cash (BCH)

$1,282.00

25.3%

Cardano (ADA)

$0.34

(6.1%)

Data source: www.investing.com. Prices and daily changes as of Feb. 8, 2018, at 1:45 p.m. EST, and prices are rounded to the nearest cent where appropriate.

As I noted earlier, Bitcoin Cash (BCH-USD) is by far the day's best performer. The digital currency is now more than $500 above its 2018 low of $764, but is still way below its peak. Bitcoin cash peaked at $4,053 in December and started 2018 with a price tag of more than $2,000.

What is Bitcoin Cash?

Bitcoin Cash (BCH-USD) split off from bitcoin (also known as bitcoin classic) in August 2017, and was intended as a solution to bitcoin's scalability problem. The simplified explanation is that bitcoin's (BTC-USD) network can only handle about three transactions per second, and with the surge in popularity, that simply wasn't enough to make bitcoin an efficient payment mechanism.

Bitcoin Cash increases the "block size," or the amount of information that can be processed in a given amount of time, by a factor of eight. The goal is to allow Bitcoin Cash to handle a transaction volume similar to large-scale payment networks, such as those used by Visa and Mastercard, which could allow it to be far more efficient than bitcoin classic (BTC-USD) as a method of payment.

Two improvement proposals could be driving Bitcoin Cash higher

In an effort to further improve the Bitcoin Cash cryptocurrency, two new BUIPs (bitcoin unlimited improvement proposals) have been submitted.

The first provides clear and convenient instructions for splitting Bitcoin Cash from bitcoin. Many people who have held bitcoin since before the Bitcoin Cash split, especially those who hold their coins in an older wallet, have still not been able to receive their Bitcoin Cash tokens to which they're entitled to. The effect is that this could bring more of the digital currency into use, and could bring new users into the Bitcoin Cash ecosystem.

The second, and yet-to-be-passed, proposal intends to create a warning system to prevent "double-spend" of Bitcoin Cash tokens, a serious problem for cryptocurrencies and merchants who accept them. This would represent a promising step forward for the young cryptocurrency.

The point is that Bitcoin Cash is still a relatively new cryptocurrency and is still evolving. These two proposals represent progress for Bitcoin Cash, and it seems like cryptocurrency investors are happy to hear it.

Matthew Frankel has no position in any of the stocks mentioned and owns Ethereum tokens. The Motley Fool owns shares of and recommends Mastercard and Visa and has no positions in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.