This digital form of money has really broken into the mainstream recently, and bitcoin is the one that most will be familiar with in Australia. Bitcoin was first invented in 2009 by Satoshi Nakamoto and has grown rapidly since then to experience great global success.
It has grown steadily in value over time and has seen some great price hikes, including one particularly strong year in 2017. This has prompted many Australian investors to get involved with this digital form of money. Investing in crypto does not have to be hard or take lots of experience in trading currency – check out www.thebtcprofit.com if you want to find out more about trading bitcoin for profit.
One thing you should know first is that digital currency such as bitcoin is not controlled by any one government or financial institution. Instead, the people who mine and invest in it all have a say as a community on how it should operate. While this works well most of the time, it can sometimes lead to arguments! This happened in 2017 when some of the bitcoin community were not happy with how things were going. As their concerns were not addressed to their satisfaction, they decided to create their own version of bitcoin called bitcoin cash (BCH).
What are the differences between the two now that this has happened?
Perhaps the major difference between bitcoin and BCH lies in the block size that each has. This was one of the key decisions made after the hard fork of bitcoin in 2017 and also one of the major disagreements that actually triggered BCH being invented. In simple terms, BCH has a bigger block size at 8MB compared to the current bitcoin size of 2MB. When the hard fork occurred, the block size for bitcoin was only 1MB!
Why does this matter? The larger block size means that BCH processes transactions quicker on its network. This is preferred by some crypto enthusiasts as it brings down transaction fees and also means that they wait less time for transactions to be verified. You must remember though that bitcoin is still better for investing in due to the liquidity of the market.
Bitcoin is more popular and well-known
Another big difference is that bitcoin is far more popular and mainstream than BCH. Bitcoin is warmly accepted in Australia, for example, and this is also true around the rest of the planet. It is just a simple fact that most crypto traders around the world know about bitcoin and put their money into it. This cannot be said for BCH, which is still a relatively new coin.
To give an example of this, the market cap for the whole crypto market is around $300bn now, and bitcoin makes up a large majority of it. BCH simply cannot compete as yet in terms of popularity or market share. Whether this changes in the future as BCH gets more attention is open to debate, but this remains a big difference for now.
Bitcoin can be seen as more secure
Security is obviously important to all digital currency, and both coins are essentially safe to use. Many people would, however, point out that the different spec and blockchain network that BCH works also makes it less secure than bitcoin. A lot of the potential for issues in some people’s eyes lies around the increased BCH block size and faster processing speeds. Some fear that this leaves extra room for cyber-criminals to cause mischief or interfere with the BCH network. To be fair, BCH has admitted its own weaknesses in the past and made changes to its spec to help close gaps. This has included measures such as on-chain scalability and new transaction signatures.
Although specific issues were what led to BCH being created, the overriding issue that drove it all was scalability. Many involved with bitcoin who want to see it rolled out on a global scale as a proper alternative currency that people could use in normal life realised that this would actually be very tough to do. The smaller block size and slow transaction speeds that this caused simply made it hard to scale out in such a way. By making a new type of bitcoin that processes payments much quicker, the inventors of BCH hoped to solve this problem. This essentially confirms another difference between the two: bitcoin is not as scalable as BCH right now for daily use.
Bitcoin and BCH differ significantly
As they share very similar names, it is tempting to assume that these two cryptocurrencies are pretty similar in nature. However, the points we have looked at above show this not to be true at all and highlight some pretty big areas where they do not come together. In a way, this should not come as a surprise as the whole point of BCH being created was to do something different from what was happening in bitcoin at the time. Where it will all head in the future will be very interesting to see.