https://nasacademy.com/blog/article/bitcoin-vs-bitcoin-cash
One of the most recognizable coins in the world of crypto is Bitcoin. It is well known in the mass market, has the largest market cap of any cryptocurrency, and is the most widely accepted and used. One cryptocurrency that you may or may not have heard of uses similar technology to Bitcoin. A few years ago, developers created Bitcoin Cash as a fork off of the main Bitcoin network. This is all you need to know about Bitcoin vs Bitcoin Cash.
Since Bitcoin was created, there have been questions about its scalability. Bitcoin transactions are stored, verified, and processed using a digital ledger called a blockchain. This makes ledgers far more difficult to manipulate or change because a transaction has been verified by many nodes, not just one. The Bitcoin network is also decentralized, which means that it exists on all computers and not one central computer.
The main issue with blockchain technology is that it takes a significant amount of time to process, especially when you compare it to a credit card transaction. Bitcoin transactions can take several minutes or more to process, and as the bitcoin network has grown, the transaction processing time has grown with it.
To combat the uncertainty around scaling Bitcoin’s technology and the speed of network transactions, two main solutions were developed:
From these solutions, Bitcoin Cash (BCH) was developed. Let’s take a closer look at the specific differences between Bitcoin and Bitcoin Cash.
In 2017, companies and mining pools that made up around 90 percent of Bitcoin’s computing power decided to integrate a technology called Segregated Witness (SegWit). This was done in order to decreases the amount of data in each block that needs to be verified, by removing signature data and attaching it to an extended block. Signature data has been said to make up around 65 percent of the data in every Bitcoin block, so this was a worthwhile fix to implement.
Increasing the size of Bitcoin blocks was also explored in 2017 and 2018, and by February 2019, the average size of a Bitcoin block was 1.305MB. The size of these blocks is still increasing, with the average size in January 2022 being 1.39MB. A larger block size is helpful for processing more information and helping to scale Bitcoin, but because the network is also growing all of the time, it is hard to say what (if any) difference these upgrades have made to the speed of transactions.
Bitcoin Cash has quite a different backstory. It was created because of the concerns around scalability and the general future of Bitcoin. There were also quite strong reservations about the SegWit2x technology, as the creators thought that it did not solve the issues with scalability fully and did not adhere to the original road map set forward by Bitcoin’s creator Satoshi Nakamoto.
Moreover, integrating SegWit2x going forward did not have a clear road map, and they were concerned that the democratization and decentralization of the currency would be undermined. This is why in 2017, some developers and miners created their own currency, Bitcoin Cash (BCH).
BCH has its own specifications and blockchain, and one clear difference from Bitcoin. They implemented a block size of up to 8MB to speed up the transaction verification process, and the level of difficulty was adjustable, to ensure the transaction verification speed didn’t slow down no matter the amount of activity on the network. In October 2021, the biggest block size supported by BCH was increased to 32MB, huge in comparison to Bitcoin’s 1.3MB.
What does this mean? Bitcoin Cash can process transactions at a faster speed than Bitcoin, resulting in shorter waiting times and fewer fees. The Bitcoin Cash network can also handle much more transactions happening simultaneously than Bitcoin. This might seem like all good news, but there some downsides to quicker transactions.
One concern that is linked to the larger block size that is used on the Bitcoin Cash network is that security could potentially be an issue when compared to Bitcoin. Also, because Bitcoin Cash does not nearly have the market cap that Bitcoin does, users that purchase BCH could run into issues when they are trying to liquidate or use it in the real world.
The debate about the future of Bitcoin rages on and doesn’t show any signs of stopping any time soon. Bitcoin Cash experienced its own split in November 2018, with some of its members going on to create another Bitcoin derivative called Bitcoin SV. This new cryptocurrency was created as the developers felt that Bitcoin Cash did not follow the original road map for Bitcoin in their efforts to increase transaction times and increase scalability.
Both of these cryptocurrencies were created as online currencies, however, their adoption has been hindered due to the volatility in their value. Imagine if you went to buy a coffee for $5 today, and then you went back tomorrow, and the same coffee cost $20 because the price of the coin went down, that would be a huge loss for you, and very annoying! It is also important to remember that cryptocurrencies like Bitcoin and Bitcoin Cash have value only because people think they do. They are not tied to any assets or companies, and their value depends on the speculation around them. This is what makes these coins so volatile.
Many people shy away from getting involved with cryptocurrency because they are either confused or intimidated by this new technology. If that sounds like you, check out our Nas Academy web3 community to increase your knowledge and confidence with crypto and begin investing soon!
By Admin Nas Academy
By Admin Nas Academy
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