Gerard Dawson Gerard Dawson is an educator, tech fan, and published author. If he's at his laptop, he didn't hear you.

Bitcoin vs. Bitcoin Cash

4 min read

On August 1st, 2017 a small group of people working on Bitcoin forked (aka. copied) the Bitcoin code and created a brand new cryptocurrency called Bitcoin Cash. As of that day moving forward, both Bitcoin and Bitcoin Cash exist as two seperate, and working currencies.

The Bitcoin community recognizes that there is a known scalability problem with Bitcoin often referred to as the bitcoin scalability problem. Within the Bitcoin Core team (the originally team is sometimes referred to as Bitcoin Core to distinguish it from Bitcoin Cash, and even Bitcoin Gold) not everyone could agree on the solution to this problem

Why was Bitcoin Cash created?

Takeaway:

You don’t need to understand all the technical details in order to understand Bitcoin vs. Bitcoin Cash. The most important thing to understand is that Bitcoin (BTC) is Bitcoin, and Bitcoin Cash is a copy of Bitcoin. There are some Bitcoin enthusiasts, like Erik Voorhees of ShapeShift, who have suggested that Bitcoin Cash should use a different name because essentially it’s something completely new. Bitcoin Cash (BHC) proponents are Satoshi loyalists that believe that Bitcoin should be a reliable, fast, inexpensive peer-to-peer transaction system. They believe that Bitcoin Cash is the “real bitcoin” as Satoshi intended it to be.

Technical Explanation:

Bitcoin Core was lobbying for a solution known as SegWit (Segregated Witness). The idea behind SegWit is to reduce the amount of data involved in Bitcoin transactions by removing the signature data. Each transaction has its own digital signature, so this makes up a lot of data (about 65% of all the data on the blockchain is estimated to be composed of digital signatures). Less data per transaction means room for more transactions.

The developers responsible for Bitcoin Cash do not like the idea of SegWit and want to settle the problem of scaling Bitcoin another way. They want to increase the blocksize and block limit, allowing more transactions to be stored on each block. This would increase the speed at which blockchain transactions can occur.

What is the innovation behind Bitcoin and Bitcoin Cash?

The innovation behind both Bitcoin and Bitcoin Cash is that they allow two people to send money on the Internet without a third party (like a bank). For example, at the moment I can send you money via Paypal, Citibank or Bank of America, but in all of these scenarios we are trusting these companies to manage our transaction. The problem with this current system is that banks take fees to manage our money, and banks are being attacked by hackers daily. Bitcoin and Bitcoin Cash allow people you and me to exchange money without using a bank, and without relying on a company.

A Basic Understanding of Bitcoin vs Bitcoin Cash

Today, Bitcoin is often regarded as a store of value (similar to how gold is valued as a global store of value), and for sending higher amounts of money (think: like a wire transfer), rather than for small casual transactions. Bitcoin Cash is often regarded as a currency for day-to-day transactions. In fact, the tagline for Bitcoin Cash is “Peer-to-peer electronic cash for the Internet.”

Bitcoin is:

  • A decentralized global digital currency
  • Stored on a public ledger (known as a blockchain) where each transaction takes 10 minutes to clear (to be approved)
  • Developed by Satoshi Nakamoto — an unknown figure or group of people

Bitcoin Cash is:

  • A decentralized global digital currency
  • Stored on a public ledger (known as a blockchain) where each transaction takes 10 minutes to clear (to be approved)
  • Developed by a group of contributors; announced by Amaury “Deadal Nix” Séchet at the Future of Bitcoin conference in Arnhem, Netherlands. Thereby forking the original Bitcoin founder Satoshi Nakamoto’s work.
  • Bitcoin Cash is allegedly easier to scale to more people than Bitcoin because it allows more transactions per second

 

In summary: Bitcoin is more like digital gold, whereas Bitcoin Cash is often thought of as a digital cash.

Comparison chart: Bitcoin vs. Bitcoin Cash

Bitcoin (BTC)

bitcoin

Bitcoin Cash (BCH)

bitcoin cash

What is it? A store of value A fork from Bitcoin, and a currency for daily transactions
Inventor Satoshi Nakamoto A small group of bitcoin miners
Went live January 2009 August 2017
Supply Style Deflationary (a finite # of bitcoin will be made) Deflationary (a finite # of bitcoin cash will be made)
Supply Cap 21 million in total 21 million in total
Smallest Unit 1 Satoshi = 0.00000001 BTC 1 Satoshi = 0.00000001 BCH
New token issuance time Every 10 minutes approximately Every 10 minutes approximately
Amount of new token at issuance 12.5 new bitcoin are issued every 10 minutes. This number will half (to 6.5 new bitcoin) everytime Bitcoin creates 210,000 new blocks. The next halving will be reached 2020. Because BCH shares the same Blockchain as BTC, the amount of new token at issuance is the same.
Utility Bitcoin has been trending towards becoming a store of value like code. Although it is also used for purchasing goods and services Used for purchasing goods and services, as well as storing value (much like how we currently use a checking account).
Price View price View price
Purpose “Bitcoin is an innovative payment network and a new kind of money.” via the official Bitcoin website [฿] “Bitcoin Cash brings sound money to the world, fulfilling the original promise of Bitcoin as “Peer-to-Peer Electronic Cash”.”- via the Bitcoin Cash Website [Ł]

 

Where do I buy bitcoin and bitcoin cash?

Coinbase is the easiest place to buy both bitcoin and Bitcoin Cash. If you want slightly lower service fees and a more robust interface, then Gdax (a site owned by Coinbase) offers an alternative to Coinbase.

How much does it cost?

Cryptocurrency prices are constantly fluctuating given the supply and demand. To keep an eye on bitcoin, bitcoin cash, or any other altcoin (an altcoin is coin other than bitcoin) head to coinmarketcap.

bitcoin vs. bitcoin cash: How many tokens are available?

  • The max supply of Bitcoins is 21 million. Every 10 minutes a new block of bitcoin is generated. The final Bitcoin will be mined 2140.
  • The same goes for bitcoin cash: The max supply of Bitcoin Cash is 21 million. Every 10 minutes a new block of bitcoin cash is generated.

bitcoin vs. bitcoin cash: What can I do with them?

Bitcoin is trending towards a replacement of gold as a store of value. Whereas gold exists with mass and weight in the physical world, bitcoin is an improvement to gold because it can be split into into very small fractions, and instantly sent to people, businesses, and banks around the world.

Bitcoin Cash is promising to replace cash. Due to its lower price and faster transaction times, it’s the perfect solution for buying a coffee, tipping a YouTuber, or gifting a friend or family member.

How to store bitcoin and bitcoin cash:

Both web wallets, and hardware wallets exist for Bitcoin and Bitcoin Cash, and there are a many options ranging high to low levels of security.

bitcoin (฿) and bitcoin cash(Ł) bitcoin (฿) only
Hardware Trezor

Ledger

Mobile Coinspace Samourai

BitPay

Mycelium

Desktop Exodus Electrum
Web Jaxx Blockchain.info
Paper Bitcoin Paper Wallet

Bitcoin Cash Paper Wallet

Learn more about Bitcoin and Bitcoin Cash:

Top Resources for Bitcoin

 

Top Resources for Bitcoin and Bitcoin Cash

Gerard Dawson Gerard Dawson is an educator, tech fan, and published author. If he's at his laptop, he didn't hear you.

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