Difference between Bitcoin and Bitcoin cash: When we think of betting with bitcoin, the first one that comes to our minds is Bitcoin obviously. However, this is not the only one that exists in the market. Which is full of other crypto assets similar to BTC, including a division of the Bitcoin community itself, Bitcoin Cash. But what differentiates these currencies from each other? Here we tell you in the following post.
The birth of Bitcoin:
Bitcoin was born in 2008, in the middle of the global financial crisis. When its legendary creator, Satoshi Nakamoto, set out to create a mechanism to prevent something like this from happening again. Designing a virtual currency, decentralized and impossible to manipulate: Bitcoin.
This cryptocurrency has been proposed from the first day to represent an alternative to fiat money. Allowing its use for the realization of exchanges for goods and services. But avoiding what Nakamoto considered were vices of fiat money, such as unlimited printing of money by the State.
Since then, the BTC has become the most famous virtual currency in the world. Driving the development of other cryptocurrencies for many different purposes. Including currencies such as Ethereum for the creation of smart contracts, or XRP to accelerate international financial transactions. All of them inspired by Bitcoin.
Problems and Solution:
However, not everything has been easy for BTC. Well, in its own development there have been a significant amount of problems that are still looking for a solution. Among which the main one is that of scalability.
And, the small size of the Bitcoin blocks has led to the emergence of bottlenecks in cryptocurrency transactions. Which do not run fast enough, accumulating and increasing the commission paid by users to transfer money. What would be the cause of the origin of Bitcoin Cash.
Differences between Bitcoin Cash:
Although the basis in the BCH code continues to be Bitcoin programming. Bitcoin Cash maintains substantial differences with respect to its mother Blockchain. The main one being their 8 MB blocks, later increased to 32 MB.
This allows operations with Bitcoin Cash to be much faster than with BTC. Reducing waiting times as well as commissions for users. What, however, has not served for BCH to consider a replacement for BTC within the crypto world.
On the contrary, most users who own Bitcoin Cash do not use it to acquire goods and services. But to carry out financial operations in the cryptocurrency market. What has led BCH to try to diversify in recent times. Promoting different characteristics to only making payments, such as the creation of decentralized applications.
Soft fork & Hard fork:
When there is an update of the protocol, it must acceptby most complete nodes. A soft fork is an update of the protocol that the node community accepts and is implemented as the new protocol of that same blockchain.
In the case of the soft fork, the nodes that have not implemented the update can continue to use the blockchain but without benefiting from the update. However, the blocks mined from that moment should update their mining software so that their blocks be accepted. For example, SegWit is a soft fork that implements an improvement of the code to reduce the weight of the transactions in the blocks so that each block can validate more transactions.
Hard Fork:
A hard fork, on the other hand, generates a new blockchain, where the old protocol is not valid. When a hard fork produces, the blockchain branches. So that it gives rise to two blockchains, two protocols and therefore two coins.
This is the case of Bitcoin Cash, a hard fork that was produced on August 1, 2017, by the community that did not agree with SegWit and created this fork that expanded the block size from 1MB to 8MB.
It should be noted that when a hard fork produces, you do not lose your coins, they are replicated in the new blockchain so that with your keys you will have the same units in the new blockchain as in the original at the time of the fork.
Difference between Bitcoin and Bitcoin cash:
The fundamental difference between Bitcoin and Bitcoin Cash is in the block size. While Bitcoin currently has a block size of 2 MB, Bitcoin Cash currently has 32 MB after a hard fork on May 15 which increased it from 8 MB. The reason for this difference lies in the scalability of the cryptocurrency, those who would trade with Bitcoin when its price was skyrocketing surely remember the high commissions. These work so that the miners first include the transactions with the highest commission.
Bitcoin commission in dollars:
This is where the controversial commissions arise, if you want your transaction to validate before, you must pay a higher commission. Depending on the demand for the use of the network, commissions will rise or fall, so they have an important correlation with the price.
It is in relation to this problem where Bitcoin Cash arises, increasing the size of the block allows more transactions per minute then assumes lower commissions. In fact, the increase in popularity and price of Bitcoin Cash coincides with the increase in Bitcoin network commissions.
Average transactions in BTC:
As the size of the Bitcoin block is “capped” to 2 MB (before 1 MB) they only have space within a limited number of transactions (the average transaction weighs about 255 bytes).
A block mine every 10 minutes, in fact, the protocol is programming so that when transactions are made in less time the difficulty of undermining the block increases and if it takes longer it decreases giving an average of 10 minutes per block.
The consequence of this is clear, a maximum of about 400,000 transactions per day. That means about 3-5 transactions per second. Visa has the capacity to support 50,000 transactions per second.