The cryptocurrency space is filled with controversies, misunderstandings, broken partnerships, or other type of conflicts, which is quite surprising considering how young it is. However, it might be surprising to learn that some of the largest splits actually came from Bitcoin’s own ecosystems – its own family. The best-known example of this was the birth of Bitcoin Cash, which took place in the summer of 2017.
Now, we have already discussed Bitcoin, as well as Bitcoin Cash, as individual projects. We have explained how they came to be, what are their goals, and alike, and you can check that out in their own dedicated articles.
For now, let’s just say that the split in the crypto community was caused due to the disagreement between the developers, which was originally caused by one of the issues as old as Bitcoin itself — scalability. The problem of scalability was noticed as soon as Bitcoin’s white paper was released, back in 2008.
Many have noticed that Bitcoin’s block size is simply too small to accommodate large numbers of users. Not only are the blocks small, but the blockchain itself is slow, taking approximately 10 minutes to solve a single block. Over the years, many have tried to come up with a solution for these issues, and right now, Bitcoin’s Lightning Network seems like the best way to go about it.
However, at one point, a group of developers believed that the key might lie in expanding Bitcoin’s block size. This is where the split came to be, as some developers wanted to keep it the way it was, and others to expand its transactional capabilities. In the end, the conflict resulted in a hard fork that split the blockchain and marked the birth of Bitcoin Cash — a new blockchain which had a much larger block size. Bitcoin’s community also split, and the two groups went their own, separate ways.
How are Bitcoin and Bitcoin Cash different from one another?
You might be wondering — what exactly is the difference between the two? Well, the first thing to note is that Bitcoin can only handle around 7 transactions per block, while each block takes 10 minutes to be solved. Meanwhile, Bitcoin Cash is four times faster, with the ability to solve a block within 2.5 minutes. Meanwhile, its block size grew to be 8 MB, whereas Bitcoin’s block size started off with 1 MB, and was eventually increased to 2 MB.
In other words, the two biggest differences are the size and speed, where Bitcoin Cash blocks are four times larger, and its blockchain four times faster.
However, in terms of security, many believe that Bitcoin’s blockchain is superior to that of BCH. This comes from the fact that Bitcoin has a lot of mining pools, with none of them dominating over others in a way that would allow it to take control over 51% of its network and endanger the decentralization of the project.
Bitcoin Cash also uses a different transaction signature, and a new algorithm, which cemented its split from BTC forever.
Where should each crypto be used?
Another thing to note about Bitcoin and Bitcoin Cash is that they might have different uses. As we all know, Bitcoin was created to become the new form of online money — a digital currency, that would replace traditional currencies as a method of payment.
It took quite a lot of time, but Bitcoin is definitely on its way of becoming this payment method, with the number of services and merchants that are accepting it being on the rise around the world. However, with the Bitcoin price seeing major surges and reaching incredible heights — a lot of people started assuming that this will not be Bitcoin’s real future.
While it was created to be a simple transactional currency, its brand, price, and potential seem to indicate that BTC might become something more someday. Something like a store of value, a version of digital gold. This is another reason why BCH was launched, with a group of concerned developers and miners wishing to ensure that the Bitcoin ecosystem will have a coin that will be used solely for making transactions. In other words, they wanted to make a version of Bitcoin that will do what BTC was originally made to do.
This is why Bitcoin Cash is called CASH — which indicates the way in which it should be used. Meanwhile, Bitcoin itself appears to be evolving in a cryptocurrency whose use in everyday transactions will slowly fade away. Its slow blockchain and small blocks will prove too impractical for making payments for a cup of coffee each morning, and the coins will eventually be used for investments and store of value, instead of handling regular payments.
Of course, there is no guarantee that BCH will be the one to inherit Bitcoin’s original purpose. With so many altcoins around, most of which are much faster and more capable than BCH — the coin’s fate has yet to be decided. Maybe it will continue to exist simply due to the ‘Bitcoin’ part of its name. Maybe it will see new updates and improvements that will make it even more capable. And maybe it will sink in years to come, and end up being replaced by another candidate.
Bitcoin vs. Bitcoin Cash: Pros and Cons
Finally, let’s talk about the pros and cons of each of these coins. What are the strengths and weaknesses of BTC, and what of BCH? The decision of which is better to use and invest in falls on you as the user, as always, but for now — here is what marks each of the two coins:
- The first and largest cryptocurrency
- Well-known brand
- Confirmed not to be a security by the SEC
- Highly valuable
- Fully decentralized
- One of the safest coins in the world
- Great investment opportunity
- Protection from payment fraud
- Accepted worldwide, with ever-growing use cases
- Limited total supply
- Can be exchanged for any altcoin
- Listed on pretty much all exchanges
- Fast and cheap cross-border payments
- Provides access to historically inaccessible markets
- Extremely volatile
- Used for financing illegal and immoral activities
- High risk of loss
- Slow blockchain
- Small block size
- Not regulated
- Difficult for individual mining
- Mining is expensive
- High transaction fees
- Conversion to fiat currencies can be expensive
- Transactions are not reversible — once the coins leave your wallet, you won’t get them back
- Securing it requires cybersecurity knowledge and awareness
Bitcoin Cash pros
- Larger block size than Bitcoin
- Faster than Bitcoin
- Has ‘Bitcoin’ in the name — can make use of Bitcoin’s brand
- Might inherit Bitcoin’s place as a main transactional cryptocurrency
- Safe from replays and wipeouts
- Listed on major exchanges
- Exchangeable against many other altcoins
Bitcoin Cash cons
- Investors do not have much faith in it
- Not as fast as newer altcoins
- Low adoption compared to Bitcoin
- Security is questionable
- Not regulated
- High volatility
- Securing your funds requires cybersecurity knowledge and awareness
In the end, Bitcoin and Bitcoin Cash share many similarities, but there are also quite a few differences. In the end, the question of which is better is not easy to apply, as we cannot know what the coins will evolve into in years to come. If Bitcoin takes up the role of the store of value, the spot for the main transactional currency will be open, and BCH might take it.
Alternatively, it might not. Maybe cryptocurrencies will remain where they are right now, even though this is unlikely. In truth, the question of which is better can only be answered once we get to know the final versions of these coins, as well as their final use cases and abilities, which is still far into the future. In other words, this question cannot be answered now, and all we can do is wait. Of course, you can always make your own decision right now, although that comes with the risk of making the wrong call. Always remember that there are no certainties within the crypto space, which might change in the distant future.
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