Almost everyone has heard of Bitcoin, the world’s first and most valuable cryptocurrency. But you may also have heard of Bitcoin Cash, another popular and valuable currency that now has a solid footing in the market.
So what exactly is the difference between these two tokens, and what does each of them offer?
The origins of Bitcoin and Bitcoin Cash
An elusive figure named Satoshi Nakamoto developed and launched Bitcoin in 2007. It was the world’s first cryptocurrency. In a sense, Bitcoin set the stage for future cryptos and became something of a household name.
This cryptocurrency is now by far the most valuable in the world. Its value went from a few hundred dollars in the mid-2010s to tens of thousands of dollars a few years later. At one time, a bitcoin could buy you a latte. These days you could buy a new car with one.
However, the Bitcoin you see today is not exactly what the developers had in mind. Their goal was for people to use Bitcoin as part of a peer-to-peer electronic payment system. But its frustrating and volatile nature means that was not possible. Enter Bitcoin Cash.
By the mid-2010s, concerns about Bitcoin’s loopholes were growing. Crypto, which was rising in value, had frustrating transaction times and was difficult to scale efficiently. So, in 2017, a few miners and developers created a Bitcoin-related cryptocurrency called Bitcoin Cash to overcome these issues.
The development of Bitcoin Cash involved a hard fork on the original Bitcoin blockchain. A hard fork involves splitting a blockchain protocol and creating two separate chains. Thus, Bitcoin Cash consists of the same basic code used for Bitcoin, but with some additional alterations and modifications. Think of it as two new species evolving from a predecessor on an evolutionary tree.
So, if the purpose of Bitcoin Cash is to fill in the gaps of Bitcoin, what useful features does it have?
How is Bitcoin Cash different from Bitcoin?
First, the transaction period of Bitcoin Cash is also much shorter than that of Bitcoin. Currently, a Bitcoin transaction takes about 10 minutes. Compared to your standard Visa transaction, this is incredibly long. A Bitcoin Cash transaction can take as little as two minutes because Bitcoin Cash is more scalable. More people can be on the blockchain, making transactions, at the same time without having to deal with long waiting periods.
Another big difference between Bitcoin and Bitcoin Cash is the block sizes of the two separate cryptos. Until recently, Bitcoin’s block size was only 1MB. Using SegWit2x, an upgrade that miners voted to incorporate in 2017, Bitcoin’s block size could increase to 2MB. But this is still quite small when compared to Bitcoin Cash.
Bitcoin Cash’s block size is considerably larger at 32MB. Larger blocks mean each can hold more transactions, so Bitcoin Cash is more scalable.
This prevents the accumulation of huge backlogs of pending transactions, which is currently a big problem for Bitcoin. At times, up to 100,000 transactions could be pending in this backlog, which can cause big problems for the network and create considerable frustration for users.
Bitcoin Cash also has cheaper transaction fees, making it more affordable to use overall than Bitcoin. For a transaction, you will only have to pay 20 cents with Bitcoin Cash.
Bitcoin Cash also uses smart contracts. They are basically computer programs designed to automatically execute legal digital agreements. In short, they can simplify exchanges between two parties without the need for intermediaries. This removes the risk of human error, enhances security, and also contributes to the speed of Bitcoin Cash.
At this point, you might be wondering if Bitcoin Cash really has value. Well, if you compare the value of any crypto to that of Bitcoin, you will probably be disappointed. But Bitcoin Cash is currently among the 30 most popular and valuable cryptos in the world. So it’s not at Bitcoin level but it’s by no means worthless.
But it hasn’t been smooth sailing for Bitcoin Cash. Bitcoin Cash, like Bitcoin, is a cryptocurrency. So, like Bitcoin, Bitcoin Cash is subject to considerable volatility in terms of value. Since its launch in the market, the price of Bitcoin Cash has fluctuated significantly on several occasions. The value of this crypto has varied between a few hundred dollars and over three thousand dollars over the past five years, so it is not exactly a stablecoin.
So, if Bitcoin Cash outperforms Bitcoins in many ways, why is Bitcoin still a market leader and by far the most valuable crypto?
Why is Bitcoin more popular than Bitcoin Cash?
It is important to note that, for many people, Bitcoin is something of a revolution. It changed the way they use, buy, and make money, and led to the rise of a multi-billion dollar industry. For this reason Bitcoin has a bit of a cult following. Many Bitcoin owners and miners swear by this specific crypto, so a hard fork would not necessarily reduce its popularity.
On top of that, Bitcoin is probably the only crypto that is a household name. Many crypto newbies see Bitcoin as the best investment option purely because of its popularity and value. If a person views crypto solely as a long-term investment, they may not care much about transaction times, block sizes, and scalability.
Bitcoin certainly has its flaws, and it is unclear whether its developers will modify it in the future based on user demand. As the wider population becomes more familiar with cryptocurrencies, a greater emphasis on convenience may develop.
These two cryptos have a bright future
Although Bitcoin and Bitcoin Cash differ significantly in their value and demand, both cryptos seem to have a very promising future. Bitcoin continues to be a popular crypto with a loyal following. The features of Bitcoin Cash make it a convenient and affordable crypto to trade. Depending on your preference, either of these tokens might work well for you.
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