Bitcoin, the “people’s currency”, has faced a lot of backlash from the crypto community in recent times, especially during the hard fork in August 2017, when its “offspring” was born – Bitcoin Cash. People often confuse the two and here, we will look at the major differences between BTC and BCH.
Bitcoin is the very first cryptocurrency to be created. It also introduced blockchain to the world. Since 2009, when the whitepaper was first released, it has gone through massive rises and falls in price. The cryptocurrency market is well-known for its volatility and this has led to many people making and losing fortunes over the years with Bitcoin.
The aim of Bitcoin is to be the best medium of exchange for the average person, replacing traditional online payment systems which are slow and costly. There are significant costs associated with sending money across borders with banks and the likes due to currency exchange rates and fees associated with them. This is not the case with Bitcoin as they aim to become a global digital currency.
While there have been periods where the Bitcoin network has struggled with scalability issues, as a whole, they have decent fees and processing times for transactions. The network is also completely decentralized which means that no central authority has control over the supply of Bitcoin or changes in the network itself which may not be to the benefit of the majority of token holders. Bitcoin brought blockchain technology to the fore, which is something that is taking over the way the world works. Most industries are now looking at implementing blockchain technology into the way they do things in order to make their processes more efficient and secure. Bitcoin can be sent anonymously which ensures that your privacy can be maintained.
The following are some of the cons of Bitcoin that an investor can consider:
While Bitcoin was the original cryptocurrency and set out the guiding principles for many future tokens, Bitcoin Cash is an offshoot of this network. It was in August of 2017 that there was a hard fork in the Bitcoin Network that led to the creation of Bitcoin Cash. This came at a time when the transaction costs and processing times on the Bitcoin network were getting out of hand due to network congestion. There was a split in the community, with many believing that Bitcoin was straying away from its original driving principles. The consensus among Bitcoin miners who wanted to improve the fluidity and speed of the Bitcoin network were also skeptical about the adoption of the so called SegWit2x.
When the issues were not looking like being solved, the hard fork took place. After its creation, Bitcoin Cash managed to bring back the low costs and increase processing times. Many even believed that this was the true Bitcoin and the market position should be flipped with Bitcoin in order to showcase this.
The major difference between Bitcoin Cash and Bitcoin was the block size. Bitcoin’s block size is 1MB, while Bitcoin Cash’ – 8MB. This meant that a lot more transactions could be processed per second and there would be little to no network congestion. Scalability has always been the core issue with Bitcoin, but a simple change in the size of the block could have reaped a lot of relief for this congestion, but this was something which ultimately was not approved.
Bitcoin and Bitcoin Cash have many similarities, since Bitcoin Cash originated from Bitcoin. They both are great mediums of exchange for cross border payments as they take currency risks out of the equation. They are both secure and transparent platforms which keep party’s data safe when making transactions. They are both decentralized meaning that no central authority is able to control the respective tokens.
The main differing factor between the two currencies is the scalability issues Bitcoin struggles with. This is desirously detrimental and Bitcoin Cash probably wouldn’t exist today if it wasn’t for this issue. It seems that a simple change in the max size of Bitcoin network blocks would solve a lot of issues, but this is something that doesn’t look like happening. This allows Bitcoin Cash to continue undercutting Bitcoin in the form of lower transaction fees and quicker processing times. For now, however, Bitcoin still dominates the crypto “food” chain and this is not likely to change any time soon.
Both Bitcoin and Bitcoin Cash are very useful mediums of exchange for the average person. As Bitcoin Cash originated from Bitcoin, they are both extremely similar. If you are looking for fast and cheap payments, Bitcoin Cash in its current form is probably the best option for you. If you don’t mind sacrificing some time and speed for better liquidity, then you might be better served with using Bitcoin.
It is certainly going to be exciting to see how both of these digital currencies evolve and perform over time into the future. If you are looking to use either of these cryptocurrencies or make an investment, make sure that you are using the best crypto brokers and crypto trading strategies as outlined in the crypto broker comparison guide. Therefore, you are giving yourself the best chance as possible to benefit from your investment.
The other factor that needs to be considered is the regulatory aspect, especially when it comes to Bitcoin. Governments around the world are struggling to come up with a uniform regulatory framework that establishes the ground rules for regulating Bitcoin. Should it become regulated, there can be a massive change in its market cap as well as the perception it receives from investors.