Trying to get in on the Bitcoin craze? This is one of the biggest fads taking on the world at this stage. Here are some of the key points that will help you distinguish between the two most popularly traded cryptocurrencies: Bitcoin and Bitcoin Cash.
So, What’s The Difference Between The Two?
There are many differences that come up between the two cryptocurrencies, but there is one difference that stands out more than the rest.
The main difference between the two cryptocurrency options in the Bitcoin vs. Bitcoin Cash debate is that one can be
used more as a free flow of cash. Bitcoin is seen more as a traditional long-term investment.
Bitcoin is the original cryptocurrency, since it came before any of the other cryptocurrencies. On the other hand, Bitcoin Cash split away from Bitcoin and was formed as a good currency alternative.
An Advantage Over Bitcoin
In the Bitcoin vs Bitcoin Cash debate, while Bitcoin Cash is more transferable than Bitcoin, the newer cryptocurrency also has a good chance of appreciating in a similar way to Bitcoin.
However, Bitcoin is still the better long term asset based on the market statistics that matter like trading volume and inherent value.
The Problem with Bitcoin Is Scaling?
Have you ever considered how slow Bitcoin can be to transfer in and out of your digital wallet?
The main issue with Bitcoin as a currency is that the transaction time is extremely slow. No one wants to wait ages to get a single deposit into a digital wallet. Bitcoin’s long transaction times were a large part of the reason to spin up Bitcoin Cash.
More On Bitcoin’s Scaling Issue
In Bitcoin vs Bitcoin Cash, Bitcoin is one of the slowest cryptocurrencies to send and receive. This is mainly due to the huge burden on processing power and information management taking place at the backend.
The entire blockchain needs to be updated in order to process a simple transaction. Each individual block needs to work in sync, and so every time a single block is changed then the whole blockchain is altered too.
The sheer size of the Bitcoin network means that the processing power and information involved are extremely burdensome on any system.
How Slow Bitcoin Can Really Be?
This massively traded cryptocurrency can be really slow. Bitcoin can take up to several minutes to receive or send on the decentralized network.
It is also important to note that transactions can take several minutes without any concerns or setbacks during the transaction. In fact, Bitcoin transactions from point A to point B may take up to 10 minutes, and that is if you are lucky.
Here Is How Bitcoin Compares
For example, Visa cards, whether credit or debit, can process about 150 million transactions per day and at a rate that goes upward of 24,000 transactions per second. This is way faster than Bitcoin on any scale.
However, Bitcoin on the other hand struggles to achieve seven transactions in a second. The time it takes to add new transactions to the Bitcoin blockchain could be well above 10 minutes.
Here Is How Bitcoin Cash Compares
In the Bitcoin vs Bitcoin Cash debate, while Bitcoin Cash is still quite a bit slower than Visa card transactions, at least the cryptocurrency has become efficient enough that a significant community of people are using it as free-flowing money.
The newer digital tokens are being used in many places of business. Bitcoin Cash can manage to transfer tokens to and from an account in less than half the time it takes Bitcoin to do so.
The Networks Are Going to Get Bigger
The transacting time of both these cryptocurrency options is only going to get worse as more people start using the decentralized network. The processing time slows due to the blockchain getting larger with each individual block.
The larger each block gets, the more effort it takes to process a transaction.
Bitcoin Cash has effectively countered the larger issue of slowing transactions by resizing the blockchain’s blocks and the amount of information that can be stored in each block.
While both cryptocurrencies have improved their scalability and transaction speeds, Bitcoin continues to remain a slow moving cryptocurrency despite the updates.
Where Are These Cryptocurrencies Headed?
In the Bitcoin vs Bitcoin Cash debate, both cryptocurrency networks are growing as more blockchain enthusiasts are buying tokens and mining the blockchain. These enthusiasts are operating in both cryptocurrency spheres.
As the decentralized network grows, the more difficult it will get to process the information in each new block in the blockchain. Despite both cryptocurrencies resizing their blocks to account for the rapid growth of information and users on their networks, there is still a finite point on information storage before the network starts to slow down again.
Each new Bitcoin token that is traded is either added or changed in the blockchain, which needs to go through a process where the entire chain is impacted.
A block cannot be added to the blockchain without meeting specifications that hold the entire Bitcoin chain together. This means that the entire chain of blocks is analyzed before a change is made to any of the blocks, including a simple transaction. This takes an incredible amount of processing power.
Bitcoin Cash Is Introduced as An Alternative
The new cryptocurrency started from a technology update to the Bitcoin blockchain. An update in the form of Segregated Witness, usually referred to as SegWit2x, which aimed to make the amount of data in each block smaller to improve transacting time for Bitcoin.
This update accomplished that task through removing signature data from each of the blocks of data that needed to be processed with each transaction. However, signature data accounts for a significant portion of the data in a block.
To paint a picture, signature data associated with blocks takes up to around 65% of the data in a block. Removing signature data improves blockchain transaction time and functionality significantly. However, the drawback is to compromise on the blockchain’s security.
The Main Fork in The Road
The popular Bitcoin Cash was developed through a sub-group of miners and developers who were all cryptocurrency enthusiasts. The belief was that SegWit2x did not address the scalability problem effectively.
Another reason to spin off from Bitcoin was because many of the miners believed that the update would have shifted focus from the original development roadmap for cryptocurrencies.
Quite a few of the original Bitcoin miners and developers believed the SegWit2x update did not follow the roadmap initially outlined by Satoshi Nakamoto, who was the founder of blockchain and Bitcoin. In fact, the update removed a key piece of his blockchain schema.
The Divide Led To Two Cryptocurrencies
The two factions separated into two different Bitcoin groups. The first group focused on the Bitcoin update as the move forward while the other group sought a different approach to the scalability problem. However, both cryptocurrencies aimed to address the buildup of information and users on the blockchain networks.
The development could lead cryptocurrencies in a number of directions, one path is to allow the digital tokens to be used more freely as a source of income and real currency. Bitcoin will continue to have a strong security structure, but whether it will be able to improve its transacting time is still unclear.
On the other hand, Bitcoin Cash has quite the reverse problem. In fact, the digital token’s transacting time makes it a highly effective medium of exchange. However, the security behind the newer cryptocurrency is still unclear.
There may continue to be a significant divide between these two currencies moving forward with new developments and updates.
Looking Forward At New Cryptocurrency Uses
A lot of the future of Bitcoin and Bitcoin Cash will depend on the vision that miners and blockchain users will have moving forward. If Bitcoin cannot provide the day-to-day application of the digital token to conduct transactions then people will look to another alternative, perhaps Bitcoin Cash.
The same goes for Bitcoin Cash when it comes to security concerns. If the newer cryptocurrency does not address the fundamental issues of its divide from Bitcoin then blockchain enthusiasts are likely going to look into more stable options.