Bitcoin and Bitcoin Cash got created by two different groups of people. While the two cryptocurrencies share some similarities, they also have significant differences.
Bitcoin got developed by a group that included Satoshi Nakamoto, who published the original paper on Bitcoin in 2008. Bitcoin is a peer-to-peer payment system that allows individuals to send payments directly to each other without going through a third party like PayPal or Western Union (a money services company). The transfer can happen instantly between users anywhere in the world at no cost.
Bitcoin Cash was created as an alternative version of Bitcoin when a group within the community split off to form their version of this cryptocurrency that would allow more transactions per second than BTC currently does (there will be more on this later).
Cryptocurrency Deep Dive
The distinctions between Bitcoin and Bitcoin Cash will get discussed in this post. We’ll go through how they’re alike and different, how they were made, what they get used for, who uses them, and why.
The first thing is to understand that there are two types of cryptocurrencies:
- Those that have their blockchain (think Ethereum)
- Those that use another cryptocurrency’s blockchain (like Litecoin)
In this post, we’re only talking about coins that are forks of Bitcoin’s blockchain because it’s easier to understand them as separate entities without having to explain them every time.
Understanding the historic cryptocurrency prices will help take a better call when entering the cryptocurrency markets. You can create cryptocurrency value by taking informed decisions regarding your investment folio.
How Is Bitcoin Cash Different Than Bitcoin?
Bitcoin Cash is a hard fork of Bitcoin that got created during the 2017 cryptocurrency bubble. The main difference between Bitcoin and Bitcoin Cash is that Bitcoin Cash has a larger block size limit and had an identical blockchain at the time of the fork.
On August 1, 2017, Bitcoin Cash was created as a result of a hard fork. Many factors led to this decision by the miners but I’m going to focus on two:
- A large amount of transactions per block (1 MB) creates issues with scalability and fees for users transacting on the network.
- Segregated Witness (SegWit) technology allows for more transactions per block without increasing the block size.
Main Differentiation Points
There are a few main differences between these two cryptocurrencies.
Bitcoin Cash is much faster than Bitcoin, making it easier to use in everyday transactions. It also costs less than Bitcoin, so it’s cheaper to use and buy.
The block sizes of both cryptocurrencies are different as well:
- The block size for Bitcoin is 1MB.
- The block size for Bitcoin Cash is 32MB.
This means more transactions can fit into each block on the blockchain of Bitcoin Cash than on that of Bitcoin. However, it also means that new blocks take longer to form on the blockchain of Bitcoin Cash than they do on that of Bitcoin (which has a shorter confirmation time).
Both cryptocurrencies have a replay and wipeout protection—a way for users to protect themselves from accidental payments being made twice due to forks or hard forks (when an upgrade happens).
Replay protection lets you send your coins to two different addresses by making sure only one transaction gets through at a time; wipeout protection prevents you from mistakenly sending money during a fork or hard fork before it happens by preventing any transactions from going through until after things settle down again.
Which One Should I Invest In?
As a beginner, you may be wondering which of these cryptocurrencies you should invest in. The answer is that it depends on your risk appetite and personal goals.
If you’re looking for an investment with a potentially high return that’s still within reach, Bitcoin Cash might be the right choice for you.
The value of Bitcoin Cash has risen dramatically since its launch in 2017 and got expected to continue increasing over time. However, this increase can also lead to volatility. This means there’s a chance your investment could decrease or even lose value overnight if there are sudden changes in the market or within the currency itself.
For example, On December 18th, 2018 (a date known as “Black Friday“), Bitcoin cash reached an all-time high of USD 4,200 per coin. Before dropping down below USD 2,000 just a few days later. That happened due to market fluctuations caused by investors selling their assets after making quick profits during this period (this type of behavior happens often during periods when people feel like they’ve missed out).
This makes investing in cryptocurrency risky because it’s not always clear whether prices will continue trending upward or downward over time.
Thoughts on Future Cryptocurrency Split-Offs
If you’re looking for a new opportunity to invest in crypto or are simply interested in the space, it’s worth keeping an eye on any potential future split-offs.
Bitcoin has proven itself as a powerful investment vehicle, but it’s not without its flaws. It’s possible that another coin comes along with better technology and offers more value than Bitcoin. But it would have to be able to compete with Bitcoin Cash’s speed and lower transaction fees.
New currencies will inevitably rise and challenge the status quo. So if you want to invest wisely rather than ride trends, make sure you’re aware of what each coin is trying to do. Then choose wisely based on your needs. Whether or not these coins end up splitting off from one another remains unclear. However, one thing is certain, the future holds many exciting possibilities in this fast-paced space!
Exciting Uses for Cryptocurrencies
A cryptocurrency is a form of digital money, stored on a blockchain. This means that it got decentralized and not controlled by any bank or government. The technology behind cryptocurrencies gets often referred to as “blockchain.”
Blockchains are very simple in principle: they have distributed ledgers, spread across several computers around the world (also known as nodes), which keep track of transactions between users on the network.
Cryptographic hashes (an extremely secure digital signature) ensure that nobody can spend their crypto twice or forge transactions. This also prevents fraud in which someone might try to spend someone else’s currency without their knowledge. That would be called double-spending.