This tutorial explains the differences between Bitcoin vs Bitcoin Cash. Understand the differences along with advantages, disadvantages, similarities, etc:
Bitcoin Cash is a fork of Bitcoin, which means they share similarities. Both are a form of digital cash that can be minted using computer processing power on a distributed network of miners. To the public, the major difference between the two may appear as price and publicity where Bitcoin reigns.
However, for those considering Bitcoin vs Bitcoin Cash in terms of technical protocols, Bitcoin Cash seems to be far much better than Bitcoin. It has faster confirmation times, is scalable with support for smart contracts, is cheaper to mint and transact, and is way more energy efficient.
This tutorial dwells on the differences between Bitcoin and Bitcoin Cash.
What You Will Learn:
Comparison Table: Bitcoin Vs Bitcoin Cash
| Bitcoin | Bitcoin Cash | |
|---|---|---|
| Market capitalization | $953,286,888,318 | $10,675,799,576 |
| Global rank per market cap | 1 | 18 |
| 24 hour volume | $38,068,183,366 | $1,259,208,242 |
| Circulating supply | $951,252,253,894 | $10,619,489,318 |
| Price | $50,488.19 | $564.20 |
| Mining rewards | 6.25 bitcoins | 6.25 BCH |
| Mining algorithm | SHA-256 proof of work | SHA-256 proof of work |
Frequently Asked Questions
Q #1) Is it better to invest in Bitcoin or Bitcoin Cash?
Answer: Bitcoin Cash costs less than Bitcoin, although Bitcoin has more value given its wider adoption. In both cases, you can buy a fraction of the coins. In judging the returns between Bitcoin Cash vs Bitcoin, you need to check on the return on investment per cryptocurrency, which varies from time to time. Currently, it appears better to invest in Bitcoin.
Q #2) Is Bitcoin Cash the same as Bitcoin?
Answer: Both are not the same, although they both use SHA-256 proof of work mining algorithm and consensus mechanism. In both cases, it takes 10 minutes to confirm a transaction. To explain differences, Bitcoin block size is 1 MB, but Bitcoin Cash has 8 MB (which has gone up to 32 MB).
Bitcoin Cash has a larger transaction throughput of 200 transactions per second, while Bitcoin without Lightning Network is just 7. With Lightning Network, Bitcoin can facilitate over a million transactions per second.
Q #3) Is Bitcoin Cash faster than Bitcoin?
Answer: Yes, it has a transactional throughput of 200 transactions per second while Bitcoin without Lightning Network nodes has 7. With Lightning Network technology – which has reported poor adoption – Bitcoin is faster at over 1 million transactions per second. Bitcoin Cash is structurally better at handling faster transactions because of a higher block size of 32 MB.
Q #4) Does Bitcoin Cash have a limit?
Answer: Yes, Like Bitcoin, Bitcoin Cash is capped at 21 million. After this amount of coins is mined, mining will cease and prices will be supported by only circulating supply.
Q #5) Does Bitcoin Cash has a future?
Answer: Since forking from Bitcoin in 2017, the cryptocurrency has performed fairly well, now at $500. Given the stable structure, features, usability, adoption, and community behind the project, the cryptocurrency appears to have a good future. Projections from experts show it could reach $7,000 per coin this year and up to $12,000 in 2025.
Q #6) How do I cash out my Bitcoins?
Answer: In most cases, that involves selling it on an exchange that allows trading it for fiat, then withdrawing to a bank account, local payment methods, or online electronic payment methods. You can check apps like Nuri, CashApp, Coinbase, PayPal, Bitstamp, and LocalBitcoins.
Bitcoin vs Bitcoin Cash: Understanding The Two
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Emergence
Bitcoin was formulated in 2008 by Satoshi Nakamoto. It is based on blockchain, a digital ledger technology that enables a distributed network of nodes to cryptographically share the same copy of data, information, and value on a peer-to-peer basis without a middleman.
Bitcoin Cash emerged in 2017 on the verge of a disagreement involving SegWit2x or Segregated Witness upgrade. The upgrade segregates some data from the limited block space to ensure the block space is kept at 2 MB. Although 85% of Bitcoin computing power was represented, the main codebase wasn’t represented, hence a disagreement.
Those in support of block size increase thought claimed it would make transactions faster and lessen fees. Those supporting smaller block sizes said it would help decentralize Bitcoin and make it easier to host a full node. Hence the hard fork to create Bitcoin Cash.
How The Two Work
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Blockchain is a public distributed digital ledger, records, and shares all the Bitcoin and Bitcoin Cash across the ledger for all participants running the node. The Bitcoin and Bitcoin Cash blockchains are each programmed to run with different features and that’s how they differ from each other, even though they run on the SHA-256 algorithm of encrypting information.
You can participate by either using a wallet to send or receive BTC or BCH or running a node for each or any of the blockchains to earn more crypto in mining rewards. Many other people and organizations run DeFi or applications on top of these blockchains for one reason or the other.
When you send BTC or BCH from your wallet to another or receive them, they are recorded and can be viewed with blockchain explorers. By inputting an address into an explorer, you can track all the received amounts, time, and other details, such as transaction fees.
Since wallet addresses appear as strings of numbers with no user names attached to them, the blockchains allow for pseudo-anonymity. Therefore, unless someone is looking around to see which online names and accounts have been used to register the address, it should remain private.
You still can get wallet addresses without a name attached to them in decentralized systems. The transactions are secure because the data is secured via cryptography.
Similarities
#1) Distributed network of nodes: The two cryptocurrencies use a distributed network of nodes. The networked blockchain supporters install a copy of blockchain each on their machines to verify transactions, secure networks, and get rewarded through the mining process.
#2) Use of cryptography: Being based on the blockchain means it is secured with cryptography, a method of the highest level of securing information through encryption that would take modern computers years to break. Then it is processed or mined in blocks by miners who run nodes — using computational power, miners try to maintain the network in a distributed form.
#3) Secure chain of blocks: Miners also ensure that the incoming data – for instance, transactions being processed on the network, are confirmed as secure and legit. Transactions are continually cryptographically encrypted and arranged or into blocks in the chain as the users broadcast them. Both Bitcoin Cash (which was created in 2017) and Bitcoin work this way.
#4) Block time: In a given blockchain, miners can process a transaction and confirm it – put into a block alongside multiple other transactions—within a given duration known as block time. Most cryptos try to curb inflation using the idea of capping supply and this applies to both Bitcoin and Bitcoin Cash.
As mining continues, more is put into circulation but because not everyone can own it, and as adoption continues, it will have demand.
#5) Convertibility: Both cryptocurrencies can be converted from and back to each other. They both have a dollar value attached per coin every time.
#6) Transactions and their access: Both use wallets to or from which you can send or receive crypto. They both allow you to run a mining node to confirm transactions, secure, and support the network.
| Bitcoin | Bitcoin Cash | |
|---|---|---|
| Block time | 10 minutes | 10 minutes |
| Mining algorithm | Proof of work | Proof of work |
| Technology | Blockchain | Blockchain |
| Security | Distributed network of users, cryptography | Distributed network of users, cryptography |
| Method of creating new- coins | Mining – use of computer processing power – Chances of creating a block increase with increasing processing power | Mining – use of computer processing power -- Chances of creating a block increase with increasing processing power |
| Usability | Digital asset – trading, payment, speculation | Digital asset – trading, payment, speculation |
| Supply | 21 million coins | 21 million coins |
| Purpose | Created to solve inflation, monetary fraud, and monetary control problems | Created to solve inflation, monetary fraud, and monetary control problems |
| Form of money | Peer-to-peer privately issued digital currency | Peer-to-peer privately issued digital currency |
| Charge-back resistant | Transactions irreversible | Transactions irreversible |
| Censorship resistant | Yes | Yes |
#7) Mining difficulty: To ensure timely production of blocks and confirmation of transactions, each block has a specific mining difficulty. This difficulty adjusts based on the number of people mining or the total hash rate in the network.
Difficulty adjustment means the crypto is more difficult or easier to mine to make it easier or harder to create a block. Each miner guesses multiple times a value called nonce when trying to solve a block. It is this finding that is made easier or harder.
It means more or lesser hash rates would need to be used in mining the block. The effect is stabilizing a block production time of 10 minutes for both Bitcoin Cash and Bitcoin, regardless of the amount of hash rate that comes online.
Mining equipment for Bitcoin Cash include Antminer S9, Antminer T9, or S7 ASICs and several GPUs available in the market like the AMD RX 480 and the Nvidia GTX 1070. It is recommended to connect to btc.com, antpool, f2pool, viabtc, and bitcoin.com mining pools. Bitcoin mining follows the same path.
Suggested Reading =>> Top cryptocurrencies to mine
#8) Scalability issues: Bitcoin Cash was forked out of Bitcoin in 2017. The argument was that Bitcoin could not be scalable to handle thousands of transactions per second. It is also slow, taking up to 10 minutes to confirm a transaction. While Visa can transact up to 24,000 transactions per second, BTC would be around just 7, which is terrible if adopted widely globally. That makes it awful for adoption in faster payment channels.
For this reason, Bitcoin Cash was designed to have a higher block size, such that it handles more transactions per block per second. That also makes it less costly than Bitcoin.
#9) Transaction delays, high fees: Each Bitcoin block consists of 1 MB. As the network grows, the chain becomes bulky. Due to slowness in confirmation and outages due to low processing times, the network at one time had a 100,000 transactions backlog. This would force high fees.
Differences
#1) Slight divergence in their missions and visions: While Bitcoin does not encourage hard forks or pushing upgrades, Bitcoin Cash is more open to hard forks and innovation. Bitcoin’s recent attempt at scaling is the lightning network and segWit implementation.
Lightning Network – which consists of user-generated payment channels off of the main chain, allows for faster transactions at lower fees. Although its adoption is slow, it can facilitate up to 15 million transactions per second on the Bitcoin network.
Bitcoin is pseudonymous and the Taproot upgrade makes Lightning Network transactions indistinguishable from one another. Unlike Bitcoin, Bitcoin Cash uses coin mixing to preserve transaction privacy. The protocol hides the source of coins.
#2) Block size: Each block contains a certain set of data with a data weight or size known as the block size. In Bitcoin Cash, the block size is designed to be higher to enable it to handle more transactions per block. It can process more transactions per second.
| Bitcoin | Bitcoin Cash | |
|---|---|---|
| Block size | 1 MB | 32 MB |
| Amount of transactions per second | 7 | 200 |
| Current cost on average (transaction fees) as of October 2020 | $0.28 | $2.455 |
#3) Support for smart contracts: Although Bitcoin does not support smart contracts yet, Bitcoin Cash has implemented Cashscript and other languages that enable it to support smart contracts. Currently, Bitcoin Cash hosts two smart contracts, namely CashSuffle and CashFusion.
However, Bitcoin is looking into building smart contract functionality to support DeFi protocols.
#4) Token issuance: While projects can issue tokens using the Omni layer, which has next-generation features, Bitcoin Cash uses Simple Ledger Protocol (SLP), which works in similar way tokens are issued on Ethereum.
The most recent craze about NFTs and DeFi has left Bitcoin supporters wanting to think about how the blockchain can support them. Bitcoin Cash is, however, capable of supporting NFTs via the SLP protocol.
#5) Replace by fee transactions: Replace by fee feature on Bitcoin allows a user to replace a stuck transaction with another one for higher gas fees. This can be used for faster transacting and most of the RBF systems prevent double-spending by requiring all the same outputs in the transaction. It is also impossible if the recipient waits for a few network confirmations.
This feature is not on Bitcoin Cash, hence all unconfirmed are not reversible. Given higher transaction throughput, RBF is harder on Bitcoin Cash.
Bitcoin Cash vs Bitcoin: Advantages & Disadvantages
Advantages:
#1) Larger user base: Bitcoin has a huge following around the world, with over 70 million wallet users at the end of March 2021. The number of Bitcoin Cash users is not clear.
#2) Large social media user base: Bitcoin has a dedicated forum that has over 2.6 million members. The same huge following applies on Reddit and other social channels. It is much higher than Bitcoin Cash. Bitcoin Cash has a dedicated forum with 92,792 members. However, Bitcoin Cash has a large following of 604,000 members on its Reddit channel.
#3) Transactional volume: Bitcoin’s transactional volume is higher than Bitcoin Cash’s.
#4) Wider adoption: By much far, Bitcoin is used at more merchant stores than Bitcoin Cash. More financial and non-financial institutions also used it – as part of their trading products, custody, and liquidity provision. More people are also invested in Bitcoin than Bitcoin Cash.
Bitcoin is available for purchase on most apps, crypto exchanges, stores, and platforms, then is Bitcoin Cash. Bitcoin is listed by more institutions for trading than Bitcoin Cash.
Besides this, Bitcoin has several Exchange Traded Funds or ETFs than Bitcoin Cash. Bitcoin can be traded on Nasdaq and other stock exchanges through these ETFs and similar derivative products, unlike Bitcoin Cash. Hence Bitcoin has more derivative products on which it serves as an underlying asset than Bitcoin Cash.
#5) Stability: Bitcoin is way more stable than Bitcoin Cash as a digital asset given the wider adoption. In other words, it is harder for Bitcoin to disappear than Bitcoin Cash.
Disadvantages:
#1) Lower scalability: Bitcoin is not only older, slower, and less scalable, but also costs more per transaction than Bitcoin Cash. The figures for transactions per second for each network have already been shared.
#2) Disunity: Bitcoin’s core development team is not as united as that of Bitcoin Cash. It lacks clear leadership, although that’s better for decentralization.
Where To Buy Bitcoin And Bitcoin Cash
#1) Peer-to-peer exchanges: Peer-to-peer platforms for Bitcoin include LocalBitcoins.com, Paxful, and LocalCryptos. For Bitcoin Cash, check Local.bitcoin.com and Paxful. These allow you to buy any amount at any fiat value from peers, instantly using any fiat deposit methods.
#2) Mainstream crypto exchanges: Mainstream crypto exchanges include Coinbase, Binance, Bitfinex, Gemini, and many others. They allow you to purchase with supported fiat bank and card methods as well as with other cryptos.
#3) Brokerages, OTCs, CFDs, and Derivatives: These brokerages include AvaTrade, Plus500, eToro, Admiral Markets, Pepperstone, etc. CFDs mean you won’t be trading actual crypto but betting on profits by signing and trading contracts.
OTCs allow you to trade huge amounts of cryptocurrencies per trade without any limitations. You can check OTCs like Bit2Me as well as OTC desks operated by different crypto exchanges. Exchanges with these OTCs include CoinJar, Genesis, Binance, Kraken, ItBit, FalconX, Satstreet, and Cumberland mining.
Bitcoin Cash Vs Litecoin
For those considering Litecoin vs Bitcoin Cash, Litecoin was also forked from Bitcoin but in 2011 by a former Google engineer named Charlie Lee. Unlike Bitcoin Cash and Bitcoin, it cannot be mined with ASICs but CPUs, which is thought to lead to better decentralization. It uses a scrypt algorithm.
For those considering Litecoin vs Bitcoin Cash, the former is cheaper at $0.03 or $0. 04 per transaction but has a lesser value in terms of price per coin and adoption. Each block is created faster than Bitcoin Cash at 2.5 minutes and the cap supply is 84 million.
For those asking about Bitcoin Cash vs Litecoin, the total market cap of over $12.4 Billion and 24-hour trading volume of $3,340,902,419 are both higher than those of Bitcoin Cash.
Bitcoin Cash Vs Ethereum
If you were to weigh Bitcoin Cash vs Ethereum, the latter is way much better with a higher market capitalization — $423,495,991,927, the higher 24-hour trading volume of $22,574,279,365, adoption value and user base, better support for smart contracts, price, and flexibility. Ethereum is also more energy-efficient as it is moving to proof of stake while Bitcoin Cash remains proof of work. Bitcoin Cash is, however, currently much better in terms of transaction fees.
Conclusion
This tutorial helps you learn and compare Bitcoin vs Bitcoin Cash. We learned they share similarities, like block time, mining algorithm, transaction procedure, and purpose to some extent. However, they are different in terms of block size, with Bitcoin Cash being better than Bitcoin in terms of transactional throughput, cost, and support for smart contracts, DeFi, and NFTs.
In conclusion, Bitcoin is best for investors who need crypto with the largest investor and user base and more value. It has a better rate of adoption, higher market capitalization, trading volumes per day, and maturity in the market.
In comparison, Bitcoin Cash is more preferable for those looking for a cryptocurrency with better transactional throughput, DeFi, and NFTs support.
Total Time Spent On This Research: 7 hours