Being the largest and most valuable cryptocurrency in the world, Bitcoin began its journey with the promise of offering a fast and cheap method of payment. Since it gained popularity, mainly from the year 2017, there have been questions surrounding Bitcoin’s ability to scale effectively. A group of influential miners, developers and investors were fed up with Bitcoin’s problems which resulted in the effective creation of new currency called Bitcoin Cash.
Bitcoin Cash was initiated as “hard fork” on Aug 1, 2017, by Bitcoin miners and developers. The currencies seem similar in many ways. They both hold value, allowing you to spend them on all sorts of goodies or use them for investment purposes. So, how is it different from Bitcoin?
The Difference between Bitcoin(BTC) and Bitcoin Cash(BCH)
Bitcoin transactions are far from cheap and fast anymore due to the currency’s technical limitations – a problem Bitcoin cash is trying to resolve. The issue with Bitcoin is the small 1 MB block size limit. This makes it painfully slow, as the currency is said to be capable of processing only seven transactions per second. For comparison, Visa can handle 24,000 transactions at the same time. Bitcoin transactions also take 10 minutes to process and have become expensive due to increasing demand with the average fee more than $6.
The major difference lies here- Bitcoin Cash has a block size limit of 8 MB – eight times more than Bitcoin. This allows it to process more transactions per day, speed up processing times, and reduce fees. Moreover, the transaction fees come in at around $0.20, making them much cheaper when compared to its rival.
Another difference between the two is the ranking in the digital market. While Bitcoin is in the top spot, Bitcoin Cash stands at 4th position by market cap. The market cap of Bitcoin is currently $240 billion whereas that of the other is around $40 billion.
Bitcoin Cash is becoming extremely popular among users and has been increasing in value since its introduction. But like Bitcoin, it has its share of problems. The increased block size could have a centralizing effect and reduce the attack resistance of the network. Bitcoin hasn’t been around for long, so we’ll have to wait until it sees more daily transactions to find out if that will actually happen.
Bitcoin Cash is not interchangeable with Bitcoin on a like-for-like basis. It is not accepted by same wallets or addresses as Bitcoin. It might have same technological features as Bitcoin, but it is not definitely Bitcoin.
As for now, Bitcoin will continue to be highly secure but how much its transaction speeds will improve is unclear. Bitcoin Cash, once its difficulty has adjusted, could have transactions processing in two minutes and 30 seconds. The security of Bitcoin Cash blockchain, though, is unclear.