Unless you have been living under that proverbial rock, you’ve heard of bitcoin. You have probably heard of other cryptocurrencies, like litecoin, Ether, Ripple and others based on the bitcoin platform. However, there is a new contender out there that is even more similar to bitcoin than most other altcoins – Bitcoin Cash. What is it, and how do the two similar-sounding cryptocoins differ from one another?
The Problems with Bitcoin
Despite bitcoin’s incredible popularity, the cryptocurrency has some real issues. Transaction speed is one of those. Compared to credit card systems, which can process 1,700 or more transactions every single second, the bitcoin network can process around seven. That makes it incredibly slow. There’s also the fact that as transaction time increases, so do the costs involved.
Then there’s the issue of scalability – the transaction cost is the same for all trades on the bitcoin network, meaning that someone processing a very small transaction will pay the same fee (based on network processing time and other factors) as someone processing a very large transaction. Finding answers to these problems has led to a number of potential developments, and new technologies, such as the adoption of SegWit. It also led to the creation of Bitcoin Cash.
What Is Bitcoin Cash?
In late 2017 when SegWitx2 finally bit the dust, and SegWit was up for offer, some bitcoin miners and developers realized that they had qualms about the whole thing. They felt that none of the proposed solutions really addressed the core problems correctly, and that the original bitcoin vision was being diluted, even lost. They forced a hard fork in the currency, and Bitcoin Cash was born.
Differences between Bitcoin and Bitcoin Cash
There are quite a few differences between bitcoin and Bitcoin Cash that go beyond the names. One of the most significant differences is in block size. Previously, bitcoin was limited to block sizes of just 1 mb. SegWitx2 would have doubled that, but it was nixed before it could be adopted. SegWit, which replaced SegWitx2 raised the block size limit to 1.8 mb, instead. In comparison, Bitcoin Cash has a block size of 8 mb.
What does the increased block size mean? It actually gives Bitcoin Cash several advantages over bitcoin itself. For instance, the larger block size means that transactions can be processed much more quickly. In addition to allowing more data to be processed at one time, and thereby helping to eliminate some of the backlogs that have plagued bitcoin for some time. However, Bitcoin Cash also managed to increase transaction verification speed. The goal is to reduce processing time on the network from two minutes per transaction to 30 seconds per transaction (bitcoin’s transaction speed is 10 minutes per transaction).
Challenges with Bitcoin Cash
While Bitcoin Cash has certainly trumped bitcoin in the areas of transaction speed and block size, that’s not the whole story. One of the most critical considerations with cryptocurrency, and blockchain technology in general, is security. There are significant fears that Bitcoin Cash’s faster speed makes it more vulnerable to hacking and other malicious attacks.
No Clear Future
Another problem with predicting how well Bitcoin Cash might perform in comparison to bitcoin itself is the fact that the cryptocoin is still very young. It’s largely unproven. The constant revaluation and fluidity of the crypto market add to the challenge here.
In the end, Bitcoin Vs Bitcoin Cash can be viable options for mining, investment and trading. However, they are very different. The future is cloudy when it comes to determining whether Bitcoin Cash will ultimately eclipse its parent cryptocoin, or if it will be derailed by security concerns stemming from the very differences between Bitcoin Cash and bitcoin.