Bitcoin has received several questions around scalability from its skeptics. Transactions involving the digital currency bitcoin are processed, verified, and stored within a digital ledger known as the blockchain. Unfortunately, the network is slow when compared to credit card transactions. Financial institutions can verify thousands of credit card transactions per second. But, miners can only verify seven bitcoin transactions in the same time period. To tackle these concerns, developers created Bitcoin Cash. Here are the differences between bitcoin and bitcoin cash explained.
The rise of a new currency
Bitcoin was created with the intention that any computer would have the technical capabilities to approve transactions on the bitcoin blockchain. To leverage this strategy, the bitcoin creators limited the block size to 1MB. Each 1MB block was approved every 10 minutes by this mining community. The network continued to expand, forcing more data to be squeezed into each block and more congestion to occur in the network. Determining a solution was met with many opposing viewpoints in the blockchain community.
Bitcoin Cash was created in August 2017, after community members argued that changes needed to be made to the core protocol of the coin to fulfill Satoshi Nakamoto’s vision, including members like Roger Ver. The argument was met by some who argued that the bitcoin protocol should remain as Satoshi Nakamoto founded it. Instead, these developers believed that leveraging the Lightning Network and other technologies such as SegWit could help alleviate the congestion in the network without leading to endless block size upgrades. The continued debate led to a hard fork, creating the currency Bitcoin Cash (BCH).
Sadly, the fork did not end the outstanding bitcoin vs. Bitcoin Cash debate. Bitcoin core members continued to point fingers at the Bitcoin Cash team for confusing Bitcoin users by making a coin so similar to bitcoin users couldn’t tell the difference.
A brief overview of Bitcoin Cash
Developers created BCH with a block size of 8 MB compared to a bitcoin block of 1 MB. A block size of 1 MB suggests that the network could only process a small number of transitions at a time before becoming congested and expensive to run. Therefore, the Bitcoin coders that created BCH worked with the concept that by increasing the block size eight times, they could theoretically make bitcoin eight times more capable of processing transactions. The appeal? People can use Bitcoin Cash like everyday cash, which doesn’t come with a fee to use. In September 2018, developers tested the network and revealed the network’s capabilities of handling 25,000 transactions per block.
The change in block size accelerates the verification process. It is complete with an adjustable difficulty level to ensure the blockchain can survive regardless of the number of miners supporting it. Although transaction times are faster, another potential issue does arise. That is the security of the blockchain. Furthermore, bitcoin is still regarded as the largest cryptocurrency in the world with the most liquidity. Bitcoin Cash cannot yet compete on these fronts.
Other debates also followed, this time over scalability. Shortly later, Bitcoin Cash enthusiasts suggested another increase of block size to 128 MB. The blockchain network did not meet this increased block size with complete agreement. Therefore, in November 2018, the Bitcoin Cash network experienced another hard fork with Bitcoin Cash SV’s creation (Satoshi’s Vision) to meet these size increases.
The future of Bitcoin Cash
Bitcoin Cash and bitcoin will continue to share the name and history, which is where the similarities might end. Bitcoin cash continues to follow a development path favoring adjustable block sizes compared to bitcoin, which is promoting growth through the use of the second layer payment protocol, the Lighting Network. Bitcoin Cash’s market capitalization is only $9.B billion, making it the 13th largest currency in market cap. The platform does offer lower transaction fees and greater scalability, but this comes at the expense of lower adoption and a lower price.
Many believe that Bitcoin Cash still has a promising future ahead of it. The platform has multiple independent teams of developers continuing to upgrade the platform to make it the “best money in the world.” Since the fork in 2017, Bitcoin Cash developers have upgraded the block size again to 32 MB and initiated many new projects in the Bitcoin Cash network. Cryptocurrency enthusiasts are encouraged to continue researching and learning more about the network and how it can push society towards economic freedom.
