You need to know that Bitcoin Cash comes from Bitcoin itself. Bitcoin Cash nodes (computers) were once part of the Bitcoin blockchain. Bitcoin Cash is a fork of Bitcoin, this is one of the real differences between Bitcoin and Bitcoin Cash.
In this article, you will thoroughly know the differences between Bitcoin and Bitcoin Cash which are two separate cryptocurrencies.
You will learn more about their history, value, and potential for the future. After this, you will be able to decide which one you choose to invest in, or even if you want to invest in both.
First, let’s take a little look at Bitcoin and its background. Then, I’ll explain what a fork is. After that, we will take a look at the story behind Bitcoin Cash and its features.
Bitcoin
Bitcoin was the first cryptocurrency and for many years it was not very well known. Bitcoin is just like any other real currency. You can use it to buy, sell, and trade goods, services, investments and more.
The blockchain technology that makes it prevent Bitcoin from being counterfeited. It also means that it is not owned, excluded or controlled by any group or party.
For example, US dollars are issued by the US government and controlled by banks. In this scenario, the central parties are the government and the bank. When you transfer dollars to your friends, you are relying on the bank to authorize and process the transaction.
Bitcoin, on the other hand, is not issued or controlled by any central authority. Transactions on the blockchain are verified by the computers running the blockchain, and all of these computers can be owned by anyone – the blockchain is decentralized.
On the blockchain, transactions are stored and sent in blocks. All of these computers verify the entire block of transactions at once by solving complex mathematical problems. When the problem is resolved, all transactions in the block are verified and new Bitcoins are created – these Bitcoins are then passed on to the computer that solved the problem. This process is called mining or mining!
The total number of Bitcoin that has been and will be created is limited to 21 million. Even though there are more than 16 million Bitcoins already there, it will take a long time for the number of Bitcoins created to reach 21 million! This is because every 4 years, the number of Bitcoins created per block is cut in half.
As more and more people are trying to get hold of Bitcoin while the number of them is getting smaller and smaller, the general belief is that its value will increase. That’s why so many people are crazy about Bitcoin right now!
Currently, Bitcoin is the most valuable cryptocurrency on the market. Although other currencies attempted to outperform Bitcoin and reduce its dominance in the digital coin sector, only a few have come close to Bitcoin’s fame. However, Bitcoin Cash can be an exception due to the difference between Bitcoin and Bitcoin Cash!
Fork
There have been several Bitcoin forks, but none of them are as widely or well-known as Bitcoin Cash. A fork is formed when the original blockchain code is updated (or updated) but only a portion of the nodes (computers) on the blockchain agree to the update.
The original blockchain (like Bitcoin) remains the same, and the updated nodes separate from the original blockchain and make the new blockchain (such as Bitcoin Cash) and the coins on the blockchain separate and unique from those on the original blockchain.
Whoever held the original coin at the time of the fork will automatically receive the fork version of the coin they were holding. So, when Bitcoin branches into Bitcoin Cash, a person who owns 10 BTC will automatically receive an amount of BCH which is equivalent to the value of their 10 BTC.
Bitcoin Cash
Just like Bitcoin, Bitcoin Cash is a cryptocurrency that has its own blockchain. It works like a digital currency and new BCH (Bitcoin Cash) is created via BCH mining or BCH mining. It was created at the end of 2016, this makes it much younger than Bitcoin.
Bitcoin was forked to make Bitcoin Cash because the Bitcoin developers wanted to make some important changes to Bitcoin. The Bitcoin community developers were unable to agree on some of the changes they wanted to make. So, this small group of developers formed a branch of Bitcoin to create a new version of the same code with some modifications.
The changes that make all the difference between Bitcoin and Bitcoin Cash are the following:
- Bitcoin Cash has cheaper transfer fees (around $0.20 per transaction), so making transactions on BCH will save you more money than using BTC. BTC transactions can cost around $1 USD per transaction, although it has previously gone up to around $25 per transaction!
- BCH has a faster transfer time. So, you don’t have to wait 10 minutes to get Bitcoin transaction verification!
- BCH can handle more transactions per second. This means that more people can use BCH at the same time as compared to BTC.
All of these changes are due to the fact that the Bitcoin Cash block (on the blockchain) is eight times bigger than the Bitcoin block. This difference between Bitcoin and Bitcoin Cash makes BCH faster, cheaper, and more scalable than Bitcoin. Bitcoin Cash is becoming more and more adopted day by day because of this.
The War between Two Prices
As previously mentioned, cryptocurrencies like Bitcoin or Bitcoin Cash derive their value from how much they are adopted, used and demanded. We can analyze it in terms of ROI (Return on Investment) and value growth.
They are both holders of value, and while Bitcoin has held the largest share of value to date, Bitcoin Cash continues to gain users and value rapidly.
Many people speculate that Bitcoin Cash may take up a sizable share of Bitcoin’s market share, making it the new dominant crypto in the industry. This is because Bitcoin Cash has overcome the scaling problem facing Bitcoin, allowing more people to use it easily and at a lower cost.
If the Bitcoin developer community doesn’t find a way to agree to a reciprocal update to the Bitcoin code to solve the problem, Bitcoin might lose the battle between Bitcoin vs Bitcoin Cash. This means that more people will likely turn to using BCH as their primary store of value and transactional currency.
One of the things hindering BCH’s rapid growth is the confusion people have over the difference between Bitcoin and Bitcoin Cash. Many novice investors see Bitcoin Cash as a cheaper Bitcoin with a lower entry point into the market. This is because they have very similar names and come from the same community and brand.
The advantages of Bitcoin
As the original cryptocurrency, Bitcoin is the base currency of all sectors. This is what all other cryptocurrencies (as well as ETH, most of the time) are trading at and can be traded on most exchanges. Bitcoin is the most popular and has the most trading pairs with any other cryptocurrency.
As of March 23, 2018, Bitcoin made up 44.5% of all capital in the crypto sector and is considered the Gold standard of the fast growing industry.
The difference between Bitcoin and Bitcoin Cash is that Bitcoin has a much larger community than Bitcoin Cash and its followers seem like a cult: Bitcoin is the first cryptocurrency that people hear about.
Disadvantages of Bitcoin
The disadvantages of Bitcoin when compared to Bitcoin Cash is that it is mostly related to the scalability issues facing Bitcoin. Bitcoin is older, slower, and costs more per transaction. It is likely that as this sector grows, Bitcoin will continue to lose its dominance over these other coins.
Another disadvantages that sets Bitcoin and Bitcoin Cash apart is that the Bitcoin core development team is not as strong as other crypto teams, like Ether’s, for example. The Bitcoin team seems tenuous as a group and lacks clear leadership.
This makes implementing scalability solutions more difficult to agree on and implement into the network.
Bitcoin Cash Advantages
The main advantages of Bitcoin Cash is that it costs less and is faster to use. This is because it is more scalable, meaning that more people can transact on the blockchain at any time.
Its development team is quick to implement solutions that make the blockchain even more scalable. This provides great potential in the future for adoption and use.
One more difference between Bitcoin and Bitcoin Cash is that BCH is cheaper to switch between exchanges. Whenever the price goes up, it is a great trading asset or trading against Bitcoin and is also a solid investment to hedge Bitcoin, should Bitcoin lose its market dominance one day.
Disadvantages of Bitcoin Cash
Another difference between Bitcoin and Bitcoin Cash is that Bitcoin Cash does not have as much investor confidence as Bitcoin. In addition, the adoption and market penetration rates are much lower than Bitcoin. This has a lot to do with the fact that Bitcoin Cash is much younger than Bitcoin.
In terms of price, the difference between Bitcoin and Bitcoin Cash is that even though the BCH price is around 10-15% of the Bitcoin price, BCH mining costs are relatively the same as Bitcoin mining. This means that someone mining BCH makes 50-60% less profit than someone mining Bitcoin with the same device. For this reason, miners cannot mine Bitcoin Cash very fast.
Lastly, in terms of trading, BCH has significantly fewer trading pairs than BTC, making it less tradable than Bitcoin. All these shortcomings serve to make Bitcoin Cash’s adoption rate and price much lower than Bitcoin.
Where Can You Get Bitcoin and Bitcoin Cash?
One of the most popular exchanges for buying Bitcoin and Bitcoin Cash is Coinbase.
On this platform, you can use fiat money to buy popular cryptocurrencies (including Bitcoin and Bitcoin Cash) via credit cards, bank accounts, and more. Unfortunately, Coinbase is only available in 32 countries:
USA, Canada, UK, Switzerland, Sweden, Spain, Slovenia, San Marino, Portugal, Poland, Norway, Netherlands, Monaco, Malta, Liechtenstein, Latvia, Jersey, Italy, Ireland, Hungary, Greece, Finland, Denmark, Czech Republic, Cyprus, Croatia, Bulgaria, Belgium, Austria, Australia and Singapore.
If you are not in one of these countries and you want to buy Bitcoin Cash or Bitcoin, you can try other broker exchanges such as CoinMama or CEX.io.
If you use a broker that doesn’t sell BCH but sells BTC, you can always buy Bitcoin and exchange it for Bitcoin Cash on trading platforms like Binance and Indodax.
Another option for buying these coins with cash is to do so on a P2P (Peer-2-Peer; meaning between peers) exchange, such as LocalBitcoins. Again, you can only buy Bitcoin on P2P exchanges, but you can trade your BTC for BCH using the exchange trading afterwards.
Conclusion
A lot of people are under the impression that Bitcoin vs Bitcoin Cash is really at war, and one has to be better than the other. For practical reasons, Bitcoin Cash is a faster and cheaper asset to use for transacting on the blockchain.
But Bitcoin, as the original cryptocurrency, is the most widely adopted store of value and is currently the largest in the crypto market. This leads me to believe that these two coins can still play a role as a staple in this industry that is currently evolving and maturing.
BCH can become the main tool for transactions and moving money as more users adopt it. BTC can continue to be used as a store of value which is considered the gold of digital currency. Both stand to grow in value and adoption over time, making them an investment worthy of any investor to look at and consider.
Now that you know the difference between these two coins, you can better decide how you want to invest in them and how you will use them.
