There was a hard fork or split in the Bitcoin blockchain on August 1, 2017. Bitcoin (BTC)-the original Bitcoin and Bitcoin cash (BCH)-split from the Bitcoin original as a result of the fork.
While Bitcoin Cash was not the first such split from Bitcoin, it was one of the most prominent, as it rapidly grew to be one of the leading crypto-assets by market capitalism.
However, with the names similar, the difference between Bitcoin and Bitcoin Cash can be difficult to understand with a glance.
Here is the full Bitcoin versus Bitcoin Cash comparison:
Bitcoin was the first cryptocurrency ever and it wasn’t well known for many years. It’s like any real currency. You can use it to purchase, sell and trade items, services, savings, etc.
The blockchain technology it makes prevents it from being falsified. It also ensures that no single group or organization owns, released or governs this.
For instance, the US dollar is issued and controlled by banks by the US government. The central party, in this case, is the government and the banks. You depend on the bank to approve and process the transaction when you transfer dollars to a relative.
On the other hand, Bitcoin shall not be distributed or regulated by any central authority. The blockchain transactions are verified by computers running the blockchain and anybody owns these computers–the blockchain is decentralized.
Transactions are processed and published in blocks on the blockchain. The computers test the whole transaction block at once by solving a complicated mathematical problem. If the problem is solved, the transactions in the block will be checked and new Bitcoin created— the machine that solved the problem will be given. This process is known as mining!
The total number of Bitcoin ever available is 21 million. Although over 16 million Bitcoin is already in place, it will be a long time before the Bitcoin count reaches 21 million! This is because the amount of Bitcoin generated per block is cut by half every four years.
As more people try to get their hands on some Bitcoin and the creation rate decreases, it is commonly believed that the value will grow. That’s why so many people are now insane about Bitcoin!
Today, Bitcoin is the most precious asset on the market. While other currencies try to override Bitcoin and its domination of the digital coin market, few near. But, because of the discrepancy between bitcoin and bitcoin cash, Bitcoin Cash is an exception!
Because Bitcoin Cash is a Bitcoin fork, I’ll explain before I explain Bitcoin Cash what a fork is!
A few Bitcoin forks are available, but none of them are as used or as famous as Bitcoin cash. A fork is created when the blockchain’s original code is updated, but only a few nodes on the blockchain will accept the blockchain update.
The original blockchain (such as Bitcoin), and the updated nodes split from the original blockchain and create a new blockchain (such as Bitcoin cash) with the coins on the blockchain separated and unique from those on the original blockchain.
Anyone holding the original coin on the fork will automatically receive the forked version of the coin they held. So if Bitcoin forked to Bitcoin Cash, somebody with 10 BTC will automatically get several BCH equal to the value of its 10 BTC.
Now, let’s talk about Bitcoin Cash!
Unlike Bitcoin, Bitcoin Cash is a blockchain cryptocurrency. It works as a digital currency, and a new BCH is created via Bitcoin Cash Mining. It was founded in late 2016, which made it much younger than Bitcoin.
Bitcoin has been forced to create Bitcoin Cash because Bitcoin developers want to make important Bitcoin improvements. The Bitcoin project developers could not decide on some of the improvements they wanted to make. A small group of these developers has therefore forced Bitcoin to create a new version with a few changes of the same code.
The modifications that differentiate Bitcoin Cash from Bitcoin are as follows:
- Bitcoin cash has cheaper transfer charges (about $0.20 per transaction), which saves you more money than with BTC making transactions on BCH. A BTC transaction may cost about US$ 1 per transaction, but before that, a transaction cost around US$ 25!
- BCH has shorter transmission times. So you don’t have to wait 10 minutes for a Bitcoin transaction to be verified!
- BCH can handle multiple transactions per second. It means that more people can use BCH concurrently than BTC can.
All these changes are because a Bitcoin cash block is eight times larger than a Bitcoin block. It makes BCH faster, less costly and more flexible than Bitcoin. Bitcoin cash is increasingly taken over by day as a result.
BTC vs. BCH: Blocksize
Until Bitcoin became so famous, there was no problem managing transactions, because not many of them began. Today, hundreds of thousands of transactions happen daily, transaction speeds and transaction charges can be slower. The network thus fails to handle large volumes of traffic while keeping low charges.
This question of how blockchain technology can be used for mass is often referred to as “scalability.”
One of the key ways to achieve scalability is by increasing the block size of Bitcoin. A new block in a blockchain network contains new transactions which are added regularly to the blockchain.
This is achieved through the “mining” method, in the case of BTC and BCH, where miners use their computing power to solve complex mathematical equations. Miners are the first to solve the equations and have been granted the right to add a new block to the blockchain. In return, they are paid a BTC or BCH block reward to help validate new transactions and secure the network.
For a BTC block size of about 1 megabyte, only so many transactions can be added to each node. High transaction volume periods may create a long “line” (known as mempool) of users waiting for a new block of transactions. The only way to deal with it as a user is to wait until the transaction passes or pay high transaction fees so that miners prioritize the transaction and place it before others in a block.
Discussions on the Bitcoin scalability problem had already been going on for years, and some Bitcoin community members finally got fed up with the situation. Those members of the community have become the founders of Bitcoin Cash (BCH). A hard-fork was installed on 1 August 2017 by the BCH team to increase the block size from 1 megabyte to 8 megabytes. It led to a split Bitcoin blockchain and the birth of Bitcoin Cash cryptocurrency.
While this move allows more transactions for each row, there is a compromise. Larger blocks also mean that fewer people can become “nodes” or that computers or servers that store and serve the blockchain for other users. This is because larger blocks take up more hard drive space, costing node operators more money.
This can lead, however, to more centralized nodes, which can undermine the network safety if a handful of malicious but powerful actors choose to jeopardize Bitcoin.
Therefore the BTC camp (“small blockers”) wants to keep blocks low and figure out scalability by “layer 2” or off-blockchain solutions such as the Lightning Network.
In short, Bitcoin (BTC) wants to have small blocks. Bitcoin needs large blocks. BCH wants large blocks. BTC wants to use layer 2 technology to scale off-chain while BCH wants to scale on-chain by increasing each block’s size.
BTC vs. BCH: Transaction Fees
As reported, high transaction fees are one of BTC’s main criticisms in its efforts to meet rising demand. BCH now has an average fee lower than BTC (BCH $0,0019 vs. BTC $0,39). However, although the BCH camp may use this to criticize BTC, it is not necessarily a fair comparison (yet), because BCH is almost not used as much as BTC and has no high network burden.
BTC vs. BCH: Transaction Speed
BCH blocks can handle multiple transactions concurrently, which means that the transactions will more likely fit into one block without waiting for the next. It should be noted, however, that BCH is not used almost as much as BTC, therefore the network traffic was not tested to the same degree. In any case, BCH is in its block height farther ahead than BTC–a clear indicator that BCH is mining blocks and confirms transactions more quickly.
Bitcoin block height: https://coin.dance/blocks
Bitcoin Cash block height: https://cash.coin.dance/blocks
BTC vs. BCH: Adoption
Concerning acceptance by consumers and traders, BTC is the clear winner. While this could change in the future, more wallets, centralized trading, traders and people generally use BTC. This is of course probably because BTC is the first cryptocurrency and exists for more than 10 years, while Bitcoin Cash exists only since 2017.
The broader adoption of Bitcoin is evident in its large number of daily transactions about Bitcoin cash.
BTC vs. BCH: Hashrate
When it comes to Bitcoin and Bitcoin Cash hashrates or “mining power,” BTC is the clear winner.
A fraction of Bitcoin’s is the total hash rate of Bitcoin Cash, which shows how much computing power miners use to validate transactions and to secure the network. The overall hash rate in BTC is approximately 100 exahashes, while BCH has approximately two exahashes or a 50x disparity.
This means that Bitcoin Cash is more vulnerable to a “51% attack,” where a malicious entity or group gains 51% or more of the network hash rate, allowing them to do things such as reverse transactions or other network harm.
BTC vs. BCH: Price
Another important point of comparison between Bitcoin and Bitcoin Cash is the price. At the end of the day, if there is no interest, nobody wants to use a crypto asset.
It’s hard to beat Bitcoin when it comes to price. In perspective, when the world economy experienced a major economic recession just before the 2010s, traditional financial markets collapsed.
But the S&P 500 and Dow Jones Industrial Average, both major indices that represent the wider US stock market, were 369 and 326 percent respectively from the market collapse in March 2009 to December 2019. Such winnings are nothing to laugh at.
However, Bitcoin was in its category and helped the broader asset class to become the most effective asset class of the 2010s. Bitcoin’s price rose over 12 million percent from March 2010, when 1 BTC was around $0.05, to December 2019. It wasn’t a man! Such gains are unheard of in the investment world.
Unfortunately, since it lost about 65 percent of its value since it was established in August 2017, BCH’s performance was not so strong.
BTC vs. BCH Debate
Bitcoin vs. Bitcoin Cash discussions can be very heated and the subject is regularly debated by prominent speakers.
One such debate was the Roger Ver and Tone Vays argument. Roger Ver is a prominent figure in cryptocurrency as he was one of Bitcoin’s first major investors and evangelists. His company, Memory Dealers, was the first company founded to accept BTC as payment. He has funded several early Bitcoin companies such as Ethereum, Kraken, Bitpay, and Purse.
After dividing where the group was heading, Ver turned his attention to BCH, especially in terms of scalability.
Vays, on the other hand, is a self-appointed “Maximalistic Bitcoin” (someone who feels Bitcoin is preferable to other alternatives). Vays has a financial background as he worked for Bear Stearns and JP Morgan on Wall Street. He is now spending time supporting BTC as a form of economic liberty.
Our discussion is about transaction rates, transaction fees, the use of the network, global acceptance, scalability, and decentralization:
Which is better?
So what better asset at the end of the day: Bitcoin or Bitcoin cash?
BCH is currently battling BTC on block size, transaction fees, and volume. Yet BTC is still more widely adopted. Because of its high hash rate, the Bitcoin network is also much safer. Not to mention that Bitcoin is the best-performing asset (not just cryptography across all asset classes) of the decade.
However, most of the talking points used to compare the two cryptocurrencies are related to the length of the network. When BCH becomes more common, it may be subject to the same scalability problems as BTC and high transaction charges. BCH could also achieve similar or even greater adoption than BTC. Such an increase in popularity could also allow miners to turn to BCH as BCH prices rise in line with its growing popularity.
Therefore, for now, a definitive conclusion is not laid down in stone. However, it is possible in the foreseeable future that both Bitcoin and Bitcoin Cash can play important roles, as Bitcoin is more like “digital gold” or value store, and Bitcoin Cash acts as “digital cash” or as a convenient payment system. Therefore, Bitcoin vs. Bitcoin Cash might not be, but Bitcoin and Bitcoin Cash.