Bitcoin (BTC) was created by a mysterious figure, Satoshi Nakamoto. Since then, the world’s first crypto asset has undergone multiple updates and forks more than 100 times. One of them that is quite flashy is Bitcoin Cash (BCH).
Most Bitcoin forks go out of business in a matter of months, but Bitcoin Cash (BCH) managed to buck that trend and is ranked as the most successful Bitcoin fork. Although similar in some ways, there are ideological and technical differences between BTC and BCH.
From the outset, it was discovered that the Bitcoin blockchain network was not capable of handling the number of transactions per second that could rival a centralized payment system like Visa. This issue was especially pressing in 2017, when the number of transactions skyrocketed and Bitcoin transaction fees swelled.
To address this issue, a number of off-chain scalability solutions were developed. But Bitcoin ABC, led by developer Amaury Sechet, created an on-chain scalability solution by creating a Bitcoin fork in August 2017. This fork came after the launch of Segregated Witness (SegWit) on Bitcoin that managed to reduce Bitcoin transaction size.
The fork generates a crypto asset called Bitcoin Cash, based on the original Bitcoin code without SegWit and a maximum block size of 8 MB. This maximum size is the main technical difference between Bitcoin and Bitcoin Cash.
Bitcoin block size is limited to 1 MB, while Bitcoin Cash now has a maximum block size of 32 MB. This change increases the number of transactions that can be stored in one block and the speed of the Bitcoin Cash network.
Bitcoin Cash’s block interval is 10 minutes on average, just like Bitcoin. This means transactions are confirmed at the same speed on both networks, but Bitcoin Cash can store more transactions per block. Because of this, the Bitcoin Cash network is able to process 100 transactions per second compared to Bitcoin which only has 14 transactions per second.
Bitcoin Cash has a larger block, but transactions are less frequent than Bitcoin so the transaction fees are less expensive. Currently, the average Bitcoin Cash transaction fee is around US$0.005, while Bitcoin is US$2.07.
In addition to a larger block size, Bitcoin Cash has a number of additional functions called opcodes.
In 2018, several opcodes that were extinguished in Bitcoin were rekindled on the Bitcoin chain
Cash along with some new opcodes. This difference gives Bitcoin Cash the smart contract functionality.
Bitcoin Cash can be considered more centralized than Bitcoin. Currently, a quarter of Bitcoin Cash’s hash rate (computing power) is held by one mining pool, and the top three groups account for 55 percent of the hash rate.
On Bitcoin, the largest group holds 17.7 percent of the hash rate, and the top three groups control 47 percent.
Overall, Bitcoin and Bitcoin Cash are similar in terms of ambition and purpose. Although Bitcoin Cash offers a faster technology, Bitcoin is more widely adopted by society.