Bitcoin vs Bitcoin Cash – what is this? If you’re just entering the cryptocurrency sphere in 2018, you’re in for a treat. The past year has been one of the most exciting years in the crypto-scene, full of drama, scams, forks, and new and often confusing regulations. If you’re just starting to read up on things, the chances are, you’ll encounter chaos as you’ve never faced before, and the difference between BTC vs BCH is one of the things you should learn first.
Booming and crashing markets, thousands of different tokens and coins, different block chains, scaling technologies, fake news, millions of new blogs popping up everywhere — all in all, it’s just one big mess. On top of that, after getting spammed about Bitcoin over and over again, you finally decide to see what’s all this fuss about, and you come to learn that there’s more than one Bitcoin?
What kind of sorcery is this? Here you go – a comparative study of Bitcoin vs Bitcoin cash!!
Bitcoin (BTC) and Bitcoin Cash (BCH) are two separate cryptocurrencies, and for the newbies on the scene, the reasoning for the existence of these two is likely confusing and to be honest, you’re not to be blamed for this. There’s an all-out war going on between the two, followed by ganged up communities with different philosophies and interests spreading lies and censoring truths about each other.
“Sorry to be a wet blanket. Writing a description for (bitcoin) for general audiences is bloody hard. There’s nothing to relate it to.”- Satoshi Nakamoto
For the casual and incurious front-end users everything seems “normal,” at least to the extent this word can be interpreted in the crypto world, but as soon as you dwell deeper, things get real messy real fast. So, how did this all came about and what is Bitcoin Cash?
To fully understand the Bitcoin vs Bitcoin Cash debate we need to start with a short history lesson:
Where did Bitcoin come from? When Bitcoin came out in 2009, there was nothing like it. The idea of a decentralized and deflationary digital currency mimicking the economics of precious metals was so preposterous that not even the very people involved in its creation believed in it. Needless to say, the word got out, and Bitcoin started growing really fast.
As the network grew, so did the price, and vice versa, creating a spiral that began at less than $0.005 per bitcoin in 2009, and ended up reaching stupendous $20.000 in December 2017.
However, nothing good comes without a price, and Bitcoin’s not an exemption. Because it takes approximately 10 minutes for one block to get minted, and because block size is capped at 1mb, the Bitcoin network can process around 7-10 transactions per second. To put that into perspective, VISA has a capacity of 50.000 transactions per second.
After reading this it becomes clear that Bitcoin, as the superstar of all cryptocurrencies and the first of its kind, is facing severe scalability issues, particularly in the past two years.
Just to get this straight, there’s a widely held belief within the cryptocurrency community that only Bitcoin and Ethereum are terrible at scaling. That’s just plain wrong. Scalability is a blockchain problem, not a Bitcoin problem. As it happens, Bitcoin was the first cryptocurrency to reach this level of adoption.
If any of the other alt-coins reach the same level of adoption, they’re going to have to deal with the same problems.
Bitcoin vs Bitcoin Cash: The Block size debate
The critical issue.
One can only imagine how ridiculous this block size debate must look to an outsider, but to the Bitcoin community, this issue is of vital importance. Although there are two complementary technologies, known as SegWit and The Lightning Network already implemented on the main net as viable solutions to the scaling problem, as it stands, the adoption of these technologies is still too small to have any real effect.
This leaves the age-old question of the block size limit up for debate.
There are two opposing sides waging war over the block size, the big blockers, and the small blockers. The big blockers are supporting the increase in block size affirming that it will immediately improve the transactional capacity of the network and will make Bitcoin more useful as means of exchange, all the while attracting more and more parties to join the network and make it a genuinely mainstream phenomenon.
The small blockers are in favor of the status quo and prefer dealing with the problem with solutions like off-chain transactions and SegWit.
They believe that increasing the capacity size of the blocks is just a temporary relief that creates a dangerous precedent. They hold that Bitcoin’s core value lies in its decentralization which provides it with its censorship-resistance properties, and furthermore argue that an increase in block size will raise the barriers to entry and aid to the centralization of the network.
So what does this have to do with Bitcoin vs Bitcoin cash? Well, this debate is the rightful birthplace of Bitcoin cash. On August 1st, 2017, after the differences in perceptions, priorities, and interests of the two opposing sides got unbearable, a minority contingent of exchanges, miners and users forked the Bitcoin blockchain and created Bitcoin Cash.
Bitcoin vs Bitcoin Cash
“Anyone who held Bitcoin at the time Bitcoin Cash was created became owners of Bitcoin Cash. This means that Bitcoin holders as of block 478558 (August 1st, 2017 about 13:16 UTC) have the same amount of Bitcoin Cash as they had Bitcoin at that time.”- bitcoincash.org
Bitcoin Cash was forked from the original Bitcoin blockchain on August 1st, 2017 by miners, developers, and individuals that had their doubts about Bitcoin’s adoption of SegWit, maintaining that the technology is not going to solve the fundamental problem of scalability. The big blockers, disappointed by the lack of consensus in the community that’s necessary to update the protocol and create bigger blocks, took the matter into their own hands.
The creation of the “new version of Bitcoin” was pushed by three key players that dispatched from the Bitcoin community: Roger Ver, a very famous early investor in various Bitcoin projects like Bitinstant, Ripple, Blockchain.info, Bitpay, and Kraken, also owner of the Bitcoin.com domain; Jihan Wu, co-founder of Bitmain, the biggest company manufacturing ASIC miners and maintaining the AntPool, one of the largest mining pools currently mining 16.5% of all blocks; and Deadal Nix (real name Amaury Séchet), lead developer of Bitcoin ABC and Bitcoin Cash.
Bitcoin Cash vs Bitcoin: What are the key differences?
As stated on the official website, Bitcoin Cash claims to be “a peer-to-peer electronic cash for the Internet” and the authentic continuation of Satoshi Nakamoto’s original vision. Although there is very little noticeable difference on the front end as far as the casual users of Bitcoin/Bitcoin Cash are concerned, there are two key technical differences that the newbies need to be aware of:
Block size
How big is the Bitcoin blockchain? Obviously, the key difference between BTC and BCH is the block size. Bitcoin has 1MB block size cap while BCH has an adjustable block size starting at 8MB. A larger block size means more transactions processed per second, but it also means that they take a lot more storage space which in turn creates a barrier to entry problem for potential miners.
Running a full node is prerequisite for mining cryptocurrency on the blockchain, which means that the miner has to download the entire history of transactions ever occurred on the blockchain. This essentially means that mining BCH comes with more expensive hardware and data storage costs, which may act as a potential deterrent for people wanting to start mining the currency.
Mining algorithm
The other significant technical difference between the two is the mining algorithm. They’re both running a PoW mining algorithm, but at the inception, BCH was running a less difficult mining algorithm as a way to attract miners and compete with BTC. However, this approach backfired as miners were getting in and out solely based on the profitability of mining BCH at the moment which resulted in unpredictable block times.
To solve this, BCH introduced the Difficulty Adjustment Algorithm (DAA) which is a dynamic mining algorithm. This means that the mining difficulty is flexible and adjustable in efforts to create a more constant and predictable block time and protect miners migrating from BTC from hash rate fluctuations.
If you’re interested in learning how to start Bitcoin mining just follow the link.
Bitcoin and Bitcoin Cash: The pros and the cons
“Bitcoin and Bitcoin Cash will coexist and serve different use cases, just like Bitcoin and Ethereum. It’s not a zero-sum game. Work on building your project, not on destroying the other”- Andreas Antonopoulos
By now you’re probably wondering which one is better, Bitcoin or Bitcoin Cash? Well, to be frank, it depends on your priorities and values.
As it stands, the original Bitcoin’s focus is on maintaining its decentralized nature and keeping it as public, censor-resistant and permissionless as possible. The fast and cheap payments are of secondary priority, and if Bitcoin’s community has to choose between the two, they’d much rather have a truly decentralized and robust network, even at the cost of high transaction fees.
As far as the average user is concerned, the cons of Bitcoin are pretty much clear at the moment: it’s slow and expensive so in the Bitcoin vs Bitcoin Cash battle the second has an advantage at the moment.
The pros? It’s has truly decentralized hashing power widely distributed across the world, and it’s robust enough that it’s almost impossible to orchestrate a 51% attack against it.
It’s more or less democratic, and upgrades are introduced after the community had a chance to express their opinions in polls and BIP proposals. Also, Bitcoin is neither a company, nor it is run like one. It has no ties to any person in particular.
After Satoshi Nakamoto disappeared without disclosing his true identity, Bitcoin was left without a leader, a ruler or an idol figure.
Yes, there’s a dash of criticism in the community that Bitcoin’s Core development team is very influential and their opinions can sway Bitcoin’s development one way or the other, but this sort of “centralization” is laughable when compared with what’s going on with Bitcoin Cash.
Bitcoin Cash has set their priorities in reverse order. They are focused on solving the scaling issue as fast as possible and claim that fast and cheap transactions will bring more people on board which will in turn foster decentralization. But to be frank, uttering the words “decentralization” and “Bitcoin Cash” in the same sentence is heresy.
Only three mining pools, namely Antpool, ViaBTC, and BTC.com combined already have more than 50% of the hashing power. If these three mining parties decided to join their forces, they could orchestrate a 51% attack easy.
Besides, the bulk of the coins issued and most of the mining power is in the hands of Jihan Wu and Roger Ver, two of the most influential people in the community. To make things even more comical, three months ago, in November 2017, Rick Falkvinge released an official communique in which he’s referring to himself as a Chief Executive Officer of Bitcoin Cash.
A decentralized cryptocurrency with a CEO? Yeah. Sure.
So, regarding Bitcoin vs Bitcoin Cash, which one is better? It’s really not that one-dimensional. Bitcoin Core has 9187 full nodes while Bitcoin Cash has 1013 at the moment. Bitcoin is still vastly bigger, with more hash power, more users, wallets, transactions on the network.
However, being practically dysfunctional as it is, a growth in BCH’s user base can be expected at least in the short term.
What can we expect in the future in the Bitcoin vs Bitcoin Cash battle?
Since Bitcoin Cash forked out of Bitcoin, there’s a guns blazing propaganda war going on in the media, blog posts, and forums. Both sides are spreading nasty lies about each other and attacking each other in various ways.
Roger Ver, the owner of one of the biggest cryptocurrency domains Bitcoin.com and one of the lead faces of Bitcoin Cash, started referring to Bitcoin Cash as the Real Bitcoin on his site, creating massive confusion in the community, especially for the people that recently got into crypto.
In fact, the propaganda got so serious that even the National Institute of Standards and Technology under the US Department of Commerce published a research paper titled “Blockchain Technology Overview” in which it referred to Bitcoin cash (BCH) as the original Bitcoin while referring to Bitcoin (BTC) as a “fork.”
Luckily, the paper NIST published is just a draft and it’s open for comments and corrections by the public until February 23. Naturally, the Bitcoin community was outraged by this mistake and contacted NIST.
To their satisfaction, according to one Redditor, NIST replied with the following email:
“Thank you for your comments. You, along with many others, expressed concern on section 8.1.2. To help foster a full transparency approach on the editing of this section, I am sending the revised section to you for further comment.
8.1.2 Bitcoin Cash (BCH or BCC1) In 2017, Bitcoin users adopted an improvement proposal for Segregated Witness (known as SegWit, where transactions are split into two segments: transactional data, and signature data) through a soft fork. SegWit made it possible to store transactional data in a more efficient form.
However, a group of users had different opinions on how Bitcoin should evolve – and developed a hard fork of the Bitcoin blockchain titled Bitcoin Cash. Rather than implementing the SegWit changes, the developers of Bitcoin Cash decided to increase the maximum block size (additionally the developers made changes to other aspects of the system, such as the difficulty adjustment algorithm).
When the hard fork occurred, people had access to the same amount of coins on Bitcoin and Bitcoin Cash.”
Although they got it right this time, the very fact that even the government got affected by this propaganda war speaks for itself. The effects of the “civil war” have been negative for both coins, and more experienced people on the scene started investing into Ethereum and other alt-coins as the only way to distance themselves from all of the toxicity and drama.
If you want to get just a taste of this toxicity, this Pastebin blog post perfectly demonstrates how messed up everything gets when there’s real money on the table.
So what can we expect from all of this in the future? As with almost anything in the cryptocurrency sphere, it’s impossible to know what can happen in the Bitcoin vs Bitcoin cash debate. In fact, when you read someone that’s making predictions of the future with great confidence, you can be certain that he’s wrong. Did Bitcoin Cash really solve the scalability problems?
Yes, the fees are low, and transactions are fast but, to put it into perspective, Bitcoin cash processes less than 1/10th the number of transactions that Bitcoin does at the moment.
When Bitcoin was at the scale Bitcoin Cash is today, the fees were less than a cent.
Bitcoin vs Bitcoin Cash: will both of them survive or will there be only one winner on the long run? All of these questions (and others) remain unanswered.
Is Bitcoin a good investment in 2018? Will the price of Bitcoin cash ever surpass the price of Bitcoin? Will the Bitcoin vs Bitcoin cash battle ever end?
Bitcoin cash or Bitcoin: what will be the Bitcoin worth in 5 years and will the price of Bitcoin cash be close behind? Bitcoin cash vs Bitcoin price will probably stay the same ratio wise but who knows?
Should I buy Bitcoin or Bitcoin cash. Buy Bitcoin and Bitcoin cash. Bitcoin Cash is among the best crypto coins for 2018 so the question should be how to buy Bitcoin cash?
The Bitcoin cash vs Bitcoin debate is underway and there’s a lot to be said about it. The battle has just begun – bitcoin vs bitcoin cash, and besides, cryptocurrencies, in general, are just starting to get all of the attention in the world, so nobody really knows what the scene will look like in two or three years from now.
Feature image: Mike Piechota, Other images:[1],[2],[3]