Bitcoin vs Bitcoin Cash — two major cryptocurrencies that share part of their name. That much is clear, but what are the actual differences between them?
If you’re a potential investor or just a crypto fan who wants to know more about the differences between the two, you’ve come to the right place. We’ll cover everything you need to know in this piece!
What Is Bitcoin Cash and How Was it Created?
While we all know what Bitcoin is, it’s worth touching upon what Bitcoin Cash is, as that will help you better understand the more nuanced differences between the two.
The two cryptocurrencies share the same name for a reason — Bitcoin Cash was made using Bitcoin as its basis.
More specifically, it split or “forked” from Bitcoin in August 2017. This was done by Bitcoin developers and miners who were concerned about the future of the world’s newest payment option.
This was no betrayal of Bitcoin, nor was it an illegal move on the developers’ part. That’s because any group of developers who want to change some aspects of the coin can do so by effectively splitting the blockchain that hosts the crypto.
This is precisely the news we got when Bitcoin Cash came into the world. The developers and miners had completed a hard fork to give life to the new coin.
To understand what this means, consider that in the world of cryptocurrencies, there are two ways a specific coin can be split — a hard and a soft fork:
- Hard fork — A new blockchain and thus a new crypto is created. Both the old and the new blockchains exist side by side, which is what happened in the case of BCH vs BTC.
- Soft fork — The same cryptocurrency and blockchain remain in place, but everyone adopts new rules and the old version remains on the network. In other words, one cryptocurrency remains in place, the new one.
The developers initiated and completed a hard fork because they were concerned about the future of cryptocurrency in general, and more specifically about the ability of Bitcoin to scale well with the increase in the number of transactions on the network.
Interestingly, the hard fork didn’t meet the expectations of everyone involved. That’s why Bitcoin Cash experienced its own hard fork in late 2018, when Bitcoin SV was created.
Will Bitcoin Cash Replace Bitcoin?
It’s evident that Bitcoin Cash outperforms Bitcoin in certain ways, especially where the main problem of scalability is concerned.
The BCH network can handle many more transactions, which means payments are much faster and more practical for everyday use. It also allows for easier and faster mining.
In this sense, Bitcoin Cash not only could become better, but already is better than Bitcoin in some ways. However, that doesn’t mean BTC will eventually replace Bitcoin. Thanks to Bitcoin’s long history and its near-continuous rise, the chances of Bitcoin Cash surpassing it are slim.
What’s more, Bitcoin Cash certainly hasn’t solved all the problems people were hoping would be fixed. That’s precisely why it experienced its own hard fork and why it’s unlikely to replace the king of crypto.
Then again, you need to be aware that there is no reason for Bitcoin and Bitcoin Cash to clash. Most people aren’t concerned about one “defeating” the other; everyone is free to use either or both.
This is especially true in novel industries, like the esports industry, a market with revenues that have already surpassed $1 billion and are likely to reach $1.6 billion by 2024.
Bitcoin Cash vs Bitcoin — Key Differences
Now that you know what Bitcoin Cash is, you’re probably already seeing some differences between it and its parent coin. However, there are many other differences that you might not know about. We’ll explain each major one in detail.
Before we begin, it’s worth mentioning that the two cryptos are still the same in some crucial ways:
- Both coins use the proof-of-stake system, where miners can confirm transactions to gain additional coins.
- Both have a difficulty adjustment algorithm (DAA) that changes the difficulty of creating new blocks and thus new coins.
In other words, the technology behind both is similar, if not the same, and the same can be said for the use of the coins.
People use both of these cryptos as long-term investments and for trading purposes. They also sometimes use them to pay for specific digital services, whie sports bettors use them to make payments and place bets on online sportsbooks.
What’s more, some of the leading sports betting sites on the web allow both deposits and withdrawals using Bitcoin, while a few offer the same with Bitcoin Cash.
The same goes for high-quality poker sites and online casinos that offer various luck-based games.
Now that that’s out of the way, let’s discuss the key differences between Bitcoin Cash and Bitcoin.
Transaction Processing Speeds
The main difference between Bitcoin and Bitcoin Cash is the speed of the transactions users make.
If you’re not new to the crypto world, you certainly know that Bitcoin’s transaction processing speed is relatively slow. On average, after a person initiates a transaction, it’s confirmed within 10 minutes.
However, people can wait up to a whole hour or more if the network is particularly busy.
In other words, the processing speed for Bitcoin is only seven transactions per second at best. That’s precisely why scalability is a real issue with the world’s most popular cryptocurrency.
That problem is not as pronounced with Bitcoin Cash, as the network can handle around 200 transactions per second.
It’s worth mentioning that not even BCH comes close to traditional payment methods. For example, Visa typically handles around 24,000 transactions every second.
Bitcoin vs Bitcoin Cash — Transaction Fees
Almost every crypto transaction incurs a fee — one that’s paid to the crypto network and then split between the miners who verify the transaction.
Since Bitcoin Cash and Bitcoin use similar technology, they both rely on these fees. However, there is a big difference in the average size of the fees.
In general, transaction fees are significantly higher with Bitcoin than Bitcoin Cash. For some people, this is the most important difference between BTC and BCH.
However, it’s worth mentioning that the fee differential isn’t massive in real terms. It was a much bigger issue back when BTC fees were as high as $60 per transaction.
Nowadays, those fees are usually around $2 or $3, while BCH fees are less than a cent on average. Indeed, BCH fees have never crossed the $1 mark. So if you’re making the occasional large transaction, it’s not a big deal, but if you’re using crypto for frequent small purchases, BCH is a much better option.
When crypto fans discuss whether they prefer Bitcoin or Bitcoin Cash, they usually talk about the block size.
A block is a data structure within the blockchain of a crypto where transaction data is permanently recorded.
A single block stores a certain number of recent transactions, and once they’re validated, it’s closed for good. That way, it becomes a permanent record of those transactions and ensures that no one can change history and damage the currency’s credibility.
Now that you understand what a block is, you can appreciate why its size matters. The bigger the block, the more transactions the network can handle. Naturally, other factors like block generation speed play a big part, but the size of the block is still critical.
So, what is the difference between Bitcoin and Bitcoin Cash as far as the size of their blocks is concerned?
It’s simple: BCH has a larger block, so it handles more transactions. Bitcoin Cash’s maximum block size is now 32 MB and could be increased once the blockchain grows enough to warrant the change. As for Bitcoin, the block size hasn’t changed; it still sits at only 1 MB.
As you’ve likely witnessed yourself, Bitcoin’s price has risen phenomenally since its launch in 2009, with a couple of massive drops scattered here and there.
Its value reached nearly $70,000 at its peak, but at the time of writing sits at around $47,000.
The price of Bitcoin Cash is significantly lower than that of its parent coin. Soon after its launch in 2017, it reached a peak of nearly $4,000, but has since dropped considerably. At the time of writing, it’s worth just under $400.
So, in the Bitcoin versus Bitcoin Cash debate, it’s clear that the value of Bitcoin has always been much higher.
Naturally, as both are cryptocurrencies, you can expect these prices to change significantly in the future, as they have in the past. However, if history is any guide, the chances of Bitcoin Cash getting anywhere near the price of Bitcoin are pretty low.
BTC vs Bitcoin Cash — Minor Differences
We’ve covered all the significant differences between the two coins, but there are still a few that deserve a mention:
- Bitcoin doesn’t support smart contracts (digital contracts that complete automatically when pre-agreed terms are met), while Bitcoin Cash has started using specific smart contract languages that let the network offer more complex features.
- You can issue a token on the Bitcoin blockchain, but since the network doesn’t have the technology embedded within itself, you have to use an additional platform called the Omni layer. With Bitcoin Cash, you only need to use the Simple Ledger Protocol to issue tokens.
- Bitcoin has a feature called replace-by-fee (RBF) that lets you change a stuck transaction for a new one with a higher fee. Bitcoin Cash has dropped the RBF feature, which means transactions on its network are irreversible.
Should I Buy Bitcoin or Bitcoin Cash in 2022?
Before we begin answering this question, you first need to understand two important things:
- We can’t give you financial advice. We can only tell you which coin we have found to be better for people in certain situations, and you should only use this knowledge to help you do additional research, and only then should you make your own decision.
- If you’re going to start investing in anything, you should know that experts believe crypto investments should not constitute more than 5% of your entire investment portfolio. This is primarily due to their extreme volatility.
Now that that’s done, which of the two is more valuable at the moment? Is Bitcoin Cash a good investment, or is Bitcoin better?
Out of the thousands of cryptocurrencies on the market, only a hundred or so are really worth considering. Most of the others have little value and represent highly uncertain investments.
Experts concur; they usually recommend that if you’re going to start investing in crypto, you should stick to the best-known coins, like Bitcoin and Ethereum. Some would advise you to avoid other altcoins, including Bitcoin Cash.
Naturally, this isn’t gospel, and if you really like and believe in BCH, you should consider it. As you’ve seen, it has plenty of potential. But you still need to be careful, and you should only invest money you’re willing to lose.
Bitcoin vs Bitcoin Cash vs Bitcoin Gold — What Is Bitcoin Gold?
Just as Bitcoin Cash came out of Bitcoin through a hard fork, so did Bitcoin Gold. It was even made around the same as Bitcoin Cash – only a few months later.
The primary reason for Bitcoin Gold’s creation was the desire to restore Bitcoin’s decentralization. Bitcoin is already decentralized, as we all know, so this doesn’t really make sense to most crypto fans.
The idea of the developers who created Bitcoin Gold was that Bitcoin’s mining process wasn’t fair to everyone. Due to the way the system works, large mining operations have a huge advantage, so the thinking behind Bitcoin Gold was to adopt a new algorithm that would fix this.
In essence, the new mining system in Bitcoin Gold doesn’t allow for expensive, specialized mining rigs to mine more Bitcoin. They do the same work they always do, but they don’t mine the coins faster like they do with regular Bitcoin.
As for the Bitcoin Gold vs Bitcoin Cash situation, there’s not much to say.
Their underlying algorithms also differ. The main thing that separates Bitcoin Cash from Bitcoin also separates it from Bitcoin Gold: the block size. As we’ve already discussed, Bitcoin Gold and Bitcoin have the same block size, while Bitcoin Cash has a much larger one.
Is Bitcoin Cash the same as Bitcoin?
No, it isn’t, at least not in the literal sense. The two coins share many similarities, especially where the underlying technology is concerned. However, they are still two different cryptocurrencies, as Bitcoin Cash was split from Bitcoin through a hard fork.
The main difference now is the block size. BCH has a much larger block size, allowing it to process more transactions in a single block. This leads to higher speeds and more transactions per second across the whole network.
Is Bitcoin Cash the real Bitcoin?
No. Bitcoin Cash was made through a hard fork, which means it got separated from the Bitcoin network and became a new cryptocurrency. Bitcoin stayed the same in this process, and it thus remained the only “real” Bitcoin.
If Bitcoin Cash had come into being through a soft fork, both cryptos would have remained on the same network, but the new one would have replaced the old as the default version.
People tend to confuse these two processes, so some are not sure how closely related Bitcoin Cash is to the original Bitcoin.
Why is Bitcoin Cash not as popular?
There are probably many reasons for this, but the main one is certainly the fact that Bitcoin is the oldest, most widely recognized, and most trusted cryptocurrency in the world. It still dominates the crypto market, and its market cap constitutes around 40% of the entire crypto world.
The fact that Bitcoin Cash shares a name with the king of crypto and that it was developed via a BTC hard fork is likely why it will keep living in Bitcoin’s shadow.
On top of that, BCH doesn’t offer anything quite revolutionary enough to encourage more people to use it, and that’s certainly necessary for the coin to gain more prominence.
Should you buy Bitcoin Cash?
As is always the case with cryptocurrencies, this is not an easy question to answer, and it’s something you should decide on your own. We’re not qualified to give you financial advice, which is why you have to be the one to determine whether BCH is the right choice for you.
Some people believe that BCH is a good investment, as it has been on the market for several years without faltering. The coin’s price is currently much lower than its highs in 2017, but BCH is still in the top 30 cryptocurrencies globally, and its price could rise quickly in the near future.
Like all cryptos, it could prove to be a good investment, or it could turn out to be a disaster.
Is Bitcoin or Bitcoin Cash better?
When it comes to the technical side of things, Bitcoin Cash has an advantage simply because it features a larger block size.
This effectively accelerates the whole transaction verification process, which means transactions are processed much faster than the average transaction on the Bitcoin network. In simpler terms, BCH is much faster to buy, sell, and trade than BTC.
Furthermore, Bitcoin Cash is more scalable and can handle more transactions per minute. Bitcoin is notoriously laggy in this sense, which is why waiting times keep getting longer as the network grows and the number of users rises.
On top of that, as we’ve explained more thoroughly in our BTC vs Bitcoin Cash guide, Bitcoin’s fees are much higher than those on the BCH network.
However, the faster transaction speeds and bigger block size also mean that BCH’s security could potentially be compromised. Bitcoin is better in this regard.
If we had to settle the Bitcoin vs Bitcoin Cash debate one way or another, we’d have to go with BTC, despite the technical advancements BCH has made. Why? Because at the end of the day, we think Bitcoin’s popularity and huge user base is more valuable than Bitcoin Cash’s innovations.