Bitcoin vs. Bitcoin Cash
Bitcoin (BTC) is the best-known cryptocurrency by far. Because of its status as the first cryptocurrency ever to exist, Bitcoin has received much media attention. However, since its launch, experts have expressed concern about its multiple shortcomings as a payment system. In particular, they have identified scalability as a major issue.
When compared to traditional banking, Bitcoin is slow. As of January 31, 2022, the Bitcoin network could process only 4.43 transactions per second. For comparison, payments provider Visa Inc. processes 6,527 transactions per second on average. Then, the confirmation of each BTC transaction can take up to 10 minutes. Such long processing times make Bitcoin unpractical for instant payments.
These waiting times increase as more people use the Bitcoin network. When the demand exceeds the network capacity, a backlog of unconfirmed transactions starts forming. In this case, the network gives preference to transactions with higher fees attached. This mechanism can make transaction fees reach very high levels. To cope with the problems above, Bitcoin’s technology should be modified. Experts have proposed two viable solutions:
- To reduce the amount of data that needs verification in each block. In this way, transactions become faster and cheaper.
- To make data blocks bigger so that more information is processed at once.
Bitcoin Cash (BCH), a newer cryptocurrency, has implemented the second of the above solutions to become a more practical payment system. How do Bitcoin and Bitcoin Cash compare? What are the differences and similarities between these two digital coins? Which one should you invest in? Let us discuss these topics in our following Bitcoin vs Bitcoin Cash comparison.
Bitcoin Overview
Bitcoin was created by a person (or a group of people) using the pseudonym Satoshi Nakamoto. The idea for a peer-to-peer (P2P) decentralized payment system was written down in a 2008 white paper. In January 2009, this idea materialized with the launch of Bitcoin. The primary goal of this cryptocurrency was to allow payments between two users without an intermediary like a financial institution.
Bitcoin Cash Overview
Bitcoin Csh is also a P2P decentralized payment system, aiming to provide fast transactions, micro-fees, privacy, and high transaction capacity. Bitcoin Cash forked from Bitcoin on August 1, 2017. The proponents of this new cryptocurrency sought to implement bigger blocks into the original Bitcoin code. There are remarkable improvements that make Bitcoin Cash faster and cheaper. However, from a technical perspective, both cryptocurrencies are very similar.
BTC vs. BCH: Price
As of June 23, 2022, Bitcoin traded at around $21,122.07 per coin. This price is 69.32% less than its all-time high price of $68,789.63, reached on November 10, 2021. Bitcoin is the most valuable cryptocurrency by market capitalization, with a current market cap exceeding $402.6 billion.
For its part, Bitcoin Cash traded at around $116.40 as of June 23, 2022. Its all-time high price on December 20, 2017, was $4,355.62, meaning this coin has depreciated 97.33% relative to this value. According to CoinMarketCap, Bitcoin Cash is the 29th most valuable cryptocurrency by market capitalization, with a value of over $2.2 billion.
BTC vs. BCH: Total Supply
Both Bitcoin and Bitcoin Cash have a capped maximum supply of 21 million coins. On June 23, 2022, Bitcoin’s circulating supply was 19,075,418 BTC coins, whereas Bitcoin Cash’s was 19,098,813 BCH coins.
What Are the Differences between Bitcoin and Bitcoin Cash?
When Bitcoin Cash forked from Bitcoin, the main difference between these two cryptocurrencies was the block size. Over the years, the differences have grown significantly as each network pursues different goals. Below, we summarize the most remarkable differences.
1. Block Size
Bitcoin block size has been 1 MB since its launch in 2009. In July 2017, the Bitcoin community voted to incorporate Segregated Witness (SegWit). This technology reduces the amount of data that needs verification in each block, thereby speeding up the transaction processing time of the network. There have been talks about doubling the Bitcoin block size to 2 MB. Proposals to implement SegWit and a block size of 2 MB were referred to as SegWit2.
In contrast, Bitcoin Cash has implemented an increased block size of 8 MB. Currently, the maximum block size for Bitcoin Cash is 32 MB. As a result, the BCH network can process up to 200 transactions per second, and transaction fees tend to be lower. On the downside, the larger block size can compromise data security.
2. Smart Contracts and Decentralized Finance (DeFi)
Bitcoin does not support smart contracts. However, developers are working toward building decentralized finance (DeFi) services on top of the Bitcoin blockchain. In contrast, Bitcoin Cash has started using smart contract languages like Cashscript to implement this functionality soon. With Cashscript, developers expect to make Bitcoin Cash competitive in the DeFi arena.
3. Token Issuance
Blockchain projects can issue tokens on top of the Bitcoin blockchain through the Omni layer. This platform allows for creating and trading custom digital assets and currencies. So far, Omni has been used primarily for the issuance of stablecoins. On the other hand, Bitcoin Cash has released the Simple Ledger Protocol (SLP). With this solution, developers can issue tokens on the BCH blockchain, similar to Ethereum. SLP also supports non-fungible tokens (NFTs). However, neither Omni nor SLP have been widely adopted.
What Are the Similarities between Bitcoin and Bitcoin Cash?
Despite the differences described above (and others that were omitted), Bitcoin Cash and Bitcoin are very similar from a technical perspective. Both cryptocurrencies utilize proof-of-work (PoW) consensus mechanisms and nodes to verify transactions. They also have a maximum supply of 21 million coins.
Conclusion
Bitcoin Cash is a hard fork from the Bitcoin blockchain. Although it is a separate cryptocurrency with its own blockchain, from a technical perspective, Bitcoin Cash is very similar to Bitcoin. Bitcoin Cash has implemented several changes to the underlying Bitcoin technology, resulting in faster and cheaper transactions. As such, Bitcoin Cash is an effective medium of exchange.
However, the larger block size of Bitcoin Cash could compromise the security of this cryptocurrency. Despite its technical benefits, Bitcoin remains the most popular cryptocurrency worldwide. Therefore, users could find that BCH has lower liquidity and usability in real-world applications.
LetsExchange.io lists these two cryptocurrencies for trading. You can swap them for other cryptocurrencies at competitive rates on our platform. You can choose between more than 710 digital coins and tokens.
FAQ
Does Bitcoin Cash Have a Future?
Bitcoin Cash is a more practical P2P payment system than Bitcoin. However, Bitcoin Cash has not been widely adopted yet. Proponents of this cryptocurrency expect mass adoption to happen soon because of its scalability and fast processing. However, in the current bearish crypto market, Bitcoin Cash has lost most of its value. This cryptocurrency will likely survive such depreciation, but its recovery might take a long time.
Is Bitcoin Cash the Same as Bitcoin?
No. Bitcoin Cash is a separate cryptocurrency from Bitcoin with its own blockchain.
Is Bitcoin Cash the Real Bitcoin?
Proponents of Bitcoin Cash argue that this cryptocurrency is more in line with the vision of Satoshi Nakamoto, the creator of Bitcoin. However, despite its technical shortcomings, Bitcoin has remained the most popular and valuable cryptocurrency over the years. So, no, Bitcoin Cash is not the real Bitcoin.
Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.
Stay tuned for further updates, crypto guides, and market insights from LetsExchange. You can also follow us on Twitter, Facebook, Reddit, Instagram, LinkedIn, Medium, Quora, Telegram, Steemit, and Bitcointalk for first-hand information from our team.