Bitcoin vs Bitcoin Cash

Samuel Gitonga
9 Min Read

History has a peculiar way of repeating itself.

That’s true, and there are endless examples. But there are instances where the probability of events happening again is next to nil.

In 2010, Laszlo Hanyecz, an American programmer, bought two pizzas for 10,000 Bitcoin. In today’s market, that’s worth more than $200 million. It’s ironic because his peers who made moves around the same time are now walking crypto success stories.

That purchase was the first-ever Bitcoin transaction. Consequently, the global cryptocurrency community commemorates May 22 as Bitcoin Pizza Day.

Such is Bitcoin’s impact on the financial system that there are more than 100 Bitcoin spinoffs today. This Bitcoin vs Bitcoin Cash review examines one of them and compares it to the most valuable cryptocurrency.

Bitcoin vs Bitcoin Cash: A Side-by-Side Comparison

In the cryptocurrency industry, a hard fork occurs when a group of developers and miners can’t agree on updates to the software governing a particular digital token.

This is what happened in August 2017, leading to a hard fork that split the Bitcoin blockchain in two.

While the subsequent sections cover every relevant detail, our side-by-side comparison table below serves as an illustrative abstract.

Bitcoin Bitcoin Cash
Launch Date January 2009 August 2017
Consensus Mechanism Proof of Work Proof of Work
Platform Speed 7 Transactions per Second (TPS) 100 Transactions per Second (TPS)
Market Capitalization $406 billion as of November 6, 2022 $2.4 billion as of November 6, 2022
Circulating Supply 19.2 million BTC 19.2 million BCH

The standout statistic from the above Bitcoin Cash vs Bitcoin summary is how much more valuable BTC is. Platform speed is another interesting variable.

Aside from that, the two platforms are very similar. They apply the same consensus mechanism, and their supply limit is the same.

This BTC vs BCH review will examine each platform to conclude where your best investment chances lie.

What Is Bitcoin?

Bitcoin is a virtual currency designed to act as money.

It is unique and different from fiat because it is free from control by any person, group, or entity, thus eliminating the need for third parties in financial transactions.

How does Bitcoin work?

Without a middleman, Bitcoin transactions are secured and verified using cryptography – a scientific method of encoding and decoding data.

The transactions are stored on computers spread across the world via distributed ledger technology known as a blockchain.

Its backstory is of great significance. In 2009, an anonymous developer/group of developers by the pseudonym Satoshi Nakamoto launched Bitcoin. Soon after, the native cryptocurrency took off like wildfire. One of the reasons for this is timing and context. This was shortly after the 2007-2008 financial crisis when trust in mainstream financial institutions was at its lowest ebb.

What is Bitcoin used for?

Bitcoin is primarily used as a virtual currency to enable people to exchange goods and services. Plenty of businesses accept Bitcoin payments. They include Microsoft, Twitch, Whole Foods, and Home Depot.

The token is also used to compensate miners for adding new transactions into circulation.

What Is Bitcoin Cash?

Bitcoin Cash is a decentralized, proof-of-work cryptocurrency built on the same blockchain as Bitcoin. It was created through a hard fork of the Bitcoin blockchain network.

Since then, it has developed its own community and regularly features amongst the top 30 most valuable coins per cryptocurrency statistics.

The BCH vs BTC split was triggered by disagreements on the best way to increase transaction limits.

Bitcoin Cash proponents argued that the best way to scale was to increase the size of a block. They observed that this would allow faster and cheaper transactions.

Bitcoin supporters advocated for smaller blocks. Failure to build consensus culminated in a split.

How does Bitcoin Cash work?

Although both cryptocurrencies use the Proof of Work consensus mechanism, Bitcoin Cash was designed to solve Bitcoin’s scalability issues. Jolted by a larger block size capacity, Bitcoin Cash can process up to 100 transactions per second compared to Bitcoin’s 7.

What is Bitcoin Cash used for?

Unlike most cryptocurrencies that act as a store of value, Bitcoin Cash is a transactional cryptocurrency. However, the asset is grossly underused since not many businesses accept it.

Similarities Between Bitcoin and Bitcoin Cash

The question many are likely to ask is, are Bitcoin and Bitcoin Cash the same thing?

Despite their philosophical differences, Bitcoin and Bitcoin Cash have some technical similarities.

For instance, did you know that Bitcoin and Bitcoin Cash share the same white paper?

That’s not all. We expound on other similarities below.

  • Origins: As elaborated earlier, BCH was forked from BTC after philosophical disagreements split the Bitcoin community right down the middle.
  • Supply: When Satoshi introduced Bitcoin to the world, he envisioned limited supply to make the coin the digital gold of its day. Bitcoin Cash subscribes to the same school of thought. So how many Bitcoin Cash coins are there? The maximum supply of both assets is capped at 21 million.
  • Consensus mechanism: Both use Proof of Work (PoW) to validate transactions.
  • Reward system: The two communities also employ a similar compensation scheme. Bitcoin miners receive a specified amount of BTC for their work, while Bitcoin Cash miners receive BCH.

What Is the Difference Between Bitcoin and Bitcoin Cash?

While the two assets share a common history, there are several differences between Bitcoin and Bitcoin Cash.

  • Block size: Bitcoin Cash uses a larger block size than Bitcoin. Each Bitcoin block is 1 MB in size. Bitcoin Cash expanded the block size to 8 MB and later to 32 MB.
  • Transaction speed: The Bitcoin network typically processes 7 transactions per second. Bitcoin Cash can process 100 transactions per second.
  • Market capitalization: Their valuations are also worlds apart. Bitcoin is not only more valuable than BCH, but it is also the most valuable cryptocurrency. As of November 10, 2022, Bitcoin’s market capitalization was $335.6 million. At the same juncture, Bitcoin Cash had a market cap of $2 billion.
  • Fees: Due to limited block space, Bitcoin transaction fees are higher. They typically range between $1-$2 but can go as high as $60 per transaction. On the other hand, Bitcoin Cash fees never exceed a fraction of a cent. This is due to the large block size capacity and less demand for the token.
  • Smart contracts functionality: Another notable difference is that Bitcoin does not support smart contracts. Bitcoin Cash has begun using smart contract languages like Cashscript to power more complex functions.

Where to Buy Bitcoin and Bitcoin Cash

If your research concludes that investing in Bitcoin Cash or Bitcoin is a good move, here are some of the best exchanges where you can buy BTC, BCH, or any other altcoin.

[blog_table]

Final Thoughts

When making investment decisions, your strategy should always take into account the asset’s volatility and the risk involved. Regarding the choice between Bitcoin Cash vs Bitcoin, there are some specific things to consider.

First is that Bitcoin’s price is beyond the reach of some investors. As such, Bitcoin Cash offers a great way to start small.

Another significant factor to consider is suitability. Bitcoin is suited to long-term investments, while Bitcoin Cash is tailored for day-to-day purchases.

Therefore, it is safe to say that whereas they are cut from the same cloth, they offer different value profiles.

Consequently, the choice between Bitcoin or Bitcoin Cash should be determined by your goal.

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *