If you are entirely new to the cryptocurrency world, then it’s common to have confusion regarding several terms. Bitcoin Cash and Bitcoin are the two terms that create the most confusion among users. However, if you want to make a clever investment in cryptos, you need to understand the concept fully. Learning the differences between Bitcoin and Bitcoin cash is essential to embark an informed journey as an investor.
In the crypto market, both of these coins are popular. But it must be noted that the origin of Bitcoin cash was due to the hard fork with Bitcoin. While there is some parallelism between both coins, there are also some critical differences. Moreover, Bitcoin Cash and Bitcoin are two individual currencies, and they shouldn’t be sent to each other’s addresses. You can learn more about them with bitcoin training.
Bitcoin Cash, as compared to Bitcoin, has a lower transaction cost and transfers data quickly. So, Bitcoin Cash can be used by more people at the same time. The maximum block size of Bitcoin Cash is 32MB compared to Bitcoin’s 1MB.
To help you get context on the subject, let us look into the similarity and differences between both of these currencies operating over the blockchain technology:
Table of contents
- Learn about Bitcoin
- Learn about Bitcoin cash
- What are the similarities between bitcoin cash and Bitcoin?
- What is the difference between bitcoin cash and Bitcoin?
- Closing Thoughts
Learn about Bitcoin
Bitcoin or BTC has been in existence since January 2009 in the crypto world. Its concept follows the formula written in the white paper by anonymous Satoshi Nakamoto. The actual creator or creators of Bitcoin are still unknown to the world. Bitcoin claims to provide lower transactional fees in comparison to traditional online payment systems. It operates over a decentralized system instead of any Central governing authority.
Moreover, it is a digital coin without any physical existence. It represents balances stored on the public lecture, which is accessible to every member of the network. Furthermore, enormous computing power verifies each bitcoin transaction. Also, no Bank or government backs the Bitcoin mechanism. Still, Bitcoin is a very influential digital money triggering formulation of hundreds of new cryptocurrencies. The other cryptocurrencies are known as altcoins. However, if you’re planning to invest in these coins, then we advise taking guidance from a good blockchain professional.
Learn about Bitcoin cash
Bitcoin Cash is a cryptocurrency that has been in existence since August 2017. It is a result of the Bitcoin fork. To tackle Bitcoin’s scalability issue, Bitcoin cash increases the size of blocks. By doing so, it allows more transaction processing. Hence, it improves scalability. Further in 2018, Bitcoin cash did split into two more parts: Bitcoin cash SV.2 and Bitcoin cash ABC. It is named Bitcoin cash as it represents the original Bitcoin cash client.
There are some primary supporters of Bitcoin Cash, such as Roger Ver. They often claim Nakamoto’s original conception of a payment system is the reason to expand the block size.
As per them, the alteration in bitcoin’s block size will encourage bitcoin’s usage as a platform for daily transactions. And to further help it fight with global credit card processing institutions. For example, Visa, which demands high taxes to perform transactions across the globe.
Furthermore, Bitcoin Cash developers can employ smart contracts languages such as Cashscript to empower more complex equations than the ordinary exchanges possible on Bitcoin. This increases the probability of ‘decentralized finance’ applications. In addition to this, other use cases incorporate tools for private payments like CashFusion and CashShuffle. Likewise, It takes ‘token issuance’ into account.
Developers of bitcoin cash provide new tokens to operate over the bitcoin cash blockchain using a simple ledger system. This is similar to how ERC20 tokens operate over the Ethereum blockchain.
For instance, the biggest guarantor of USD stablecoins, Tether, provides USDT tokens that operate on the Bitcoin Cash chain. Further, this empowers individuals to trade USDT for pennies per exchange utilizing a non-custodial digital wallet. A bitcoin course will be helpful for you to understand this topic more deeply.
What are the similarities between bitcoin cash and Bitcoin?
There are a few similarities between Bitcoin cash and Bitcoin. To mine new coins, both utilize the Proof of Work (PoW) consensus method. Likewise, they take the Bitmain services, which is the most significant cryptocurrency miner in the world.
The stockpile of Bitcoin caps 21 million, an identical figure as Bitcoin. Additionally, bitcoin Cash utilizes a similar mining complex algorithm. This algorithm is called Emergency Difficulty Adjustment (EDA). Further, this algorithm changes after two weeks or after the 2016 blocks.
What is the difference between bitcoin cash and Bitcoin?
Bitcoin cash processes transactions at a much quicker rate. One principle distinction between Bitcoin cash and Bitcoin is the blocks’ size on each chain. At the point when the block size limit of bitcoin was 1 MB, Bitcoin Cash offered a limit of 8 MB block size. Presently, bitcoin cash’s block size limit is 32 MB. However, the block limit of bitcoin is still modest. Generally, the greater block size permits Bitcoin Cash to deal with exchanges at a lot quicker rate than Bitcoin.
Additionally, Bitcoin Cash can execute around 116 exchanges each second, while Bitcoin can run around seven overall. In comparison, Visa conducts 24,000 exchanges each second. In spite of the fact that BCH has a quicker exchange speed, it’s not as broadly acknowledged as BTC and isn’t as liquid. Additionally, a hard fork from Bitcoin Cash, called Bitcoin SV, likewise exists.
Bitcoin was intended as a peer-to-peer cryptocurrency, used for daily transactions, as suggested by Bitcoin founder Satoshi Nakamoto. Over the years, Bitcoin became an investment vehicle instead of a money, as it acquired popular traction and increased its price. Its blockchain experienced scalability problems since the growing quantity of transactions could not be dealt with. The confirmation time and costs for a Bitcoin blockchain transaction increased. This was largely because of the 1MB restriction on bitcoin block size. The transactions queued up and waited until confirmation, because the transactions could not be handled by blocks.
In order to fix this problem, Bitcoin Cash recommends that blocks should increase to between 8 and 32 MB, enabling more transactions to be processed each block.
So, these are the similarities and differences between bitcoin cash and bitcoin. However, the discussion over whether Bitcoin will at any point get the acknowledgment as a payment system seethes on. And it doesn’t seem to end anytime soon. In the meantime, the reception of the first cryptocurrency as an investment is developing as investors desire to benefit from its expanding fame. Also, bitcoin cash might completely eliminate the scalability issue from the network.
Learn more on the subject under the guidance of the best cryptocurrency professional and enhance your knowledge at the BLOCKCHAIN COUNCIL. We at Blockchain Council are working hard to make learning Blockchain technology so easy that anyone can learn and become an expert without any time and location barrier. Our certification courses are totally online, anybody can learn from anywhere. The platform offers relevant certification courses regarding blockchain technology. With the right knowledge and courses you can gain applicable skills and opt to become a great bitcoin developer.