Table of contents
- Bitcoin vs. Bitcoin Cash: Background
- Bitcoin (BTC) vs Bitcoin Cash (BCH)
- Similarities Between BTC and BCH
- Bitcoin vs Bitcoin Cash: Which One to Choose?
Many debates around Bitcoin have focused on the central problem of scalability and speed regarding the verification process of transactions. Both developers and crypto miners have zeroed in on two major solutions to these problems:
- Reducing the amount of verifiable data in each block to create faster and cheaper transactions;
- Increasing the size of data blocks to accommodate more information that can be processed simultaneously.
These solutions led to the development of the Bitcoin Cash (BCH) cryptocurrency.
So, in the following article we will take a closer look at Bitcoin vs. Bitcoin Cash.
Bitcoin vs. Bitcoin Cash: Background
Bitcoin, the pioneering cryptocurrency, was launched in 2009 to enable fast and transparent digital transactions. Its transactions are powered by blockchain technology, which relies on a network of users known as miners to confirm and validate new transactions. These miners add new transactions to the previous blocks, creating a permanent and tamper-proof record.
Although Bitcoin supports transactions for goods and services, its scalability has become an issue that must be addressed. Consequently, Bitcoin miners and developers came up with a solution, which led to the creation of Bitcoin Cash (BCH).
Initially, BCH was attached to the Segregated Witness (SegWit) technology, but its developers were concerned about its scalability. They believed that SegWit did not address the scalability issue meaningfully and that it did not follow the roadmap outlined by Satoshi Nakamoto, the original creator of Bitcoin.
In August 2017, Bitcoin underwent a hard fork that resulted in the creation of Bitcoin Cash (BCH). BCH is now an independent cryptocurrency with its own specifications and blockchain.
BCH established an increased block size of 8MB at its launch to speed up the verification of transactions. Additionally, it implemented an adjustable level of mining difficulty to maintain the chain’s survival and speed, regardless of the number of miners available on the network.
Bitcoin (BTC) vs Bitcoin Cash (BCH)
The main differences between BTC and BCH mainly revolve around speed, security, and cost of transactions. Bitcoin transactions are slower due to stricter rules governing the network’s verification process. The fees are also higher.
On the Bitcoin Cash blockchain, transactions are faster and less costly. However, that speed may also cause more loopholes on the network, making it more vulnerable to external attacks.
Here is a summary of the differences between BTC and BCH:
|Bitcoin Cash (BCH)
|Purpose and Goals
Regarding market cap, Bitcoin remains the most prominent cryptocurrency, with more than 425 billion dollars. Also, Bitcoin Cash is among the top 30 cryptocurrencies.
And when it comes to security, the Bitcoin network provides more robust security. That’s because the limited block size and the number of transactions it can handle at once imply significantly higher competition between miners.
On the other hand, the Bitcoin Cash network provides weaker security because of its expanded block size and increased number of transactions reducing the mining competition.
Advantages and Disadvantages of Bitcoin
|Protects from payment fraud
|It can be used by fake dealers
|Reduces chances of identity theft
|Black market activity
|Facilitates direct transfer of funds
|Price volatility makes its prices unpredictable
|Provides immediate settlement and greater liquidity
|No refund in case of losses
|Supports international transactions
|Competition from emerging cryptocurrencies
|It’s blockchain-based, secure, and independent
|Cyberhacking and piracy
Advantages and Disadvantages of Bitcoin Cash
|Faster and less expensive transactions
|BCH has a weaker security
|Accessibility and availability in most crypto exchanges
|Environmental impact due to proof-of-work mechanism
|Competition from Bitcoin core (BTC)
|Highly scalable than Bitcoin
|It’s among the top 50 cryptocurrencies
Similarities Between BTC and BCH
Bitcoin and Bitcoin Cash are similar in several ways. Here are the areas:
In terms of blockchain, both cryptocurrencies operate on independent blockchains. Bitcoin Cash holds a larger block size than Bitcoin. Besides, Bitcoin Cash requires on-chain scaling through block size.
On the other hand, Bitcoin uses off-chain scaling with two different layers of technologies. Bitcoin Cash is also more robust than other highly volatile cryptocurrencies. It implements highly secure blockchain technologies to curb data leaks and other potential network threats.
Scalability and transaction costs
Upon its launch, Bitcoin Cash boasted superior scalability, which was one of its strongest selling points. In contrast to Bitcoin’s smaller block size, slower transaction speeds, and higher transaction fees, Bitcoin Cash offered a viable solution to meet the increasing demand for digital transactions.
The original Bitcoin’s high transaction fees and fixed market supply posed a significant challenge to its adoption. Recognizing these challenges, Bitcoin Cash was introduced to provide a more scalable alternative.
When it comes to usage, Bitcoin is seen more as a store of value than an actual currency. Often referred to as “digital gold,” it has finite stock that has earned it a lot of media coverage.
Bitcoin vs Bitcoin Cash: Which One to Choose?
All cryptocurrencies derive value from their adoption, usage, and demand level. Analysts consider their ROI (return on investment) and value growth in comparing Bitcoin vs. Bitcoin Cash.
Both Bitcoin and Bitcoin Cash are holders of value. While BTC still holds the most value, BCH is equally coming up as a stable cryptocurrency. It’s gaining both users and increasing in value fast. BCH is much younger than BTC, and so it’s still in the stages of establishing its space in the crypto market.
With its scalability and lower fees, BCH has much potential to become one of the top cryptocurrencies. If Bitcoin doesn’t solve its challenges conclusively, more people will want to switch to using BCH as their main store of value and transactional crypto asset.
On the other hand, Bitcoin has established its space in the crypto market, with many users finding it credible. So overall, it’s a question of weighing different factors between the two cryptocurrencies before choosing Bitcoin vs. Bitcoin Cash.
Is Bitcoin Better than Bitcoin Cash?
Determining which cryptocurrency, Bitcoin or Bitcoin Cash, is better depends on several factors, such as the intended use and investment goals.
If you need a faster cryptocurrency for small transactions, then Bitcoin Cash may be a better option due to its faster transaction speeds. However, if you are looking for a long-term investment, Bitcoin remains the most valuable cryptocurrency on the market.
Ultimately, the choice between the two depends on individual needs and objectives. It is crucial to evaluate the unique features and limitations of each before deciding.
Is Bitcoin Different from Bitcoin Cash?
Yes, Bitcoin and Bitcoin Cash are distinct cryptocurrencies with unique features. Bitcoin Cash emerged due to a “hard fork” from the blockchain.
The block size is one of the most significant differences between the two cryptocurrencies. Bitcoin Cash has a larger block size, resulting in faster and cheaper transactions than Bitcoin. However, the increased transaction speed can also compromise security.
While Bitcoin Cash has become more accessible to investors, it has not surpassed the popularity of Bitcoin. Despite being more expensive, Bitcoin remains the more widely used and accepted cryptocurrency in the market.
What Are the Features That Make Bitcoin Cash an Effective Medium of Exchange?
Bitcoin Cash’s features make it an effective medium of exchange for peer-to-peer transactions. It enables individuals to make digital payments that mimic traditional cash transactions.
One of the significant advantages of Bitcoin Cash is its low transaction fees, typically a fraction of a cent. Also, settlement times are almost instant, regardless of the physical location of the parties involved in the transaction. These features make Bitcoin Cash a practical and cost-effective option for both daily transactions and microtransactions.
Will the Price of Bitcoin Cash Go Up with Bitcoin?
It is difficult to predict Bitcoin Cash’s and Bitcoin’s price movements as they are separate cryptocurrencies with distinct market factors. While some crypto investor blogs may offer insights into the possible movement of each coin, it is essential to remember that all transactions carry inherent risks.
Investing in Bitcoin or Bitcoin Cash requires careful consideration and research, and any investment made should align with one’s investment goals and risk tolerance. Ultimately, the price movements of each cryptocurrency will depend on various market factors and cannot be accurately predicted with certainty.
Cryptocurrencies are volatile, and they carry more risk. While you can find Bitcoin and Bitcoin Cash in major crypto exchanges, the high cost of BTC could prevent some new investors from adopting it. On the other hand, Bitcoin Cash could be a good investment option if you’re considering a crypto asset that is similar to Bitcoin in many ways.
However, the fundamentals and the philosophies between the two cryptocurrencies should be a factor to consider too. Bitcoin could work better if you’re looking for a long-term store of value. If you’re looking for a medium of exchange for everyday purchases, then BCH would make a better option.