Bitcoin (BTC) and Bitcoin Cash (BCH)
In August 2017, the Bitcoin blockchain split into two separate blockchains, resulting in a new digital currency called Bitcoin Cash. This was preceded by a fierce discussion about how to solve the scalability problem of bitcoin.
In this article, you will learn how Bitcoin (BTC) differs from Bitcoin Cash (BCH).
In 2009, after the release of its white paper describing the creation of a decentralized digital p2p system, Bitcoin became the first cryptocurrency in the world. Today, Bitcoin is a universally recognized alternative currency with a market capitalization of over $ 50 billion and the price of one coin that has long surpassed the cost of an ounce of gold. Now Bitcoin is used as a currency for online settlements, a depository of funds or a new alternative investment.
However, with the growth of interest in Bitcoin, the load on its network has increased tremendously, which led to a slowdown in transactions and an increase in user fees. It became obvious that bitcoin would need modernization for further development.
SegWit Update (Segregated Witness)
Several solutions to the scalability problem have been proposed, but Segregated Witness technology, or, in short, SegWit, stands out against their background. This is a blockchain upgrade that removes some data to free up space in blocks, which allows for more transactions in the same period of time. Opponents of SegWit, in turn, suggested increasing the size of the block.
As a result, it was decided to implement SegWit and subsequently increase the size of the blocks, but this was not enough for the opponents of SegWit.
On August 2, 2017, SegWit was introduced, and at the same time with this modernization, the blockchain split up to create the Bitcoin Cash altcoin, which allowed generating larger blocks. The original bitcoin due to SegWit was able to conduct more transactions than before.
The difference between Bitcoin and Bitcoin Cash
The key difference between BTC and BCH is the block size. Bitcoin block size is limited to 1 MB, while Bitcoin Cash offers a block size of 8 MB. If the block of bitcoin holds about 2500 transactions, then for the first BCH blocks this figure reached 7000. Thus, the prospects for Bitcoin Cash in terms of scalability at first glance look much better.
However, most Bitcoin infrastructures (wallets, payment services, etc.) do not support Bitcoin Cash and consider it to be just another altcoin, and not a “new bitcoin”. This means that its use is so far limited by speculation on exchanges.
All this raises us to the question of the real value of BCH. If buyers and sellers are not ready to use and accept it, why should its value grow? At the moment, Bitcoin Cash only supports a small part of the community, which likes the idea of increasing the block size. The remaining participants remained on the side of Bitcoin and SegWit.
If you choose where to invest, then Bitcoin still looks like the best option. Bitcoin Cash can collapse at any time and appear at the bottom of the cryptocurrency table, becoming the next altcoin with low real value.