Bitcoin and Bitcoin Cash are two different cryptocurrencies that function independently and have technological differences, but you might not know that from the names or even their token symbols of BTC and BCH, respectively. Bitcoin, the oldest cryptocurrency and the largest by market capitalisation, was launched in 2009. Bitcoin Cash was forked from Bitcoin in 2017 and has grown and developed into an asset in its own right. But how did this come about?
When Satoshi Nakamoto, the anonymous person or persons behind Bitcoin, authored its white paper, the vision was to have a peer-to-peer version of electronic cash that allows online payments that one party could send to another without going through a financial institution. Twelve years later, that vision has transformed into what is a behemoth of a digital token now, defining the cryptocurrency market. Bitcoin price in India stood at Rs. 35.15 lakhs as of 2pm IST on August 18.
Besides the usual concerns about the uncertainty and volatility of any cryptocurrency, there was one issue about the pace at which these transactions are processed. The reason is that the Bitcoin transactions are first processed, followed by verification, which is then recorded in a digital ledger known as blockchain.
Now, his, it turns out, is a pretty lengthy and time-consuming process. Sample this. Visa, a global leader in the credit card business, processes about 1,700 transactions every second as compared to Bitcoin's only seven.
As more and more people join Bitcoin, expanding its network, it's getting slower as well. With time as Bitcoin grew in size, it became an instrument of investment instead of its original purpose of being a currency. And that's why what the industry experts call a “fork” occurred in August 2017.
Bitcoin Cash, therefore, besides sharing many attributes with Bitcoin and also integrated various changes, making it different and also closer to the vision document originally authored in 2008.
The most important distinction between the two is that these, despite being similar sounding, are two completely different currencies. Let's delve further.
For many of us, the first question will be the value of each as an investment. At the time of writing, the Bitcoin price in India is over Rs. 35 lakh, while Bitcoin Cash price in India was over Rs. 50,000. Of course, as an investor, the price of the tokens is not as important as whether or not they appreciate in value, so that's not the only thing you need to know.
Among the other major differences, the first and the foremost is that Bitcoin Cash, as compared to Bitcoin, has a lower transaction cost and transfers data quickly. So, Bitcoin Cash can be used by more people at the same time. Having said that, it's important to note that Bitcoin Cash, at least for now, doesn't enjoy as much consumer trust as Bitcoin.
The maximum block size of Bitcoin Cash is 32MB compared to Bitcoin's 1MB. This makes it more scalable, and able to carry out more transactions per second, reducing its environmental impact, and increasing its viability as a currency, in theory. On its website, Bitcoin Cash claims that it has the capacity to process as many as 200 transactions per second, thereby also reducing the cost of transactions.