As you probably know by now, Bitcoin is the first cryptocurrency ever created and is broadly recognized as modern-day digital gold. Bitcoin has the highest trading volume because of its higher liquidity and trading pairs compared to other cryptocurrencies. Simply saying that BTC is quite popular nowadays would be a colossal understatement. And if you ask anyone from a small kid to an older adult to name one cryptocurrency that first comes to their mind, it would be Bitcoin, for sure.
On the other hand, Bitcoin Cash, or BCH, is another cryptocurrency created as an electronic payment mechanism that is cheap and relatively simple to operate. BCH is quickly spreading its roots in the crypto world because of its faster transaction times due to its larger block size. Plus, it can handle more transactions at a time when compared to its older brother BTC.
But are there other differences between BTC and BCH, and, most importantly, can Bitcoin Cash prove to be a good investment for crypto enthusiasts in 2023? In this article, we’ll go through the top differences between the two popular cryptocurrencies, but before we get down to that, let’s check what Bitcoin Cash is and how it works.
The Emergence Of BCH
First of all, you should know that BCH was born through the so-called hard fork of BTC, which is the transmutation to an open-source software of BTC’s blockchain. This transmutation resulted in two branches of the blockchain: one followed the old set of protocols, while the other was a completely new one.
In 2017, a considerable number of Bitcoin miners, holders, and businesspeople, which constituted about 80% of the total BTC holding entities, held a meeting to determine what the future of this cryptocurrency would look like. The result of the meeting was the introduction of the SegWit2x upgrade.
The “Segregated Witness,” or SegWit2x, was the upgrade that would help scale BTC by segregating the data outside the blockchain’s space and adjusting the size of each block up to 2MB. But while all of this was meant to be implemented through a hard fork, the proposal faced strong resistance from the BTC community because the centralizing force was skipped.
Put differently, those in favor of small blocks were firmly against the increase in the block size because the process would lead to difficulty for full node hosting, which would eventually centralize BTC. This BTC-related debate gave rise to the hard fork, and the individuals supporting bigger 2MB blocks finally decided to fork the blockchain of Bitcoin. As a result, Bitcoin Cash, or BCH, came into existence.
The Differences Between BTC And BCH
As developers continued to work on both networks and had different visions about BTC and BHC, the number of differences between the two kept increasing. All this led to a continuous increase in the changes of both currencies, which although share a common code base and transaction history, they are two completely different assets. Here are the differences between Bitcoin and Bitcoin Cash worth noting:
Market Penetration
Of course, when it comes to market penetration and investor confidence, Bitcoin emerges as the clear favorite and superlative cryptocurrency. BTC is the segment’s base currency, and nearly all other cryptocurrencies trade against it.
On the other hand, Bitcoin Cash is a much younger cryptocurrency than BTC. But while Bitcoin Cash is still in the process of being recognized, it can certainly become a top asset in the crypto market very soon.
Scalability Differences
As we already said, the maximum block size of Bitcoin cannot exceed 1MB. In that context, this results in lesser scalability options because of the execution of fewer transactions per second compared to Bitcoin Cash.
BCH’s maximum block size is 32MB. Accounts for more scalability, providing this crypto blockchain with the executive power to make more transactions than BTC.
Development
Bitcoin’s development community is deemed to lack true, effective leadership. For that reason, BTC comes with slower updates and implementations, which practically opens up the door for third-generation cryptocurrencies like BCH due to this issue.
In contrast, Bitcoin Cash’s development team is fast and agile at implementing updates and new implementations. They are all about implementing Satoshi Nakamoto’s vision for BTC with BCH and creating a decentralized cash system that will eventually take the place of fiat money.
Security Issues
Bitcoin is considered more secure than Bitcoin Cash because of its smaller-sized blocks that can revolve in the best possible manner. Conversely, Bitcoin Cash is less secure than Bitcoin because of its larger-sized building blocks.
Final Thoughts
Now that you have a better idea about the most significant differences between Bitcoin and Bitcoin Cash, you should also know that both represent good inflation hedges and can prove valuable in diversifying your crypto portfolio. Nevertheless, before investing your money in any cryptocurrency, please do a substantial amount of research.
