Bitcoin Cash Explained - Bitcoin vs. Bitcoin Cash - The Differences
On the 1st of August 2017 the Bitcoin blockchain split (forked) into two:
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
Anyone holding Bitcoin on this date received the same number of Bitcoin Cash.
If you had 1 Bitcoin, you were given 1 Bitcoin Cash. Who doesn't like free money?
But why did this happen?
Why Did Bitcoin Fork?
Bitcoin has a block size of 1MB and a new block is created roughly every 10 minutes.
When the Bitcoin network is busy and a lot of transactions are being broadcast to the network, there's not enough space for everyone's transactions to go through.
When blocks are full, transaction fees begin to rise. This creates a bidding war between users and miners. Miners make a load of a money while the users suffer.
- Pay a high fee - transaction goes through quicker
- Pay a low fee - transaction takes longer to go through
A system like this favors people who want to treat Bitcoin as a digital investment (HODL!)
But for users who want to use it as a payment currency, they're stuck with high fees when the network is busy.
The community was torn in two and multiple solutions were suggested. Bitcoin Unlimited and SegWit2x stood out the most.
Bitcoin Unlimited proposed a flexible block size, but it didn't catch on.
SegWit2x proposed optimizing the code so less data had to be stored. Three months after activation, the block size would increase to 2MB.
This gained more traction than Bitcoin Unlimited, but it still failed.
So on the 1st of August 2017, Bitcoin Cash was born with a block size of 8MB (now 32MB) and the war began...
Bitcoin vs. Bitcoin Cash
This is a heated topic packed with memes, drama, twists & turns, and smart discussions.
But don't get sucked into the Bitcoin vs. Bitcoin Cash bullshit. There is no war. It's Bitcoin & Bitcoin Cash.
The sooner we get out of the us vs. them mindset and start helping each other, the better.
This is what cryptocurrencies and the whole movement is about - helping the world and helping each other. Debating will always be healthy, but when it turns to fighting we make no progress.
Bitcoin is acting as a digital store of value (digital gold) where Bitcoin Cash is acting as a peer-to-peer payment system.
Let the best technology win.
Bitcoin wants to keep the block size at 1MB so people from third world countries can still access it.
The more storage required to run the network, the less accessible it is to people.
You can't just keep increasing the block size to make all the problems go away either.
Eventually increasing the block size won't work. There are too many people on Earth and too many transactions will be made.
For global adoption and usage a new solution needs to be found.
Bitcoin is trying to tackle this by developing the Lightning Network.
Bitcoin Cash increased the block size to 8MB (now 32MB) which allows more transactions per block.
Bitcoin Cash also introduced a dynamic mining algorithm which would change the difficulty as needed. This prevents unpredictable block times.
What a lot of people are upset about is Bitcoin Cash is claiming to be the real Bitcoin.
This is dangerous and confusing for new users - this space is already too complicated as it is. People have lost money by mixing up Bitcoin and Bitcoin Cash addresses.
If a new adopter goes to bitcoin.com they assume it's all about bitcoin... But it's about Bitcoin Cash. It's just not ideal is it?
Reddit is baffling. The /r/bitcoin subreddit is about Bitcoin and the /r/btc subreddit is about Bitcoin Cash. But the ticker for Bitcoin Cash is BCH...
The /r/bitcoin subreddit moderators heavily censored anything they didn't agree with... So anything to do with Bitcoin Cash was deleted and the users were banned
The whole thing is a shit show. But if you look for the intelligent discussions you can find them.
At the end of the day, both cryptocurrencies are doing what they think is right and they're trying to change the world by improving the financial industry and making it more accessible.
The more people trying to create a global economy that runs on cryptocurrency the better.
What's your opinion on it all?
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Thank you for reading, have a magnificent week. Peace! <3