Crypto War: Bitcoin Vs Bitcoin Cash

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Crypto War: Bitcoin Vs Bitcoin Cash

Bitcoin and Bitcoin Cash are two of the primary cryptocurrencies available on most exchanges today. While you have almost certainly heard of Bitcoin, it might be possible that you haven’t heard about Bitcoin Cash, or don’t fully understand the purpose of this currency. By the end of this guide, you’ll know the differences between the two, how to get a hold of them, and why sometimes Bitcoin Cash is better than Bitcoin.

The Difference Between Bitcoin and Bitcoin Cash: An Overview

Satoshi Nakamoto’s vision led to the creation of Bitcoin; a digital currency and technology which would revolutionise the way we interact with one another. The trouble with the vision, according to some, was that it lacked a practical way to scale effectively.

Bitcoin and its transaction exist within a Blockchain, which allows the verification using a majority rule. While this system presents numerous benefits, it is also slow, especially when compared to traditional card payments. Visa’s infrastructure, for example, is able to process up to 24,000 transactions per second. Bitcoin’s network, on the other hand, is only able to handle seven per second.

On average, it takes around 10 minutes to process an individual Bitcoin transaction. Without a change in the underlying technology, it is unlikely that the cryptocurrency will achieve mainstream use, and members within the crypto community were quick to develop solutions. The two primary ones were to create transactions with less data, so verification could be faster, or design blocks to hold more data so that more transactions can be verified at a go.

A Brief Historical Background of Bitcoin

bitcoin cryptocurrency

In 2009, Bitcoin was created and became the first cryptocurrency in the world. Although it is well-known today, when it was first released Bitcoin has a very small following. The currency was created to replace existing alternatives, by offering a simpler, cheaper and decentralised way to make payments. By using Blockchain technology, the currency could not be falsified, nor could it be controlled by any central authority or group.

The Bitcoin Blockchain functions with the use of miners which verify transactions and add new blocks. Every time a new block is added to the system, those involved in creating it are rewarded with newly minted Bitcoins. Mining Bitcoin gets progressively harder, for smaller rewards, and there is a finite number of coins which can be ever created.

Bitcoin is today the most valuable cryptocurrency, with a total market cap of over $167 billion. You can use it to buy goods and services online, trade or HODL. While this currency continues to dominate the industry, it might not do so for very much longer, due to Bitcoin Cash.

A Fork

Throughout its existence, Bitcoin has experienced several different forks, yet none has been as significant as the Bitcoin Cash fork. A fork takes place when the original code of a Blockchain is updated. While some machines continue to update the original chain, others split and begin updating the updated one. Forks are commonplace in the cryptocurrency industry, with another major fork involving Ethereum Classic and Ethereum.

As a result of this fork, Bitcoin’s Blockchain was updated and named Bitcoin Cash. Users who at the time of the fork owned Bitcoin got compensated with an equal value of Bitcoin Cash.

A Brief Historical Background of Bitcoin Cash

Following the Bitcoin Cash fork, machines which updated to the new Blockchain began mining a new cryptocurrency. Bitcoin Cash (BCH) was founded in 2017, following disagreements within the Bitcoin community about changes which were required to progress the cryptocurrency project further. This led a small group to create the fork, allowing them to use the basis of Bitcoin while making some modifications.

Bitcoin vs. Bitcoin Cash: A Price War

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Following the fork which gave rise to the new cryptocurrency, a price war ensued and continues to this day. Bitcoin vs Bitcoin Cash is played out every day, across cryptocurrency exchanges, news broadcasts, and online forums. As either cryptocurrency becomes more popular, its value is likely to increase. Bitcoin is currently significantly ahead of its rival, but this could change as more users start to find out about Bitcoin Cash.

The additional features brought about by the Bitcoin Cash fork put the cryptocurrency ahead for scalability. Unless the Bitcoin community is able to come together and agree on necessary updates, there is the real possibility that Bitcoin Cash surpasses Bitcoin’s value in the near future. Today, Bitcoin Cash ranks in 4th place, with a total market cap of over $5 billion. Although still far from Bitcoin’s market cap, you need to keep in mind that the currency is only two years old.

To newcomers, Bitcoin Cash might appear like a secondary, cheaper form of Bitcoin. Due to their similar name, the younger cryptocurrency might be losing substantial investment due to this incorrect impression. To make matters worse, there were some instances were other currencies with similar names have been created and were discovered to be scams.

A Closer Look at Their Different Features

Both Bitcoin and Bitcoin Cash offer users several features which make them unique or unlike many other cryptocurrencies. When deciding whether to invest in one or the other, you should consider both the pros and cons of each currency.

Bitcoin Pros

The best way to highlight the features of one cryptocurrency is to pit it against another. Therefore, the pros listed here are Bitcoin’s advantages over Bitcoin Cash and are not necessarily applicable when comparing it to other currencies.

Bitcoin is the industry’s base currency and is available in the biggest majority of exchanges and trading platforms. Apart from being the most popular cryptocurrency, Bitcoin is part of the highest number of trading pairs. Its dominance over other currencies means that most novice traders and users will learn about this currency first, over any other, including Bitcoin Cash. This brand recognition is a significant pro since it means that almost all initial trades involve buying Bitcoin with cash.

Bitcoin Cons

Understandably, the most important con for Bitcoin when compared to Bitcoin Cash refers to its scalability. The first cryptocurrency is older and slower than its rival, and each transaction costs more to verify. Unless a significant change is done to Bitcoin’s Blockchain, it is possible that the currency will lose its dominance in the next few years. 

The Bitcoin Cash fork has also shown that the Bitcoin core development team is not unified. This lack of clear leadership allows disagreements to grow unabated, leaving the potential for numerous future forks. It is also close to impossible to get the team united and working towards developing one, coherent and effective upgrade.

Bitcoin Cash Pros

The primary pro for using Bitcoin Cash is the very reason behind its creation – scalability. Transactions with Bitcoin Cash’s Blockchain are cheaper to carry out and substantially faster. This allows the cryptocurrency to be more scalable and able to attract a larger portion of cryptocurrency users.

Unlike Bitcoin, Bitcoin Cash’s core development team are united in the goal of making the currency scalable and able to meet the challenges of the future. This has allowed it to constantly increase its market share, which also makes the coin an ideal investment and a way to hedge against Bitcoin.

Bitcoin Cash Cons

As yet, Bitcoin Cash lacks the brand awareness and investor confidence which Bitcoin enjoys. Although it ranks just three places below Bitcoin, it has a substantially smaller market cap, while its value is only around 3.2% that of its rival. This value difference is significant, especially to miners who need to quantify the feasibility of mining one cryptocurrency instead of another.

Since Bitcoin Cash is not very well known, it is also more difficult to find a trading platform or cryptocurrency exchange which accepts it. 

Where Can You Buy Bitcoin and Bitcoin Cash?

Coinbase

If you are looking to buy either Bitcoin or Bitcoin Cash, one of the best options for you is Coinbase. The American exchange allows you to buy either of these currencies using EUR or USD and several payment methods, including cards and bank transfers. By using Coinbase, you can feel safe knowing that your funds are insured against theft. Moreover, you can access Coinbase Pro, which is a trading platform specially designed for experienced traders looking for advanced charting tools, lower fees, and other features.

eToro

Screenshots are shown for illustration purposes only. Actual product may vary.

Traders looking to benefit from the price volatility of both Bitcoin and Bitcoin Cash need not purchase and store the cryptocurrency. Alternative financial instruments, such as Contracts for Difference, are not available for digital currencies. These can be purchased using the popular global trading platform, eToro. Offering no commission fees and an incredible list of payment methods, eToro offers you a straightforward way to invest in Bitcoin and Bitcoin Cash without needing to worry where to securely store your cryptocurrency.

75% of retail investor accounts lose money when trading CFDs with this provider

Binance

If you already own a cryptocurrency and are looking to trade it for either Bitcoin or Bitcoin Cash, Binance is probably the best exchange for you. Supporting over 450 different cryptocurrencies and other tokens, Binance offers a fast and convenient way to trade crypto-to-crypto. Although the platform has recently introduced card payments, it remains known across the world for offering some of the lowest crypto-to-crypto fees.

Bitcoin vs. Bitcoin Cash: Concluding Thoughts

While in many ways Bitcoin and Bitcoin Cash are rivals, they are both part of a greater cryptocurrency ecosystem, which retains Satoshi’s goal of revolutionising the way we interact with each other. As the gold standard of cryptocurrencies, Bitcoin attracts thousands of new traders to the industry every day, and it is likely thanks to this that Bitcoin Cash and other currencies are able to develop so quickly.

Technology is evolving faster than anyone could have ever imagined. In order to survive and thrive, cryptocurrencies need to be able to evolve and adapt, and at the moment, Bitcoin Cash appears to be beating Bitcoin in this respect. It is hard to say what the future might bring in the Bitcoin vs Bitcoin Cash debate, but it is even harder to imagine a world where Bitcoin becomes insignificant.

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