Bitcoin vs. Bitcoin Cash: What’s the Difference?
Almost everyone has heard about Bitcoin, the world’s first and most valuable cryptocurrency. But you may have also 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 character 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 has become something of a household name.
This cryptocurrency is now the most valuable in the world by far. Its value skyrocketed 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. Nowadays, you could buy a new car with one.
However, the Bitcoin you see today is not exactly what developers had in mind. Their aim was for people to use Bitcoin as part of a peer-to-peer electronic payment system. But its frustratingly volatile nature means that this wasn’t possible. Enter Bitcoin Cash.
In the mid-2010s, concerns surrounding Bitcoin’s shortcomings were increasing. The crypto, rising in value, had frustratingly long transaction times and was difficult to scale effectively. 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 occurring on the original Bitcoin blockchain. A hard fork involves a blockchain protocol splitting and creating two separate chains. So, Bitcoin Cash consists of the same basic code used for Bitcoin, but with some added alterations and modifications. Think of it like two new species evolving from one predecessor on an evolutionary tree.
So, if the point of Bitcoin Cash is to make up for Bitcoin’s shortcomings, what helpful features does it have?
How Does Bitcoin Cash Differ From Bitcoin?
Firstly, Bitcoin Cash’s transaction period is also much shorter than that of Bitcoin. Currently, a Bitcoin transaction takes around 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, conducting 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 just 1MB. Using SegWit2x, an upgrade that miners voted to integrate in 2017, Bitcoin’s block size could increase to 2MB. But this is still pretty small when you compare it to Bitcoin Cash.
Bitcoin Cash’s block size is a considerably larger 32MB. Larger blocks mean each can contain more transactions, so Bitcoin Cash is more scalable.
This prevents huge backlogs of pending transactions from building up, which is currently a big problem for Bitcoin. At certain times, as many as 100,000 transactions could be waiting in this backlog, which can cause big problems for the network and create considerable user frustration.
Bitcoin Cash also has cheaper transaction fees, making it more affordable to use overall than Bitcoin. For one transaction, you’ll incur a fee of just 20 cents with Bitcoin Cash.
Bitcoin Cash also makes use of smart contracts. These are essentially computer programs designed to automatically execute legal digital agreements. In short, they can simplify trades between two parties without the need for intermediaries. This removes the risk of human error, heightens security, and also contributes to Bitcoin Cash’s speed.
At this point, you may be wondering if Bitcoin Cash is valuable at all. Well, if you compare any crypto’s value to that of Bitcoin, you’ll probably come out disappointed. But Bitcoin Cash currently sits among the top 30 most popular and valuable cryptos around the world. So, it’s not at the level of Bitcoin but is by no means worthless.
But it hasn’t exactly 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 onto the market, Bitcoin Cash’s price has fluctuated significantly several times. This crypto’s value has ranged between a few hundred dollars to over three thousand dollars over the past five years, so it’s not exactly a stable token.
So, if Bitcoin Cash outshines Bitcoins in so 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’s important to note that, for many people, Bitcoin is something of a revolution. It has changed how they use, buy, and earn money, and has led to the rise of a multi-billion-dollar industry. Because of this, Bitcoin has a bit of a cult following. Many Bitcoin owners and miners swear by this specific crypto, so a hard fork wouldn’t necessarily reduce its popularity.
On top of this, Bitcoin is probably the only crypto that’s a household name. Many crypto novices see Bitcoin as the best investment option solely because of its popularity and value. If a person views crypto solely as a long-term investment, they may not much care about transaction times, block sizes, and scalability.
Bitcoin certainly does have its flaws, and there’s no knowing whether its developers will modify it in the future based on user demand. As the wider population gets more familiar with cryptocurrencies, a bigger focus on convenience may develop.
These Two Cryptos Have a Promising Future
Though 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 widely-loved crypto with a loyal following. Bitcoin Cash’s features make it a convenient and affordable crypto to trade. Depending on your preferences, either of these tokens could work well for you.
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