Bitcoin is unarguably the most dominating and powerful cryptocurrency. Astonishingly, it is not the supply but the value that has made Bitcoin a crypto giant. Bitcoin faces the challenge of scalability and payment processing issues due to higher transaction volumes and smaller block sizes. Bitcoin Cash was started by bitcoin miners and developers concerned about the future of the bitcoin cryptocurrency and its ability to scale effectively.
Although it utilizes the original Bitcoin code, Bitcoin Cash is technically more advanced. Because of its far-reaching implications, Bitcoin Cash is gaining more traction in the crypto market.
While both Bitcoin and Bitcoin Cash have different grounds to cover, let’s take a closer look at how BTC and BCH differ from one another.
What Is Bitcoin?
Bitcoin is the first-ever digital currency created by the pseudonymous Satoshi Nakamoto in 2009. It uses the revolutionary blockchain network that makes the virtual currency decentralized, secure, and anonymous. The coin acts similar to traditional fiat currency when it comes to making everyday transactions. Bitcoin is an all-purpose digital asset that one can buy, sell or trade for profitable purposes.
Bitcoin transactions are processed through a method known as authentication, in which blockchain nodes or computers solve a complex mathematical puzzle. After confirmation of the payments, a distributed digital ledger records them for future references. Since Bitcoin blocks are typically 1 MB in size and the number of regular transactions is in the millions, users may expect slower and costly processing. It led to the evolution of Bitcoin Cash.
What Is Bitcoin Cash?
Bitcoin Cash emerged as a result of some technical upgrades in Bitcoin’s original code. It was after some Bitcoin miners and developers raised concerns over the scalability and usability of Bitcoin. In August 2017, when the Bitcoin original code was updated, a few blockchain nodes accepted the update – a process called a hard fork. Eventually, the updated nodes created a new blockchain and a coin called BCH.
In addition to having its blockchain, the forked coin has a minimum block size of 8 MB that accelerates transaction processing. Another reason behind creating Bitcoin Cash was introducing a virtual currency that works as a medium of exchange rather than a store of value like Bitcoin. Aside from these specifications, Bitcoin Cash differs from its predecessor in significant ways.
Key Differences Between Bitcoin And Bitcoin Cash
- Origin: Bitcoin is an original blockchain-based cryptocurrency, and Bitcoin Cash resulted from a hard fork in Bitcoin in 2017.
- Use Case: Bitcoin aspires to be a safe-haven asset or a store of value, while Bitcoin Cash serves as a digital currency of exchange.
- Scalability: On average, Bitcoin can process seven transactions every second, whereas Bitcoin Cash facilitates more than 100 transactions per second.
- Transaction Time: Bitcoin block size is 1 MB that slows down payment processing. Bitcoin Cash block can be 8-32 MB in size that allows faster transactions.
- Transaction Costs: The slower Bitcoin transaction processing results in higher fees (almost $1 per transaction), but each Bitcoin Cash payment incurs around $0.20.
Bitcoin Vs. Bitcoin Cash: Similarities
- Blockchain Technology: Both virtual assets are built using blockchain technology.
- Proof-of-Work: Bitcoin and Bitcoin Cash adopt a Proof-of-Work consensus mechanism to validate transactions.
- Mining Rewards: Both Bitcoin and Bitcoin Cash reward miners with new tokens for confirming transactions.
- Limited Supply: The coin supply for Bitcoin and Bitcoin Cash is capped at 21 million each.
- Emergency Difficulty Adjustment: Both the coins use this system to maintain coin supply.
Can Bitcoin Cash Overtake Bitcoin?
Even though Bitcoin Cash is cheaper, faster, and gaining value, it lacks investor confidence, governance protocol, community adoption, and market reach.
Furthermore, the mining rewards for BCH and the number of BCH trading pairs are lesser than Bitcoin. The challenge is that Bitcoin Cash has competitors. Bitcoin remains the most popular cryptocurrency in the world as well as the largest by market cap, so users of BCH may find that liquidity and real-world usability is lower than for BTC. Bitcoin Cash has older competitors with essentially equivalent technology like Litecoin, and there are new competitors with arguably better technology like Dash, ZCash, Monero, IOTA, etc. Bitcoin Cash is just one competitor in the space. It has the advantage of being able to piggy-back off the bitcoin infrastructure and being the most secure of the chains, but it remains to be seen if the development teams will be successful at positioning it for broad adoption. All these factors might limit Bitcoin Cash from overtaking Bitcoin. So, if you want to invest in Bitcoin then you must know about an innovative platform called Bitcoin Loophole. You can check out Bitcoin Loophole Review to get more details and get in depth knowledge about this platform.
Bitcoin and Bitcoin Cash are distinct in their transaction throughput and objectives. While the former is more valuable and a store of value, the latter is more scalable and a means of exchange. Although both coins rely on blockchain technology, Bitcoin is the most established and adopted currency. Bitcoin Cash has been slow to catch on, but it is expected to gain popularity and value over time.