In 2008, a new technology was introduced to the world that promised to revolutionize how we buy and sell goods and services online. This technology was called Bitcoin and quickly became one of the most talked-about innovations. However, after several years of successful operation, a disagreement among its users led to a split, creating a new cryptocurrency called Bitcoin Cash.
Since its inception, Bitcoin Cash has been frequently compared to bitcoin. While both share a similar name and purpose, several key differences set them apart. This article will explore the differences between bitcoin and Bitcoin Cash, including their origins and differences, to help you better understand which cryptocurrency may be right for you.
Key Takeaways
- Bitcoin is the first and most valuable cryptocurrency in the world. It is a decentralized digital currency that operates without the need for any intermediary institutions such as banks. On the other hand, Bitcoin Cash is a hard fork of bitcoin that came into existence in August 2017.
- Bitcoin Cash transactions are processed faster than bitcoin due to their larger block size of 32MB.
- Bitcoin and Bitcoin Cash allow users to securely store their funds and make payments without going through a third party.
- Another key difference is the transaction fees; Bitcoin Cash tends to have lower fees compared to Bitcoin.
The table below highlights the major comparison between Bitcoin and Bitcoin Cash.
| Criteria | Bitcoin | Bitcoin Cash |
|---|---|---|
| Launch Year | Created in 2009 | Created in 2017 as a hard fork of Bitcoin |
| Transaction processing time | Can take up to 10 minutes | Usually less than 10 minutes |
| Market cap | $585,163,046,062 (as of 13-04-2023) | $2,540,879,481 (as of 13-04-2023) |
| Mining algorithm | SHA-256 | SHA-256 |
| Acceptance | Widely accepted by merchants and online stores | Less widely accepted compared to Bitcoin |
| Development community | Led by the Bitcoin Core development team | Led by the Bitcoin ABC development team |
What Is Bitcoin (BTC)?
Bitcoin (BTC) is a digital currency that operates on a decentralized public ledger called the blockchain. It was created in 2009 by an unknown individual or group using the pseudonym Satoshi Nakamoto. Unlike traditional currencies, bitcoin is not backed by governments or financial institutions but rather by its network of users who exchange and validate transactions.
Bitcoin transactions involve the transfer of digital tokens or coins from one user to another using a public address and a private key. The process is pseudonymous, meaning the user’s identity is not revealed, but their public address is visible.
Bitcoin uses the popular proof-of-work (PoW) consensus mechanism, which involves miners solving complex mathematical equations to validate transactions and add them to the blockchain. The first miner to solve the equation gets rewarded with newly minted bitcoins. PoW is an energy-intensive and resource-consuming process requiring specialized hardware and software.
Bitcoin has a maximum supply of 21 million coins, which are expected to be fully mined by 2140. The limited supply is intended to preserve the value and scarcity of digital assets.
What Is Bitcoin Cash (BCH)?
Bitcoin Cash (BCH) is a cryptocurrency that emerged from a hard fork of the Bitcoin blockchain in 2017. BCH was created as an alternative to bitcoin to address scalability and high transaction fees. It is a decentralized, peer-to-peer electronic cash system that operates without relying on central authorities like governments or financial institutions.
The main difference between bitcoin and Bitcoin Cash is the block size. BCH has larger blocks to handle more transaction information. This feature allows for faster and cheaper transactions compared to BTC. Like bitcoin, Bitcoin Cash uses proof-of-work mining to verify and add transactions to the blockchain, rewarding miners with newly minted coins.
Where Did Bitcoin Cash Come From?
Bitcoin Cash originated from a disagreement within the bitcoin community on addressing scalability and transaction fee issues. Some community members believed that Bitcoin’s block size limit, set at 1MB, was too small to meet the growing transaction demand. However, others believed that increasing the block size limit would make the Bitcoin network too centralized, making it harder for miners to validate transactions.
In 2017, developers who sought to improve bitcoin as a medium of exchange rather than just an investment medium proposed a solution. However, the lack of consensus on this solution led to a split in the blockchain, resulting in the creation of Bitcoin Cash. This split, called a hard fork, occurred on August 1, 2017, at 18:24:41 UTC. Following the hard fork, anyone who owned bitcoin before the split had an equal amount of Bitcoin Cash.
How Does Bitcoin Cash Work?
Bitcoin Cash works by increasing the block size, allowing for more transactions to be stored on each block. This increases the speed of transactions and reduces the fees associated with them. It also makes it easier for users to access their funds without waiting an extended period for their transaction to be confirmed.
Where to Store Bitcoin and Bitcoin Cash Coins Securely?
Investors can use various wallets to store BTC or BCH; one is Guarda Wallet. Just like their names, you can access them on those devices or platforms. Guarda Wallet is one of the most popular hot wallets out there. Guarda is a multi-platform wallet that supports over 400k assets and 60 major blockchains, including BTC and BCH. Guarda also allows users to buy, exchange, receive, and send BTC and BCH. Its main feature is its non-custodial nature.
You can use Guarda Wallet to exchange your BTC and BSV for other assets directly within the app without transferring your funds to an external exchange. The wallet prioritizes security by offering multi-signature, backup, and biometric login (for mobile). Furthermore, Guarda Wallet offers a prepaid card that you can top up using BTC and other assets, which you can use to make purchases anywhere that accepts VISA.
Differences Between Bitcoin and Bitcoin Cash
| Features | Bitcoin | Bitcoin Cash |
|---|---|---|
| Block size limit | 1 MB | 32 MB |
| Transaction fees | Can be expensive during periods of high network congestion | Generally lower than Bitcoin fees |
| Scalability | Limited | Higher |
| Security | More secure | Less secure |
| Purpose | Investment/Store value | Peer-to-peer transactions |
Block Size Limit
The block size limit is the upper limit on the size of the block in the blockchain network. BTC has a block size limit of 1 MB, while BCH has a block size limit of 32 MB. BCH can process more transactions per second faster than bitcoin, which benefits users who need to make transactions quickly.
Transaction Fees
BTC and BCH have different transaction fee structures. BTC has higher transaction fees because of its block size limit, which causes a backlog of transactions waiting to be processed, leading to higher transaction fees. BCH, on the other hand, has a lower transaction fee because of its bigger block size limit.
Scalability
Bitcoin has limited scalability due to its small block size, which leads to slow transaction processing times and high fees. With its larger block size, Bitcoin Cash can handle more transactions per second, making it more scalable. Bitcoin handles 5-7 TPS, while Bitcoin Cash handles up to 100 TPS.
Security
BTC and BCH use the same consensus algorithms—PoW—and the same underlying code. However, Bitcoin Cash has undergone some changes in the code to scale and provide users with faster transactions, thereby reducing security. BTC also has more miners and a higher hash rate, which makes it more secure. On the other hand, BCH is adopted by fewer users, but its lower hash rate makes it more vulnerable to attack.
Purpose
As the first cryptocurrency, bitcoin was designed primarily as a store of value and investment. Bitcoin Cash, however, was created to serve as a peer-to-peer digital cash system, with faster transaction times and lower fees allowing for everyday transactions.
How to Buy, Sell, or Exchange BTC and BCH Coins?
Since Guarda Wallet allows users to not only store crypto assets but send, receive, and exchange multiple cryptocurrencies, It is the perfect place to acquire both coins. Below is the step-by-step process of buying, selling, or exchanging BTC and BCH tokens on Guarda Wallet.
Download the wallet on a desktop or mobile or access it through your browser. Then create an account on Guarda Wallet and set a strong password (write it down).
Once your account is created, Guarda Wallet automatically creates a watchlist of various assets you might be interested in. If the asset you want is not on the list, search for it and add it.
Buy either or both coins using the ‘Buy’ button. Guarda supports multiple payment methods, including Visa/Mastercard and SEPA transfer. Choose the payment partner and go through the verification process to get the confirmation.
Once the coins are in your wallet, you can exchange them and perform other transactions. To exchange BTC for BCH or BTC and BCH for other assets, go to the ‘Exchange’ tab and select the currencies you want to receive. Enter the number of coins you wish to exchange, and Guarda will calculate the exchange rate and display the fees. If you’re satisfied with the fees and exchange rate, click the ‘Exchange’ button to complete the transaction.
Create BTC and BCH Wallets on Guarda
Conclusion
The debate between Bitcoin and Bitcoin Cash has been ongoing since the fork in 2017. Both cryptocurrencies have unique features, making it difficult to determine which is better. Bitcoin offers a more established and secure network with a higher market capitalization and wider acceptance. Bitcoin Cash provides faster transaction times, lower fees, and a scalable blockchain.
The choice depends on individual preferences and needs. Bitcoin may be a better option for long-term investment and a reliable store of value. At the same time, Bitcoin Cash may be preferable for those prioritizing fast and cheap transactions.
FAQ
1. Is Bitcoin Cash better than Bitcoin?
Whether Bitcoin Cash is better depends on your priorities. Bitcoin Cash focuses on larger block sizes for faster transactions, while Bitcoin remains a popular store of value and investment option.
2. Is Bitcoin Cash more secure than Bitcoin?
Bitcoin and Bitcoin Cash both prioritize security, but their different approaches to scaling may result in varying levels of security over time; it’s crucial to keep an eye on developments in both networks.
3. Does Bitcoin Cash have a future?
There are fewer wait times and reduced transaction processing costs due to Bitcoin Cash’s ability to execute transactions faster than the Bitcoin network. However, it is also less secure because of the larger block size. The block size and the number of transactions that may be processed at once on the Bitcoin network are making it more secure.
