With Bitcoin’s latest bull run the world has well and truly woken up to the powerful benefits of the cryptocurrency industry. Whether people are using the network as an investment, to gamble online, or to buy their morning coffee, there is no denying that the global adoption rates have skyrocketed. As we explore the Bitcoin vs Bitcoin Cash conversation, we’re taking a look at how it all began, and highlighting the differences between these two seemingly similar cryptocurrencies.
The Great Divide
In early 2017 there was a great divide in the Bitcoin community regarding the future of the cryptocurrency in terms of its scalability issue. While some developers wanted to change the format of the blocks, others wanted to increase the block size limit. No consensus was reached so a number of developers from the latter group merged to create their own cryptocurrency.
August of 2017 is when the Bitcoin Cash network was officially forked from the Bitcoin network. Similar to the old version, Bitcoin Cash had several things in common such as the same limited supply of tokens and the primary use case of being a payment system. However, the new network increased its block size from 1MB to 8MB. It also adjusted the level of difficulty in the verification process to ensure faster transactions while still maintaining the chain’s survival. In layman’s terms, the bigger blocks resulted in faster and cheaper transactions.
The Great Differences
When pitting the two cryptocurrencies against each other there are a number of similarities. However it is the differences that set them apart. Let’s first take a look at the characteristics these two have in common. Both these networks are capable of holding value and can be used for transactions (the sending and receiving of funds). And as mentioned earlier, they both too have a limited supply of 21 million coins. While Bitcoin has 18.6 million in circulation, Bitcoin Cash has just over 20,000 more coins in circulation at the time of writing.
Now for the differences. Due to Bitcoin being around for longer it has created a higher market penetration and gained more investor confidence. Being the first cryptocurrency to come into existence, it is also considered to be the “base” currency, so to speak, of the entire cryptocurrency industry.
On the other hand, Bitcoin Cash is younger but offers high levels of potential due to its network changes. The core development team is also a lot more unified when compared to Bitcoin’s. The latter lacks a sense of leadership (being decentralized this shouldn’t come at a huge surprise). Looking at its most valuable offering, due to the increased block size Bitcoin Cash is able to facilitate faster and cheaper transactions giving it a great real world potential.
At the time of writing, the BTC price was roughly $31,500 with a market cap of $570 billion. BCH was trading at $400 with a market cap of $7.3 billion. Bitcoin Cash is currently ranked number 9 on the list of cryptocurrencies based on their market caps. While the BCH network can handle more transactions per second than the BTC network, the BTC network has a much greater presence in the industry and therefore more liquidity. Should more merchants, including PayPal’s announcement, look to take on BCH as a payment option, the network is certainly capable of handling large volumes of transactions at any given time.
It is also worth noting that in November 2018, the Bitcoin Cash network underwent its own hard fork. This resulted in Bitcoin S.V. which looks to recreate the original vision that Satoshi Nakamoto indicated in the Bitcoin whitepaper back in 2018 (S.V. stands for Satoshi’s Vision).
Bitcoin vs Bitcoin Cash
While no one can claim that the one cryptocurrency is better than the other, sure you can see the prices are different, but the core values of both are equally valuable. While some feel that these two networks offer the same function, that isn’t necessarily the case. It is perfectly acceptable for these cryptocurrencies to co-exist. An investor can look to Bitcoin as a store of value, while using Bitcoin Cash as a payment method.