One of the facts about blockchain is that they can be forked or split to form separate blockchains.
That’s what happened to Bitcoin in 2017 leading to the emergence of two separate coins that are now ranked 1st and 4th on the cryptocurrency market by market capitalization.
There are over 1,600 cryptocurrencies listed on market ranking site CoinMarketCap.com. With so many coins coming up, it’s good to know the differences between two of the leading coins.
Upfront, there aren’t monumental differences between Bitcoin (BTC) and Bitcoin Cash (BCH).
Although Bitcoin (BTC) is regarded as the trailblazer of cryptocurrency, the original coin, the newer version sees itself as being better.
Bitcoin Cash (BCH) vs. Bitcoin (BTC)
Bitcoin Cash is a fork of the original Bitcoin chain that occurred on August 1, 2017.
The fork was supported by a group of miners, Bitcoin developers, and user community that didn’t agree with the proposed implementation of segregated witness (SegWit).
The proposed upgrade was meant to help solve problems of scalability affecting the network at the time.
At the launch of the new coin, BCH supporters and proponents affirmed that it was necessary to fulfill the visions by Satoshi in the original whitepaper.
What they needed was to have a currency that would adhere to decentralization, provide high-volume transaction network, and reduce fees so that everyone would be able to use the coin.
In other words, they felt that Bitcoin had become more centralized, too slow, and too expensive for users.
Supporters of Bitcoin Cash looked at SegWit as being an inadequate solution to the problem of scalability. It also was against what Satoshi had envisioned, especially with off-chain solutions.
Even if the upgrade was done, the pro-BCH team felt that the way forward lacked transparency and would undermine the blockchain’s decentralization and democratization.
Some of the high profile supporters of the coin were Roger Ver, Daedal Nix, and Jihan Wu. They are some of the most vocal opponents of the Bitcoin (BTC) platform.
In short, the difference is that BTC chose to implement SegWit and has Lightning Network while the BCH community disagreed and pursues on-chain scalability.
What are the other differences?
There are three fronts that present differences between the two coins. These are block size, fees, and transaction volume.
One of the main differences is block size. BTC has a block size of 1MB while BCH has an adjustable block size of 8MB. Recent upgrades have moved that to 32MB block size.
Bitcoin is pursuing Layer-2 implementations like Lightning Network to solve scalability issues. However, as seen above, Bitcoin Cash view bigger blocks as key to faster and cheaper transactions.
Bigger blocks, which are an on-chain solution, allow for millions of transactions per day. Likewise, LN could potentially allow for millions of transactions once the implementation is complete.
On-chain scalability gives Bitcoin Cash immediate advantage of taking on more transactions than the yet to be fully implemented off-chain solutions.
At the moment, Bitcoin Cash appears to be ahead of BTC in terms of speed and thus could command much more traffic.
According to the BCH developers, what they want is a reliable, cheap and highly scalable network that will spur rapid adoption of the coin.
Nevertheless, BTC still leads the latter in terms of total transactions per day with an average of 200,000 compared to 20,000.
But if Bitcoin Cash was to fully utilize the 8MB block, it would support up to 5.7 million transactions per day, whereas BTC could only get to 600,000 without Lightning Network.
The other difference is on transaction fees. Bitcoin cash fees average $0.04 per transaction while BTC’s is an average of $2.00.
Thus, the former is a better coin for small payments and everyday use. The latter on the other hand may only be used for huge transfers.
It is on this premise that Bitcoin Cash may become globally adopted as a medium of exchange and payment currency while BTC ends up being a store of value. However, LN may change everything.
The growth of Bitcoin Cash means that it has the potential to carve space for itself in the market.
On the other hand, Bitcoin (BTC) must find lasting solutions to scalability to stay competitive.