The new digital currency bitcoin cash is the result of an ongoing debate between different factions of the bitcoin community on how to best scale the bitcoin network. Unable to come up with a single solution that would have helped the bitcoin cryptocurrency stay unified, the bitcoin blockchain split into two on August 1, 2017, to create bitcoin cash as a new digital currency alongside bitcoin.
What is Bitcoin and Bitcoin Cash?
Bitcoin was launched in 2009 as the world’s first cryptocurrency with the aim to provide a decentralized digital payment system that anyone can use without the need for a bank or any other financial intermediary.
Since its inception, bitcoin’s value has grown substantially and even surpassed the value of a troy ounce of gold in early 2017. In September 2017, the price of bitcoin rose an all-time high of more than $4,900.
Today, bitcoin is utilised as an alternative currency across the globe after having gotten the green light from various governments. Bitcoins market worth has also grown to more than $60 billion.
Besides being used as a currency to make purchases online, bitcoin is also used as an investment asset class, a storage of wealth and as a low-cost payment system.
Bitcoin cash, which carries the ticker BCH, was created after a fork of the popular bitcoin network on August 1, 2017. Therefore, any users who had bought or invested in bitcoin before the hard fork received an equal amount of bitcoin cash holdings in their bitcoin wallets, which is why bitcoin cash immediately became one of the biggest cryptocurrencies in terms of market capitalisation.
What is the Difference Between Bitcoin and Bitcoin Cash?
As mentioned earlier, bitcoin cash was created as an answer to the scalability faced by bitcoin.
The main and only notable difference between bitcoin and bitcoin cash as noted by users of both blockchain technologies, is that bitcoin’s block size remains at one megabyte allowing for around 250,000 transactions in a day while bitcoin cash increased its block size limit to eight megabytes allowing for the processing of close to two million transactions in a day.
Given the same hashrate, bitcoin cash is, therefore, able to allow for more transactions in any given second which makes its payments faster and cheaper. This means that in the long run, bitcoin cash may be viable and may less minimal scalability hurdles given its larger block size.
Even with the high speed and low cost of transactions, most of bitcoin’s infrastructure such as the remittance platforms, payment systems, and wallets have no support for bitcoin cash and see it as an altcoin. This limits the use of bitcoin cash as it does not go beyond certain purchases. Questions and doubts, therefore, arise on the value of bitcoin cash as there is little to no adoption by users and merchants.
Although there is some support for bitcoin cash from the bitcoin community members who wanted larger blocks, the vast majority of the community still supports the original bitcoin blockchain that has since undergone a SegWit upgrade to improve its scalability.
With the split, we can only join strategic investor and advisor at BTCXIndia, Linus Lindgren, in hoping that the two parties can stop arguing and “instead […] focus all their energy on developing their respective project, in whichever direction they deem best to achieve the goal that’s important for them.”