Bitcoin and Bitcoin Cash : A Clash of Two Titans
Bitcoin cash is not a paper version of the famous digital currency. These two assets share many similarities, they are now separated due to differences of opinion within the community. Look at the collision
Both cryptocurrencies aim to become digital currencies for the exchange of value around the world. Both have the same mining algorithm i.e. proof of work protocol, the same reward system and the same ambition (to facilitate peer-to-peer transactions). Even in terms of units in circulation, the maximum number of tokens in BCH is 21 million, and a block is mined every 10 minutes, just like a "genuine" bitcoin. You may be wondering why Bitcoin Cash exists. It all started when the gradual adoption of Bitcoin caused network congestion in 2017:
This overload led to slow transaction execution (several hours) and a constant increase in fees. For example, in 2017, the average transaction fee peaked at over $50. This made the situation unacceptable for small transactions. Here is a graph showing the number of bitcoin transactions between 2016 and 2020.
The community needed to find solutions to solve this problem. Open source software does not belong to one person or organization, but to a global consensus. The community is made up of developers, miners, and users who can manage a "Bitcoin node". Simply put, a Bitcoin node is a point of entry into the network through hardware. It stores the blockchain in memory, in other words, it stores the history of transactions made on the network since its inception, and furthermore, it verifies and verifies the components of completed transactions. The interaction and connection between each node ensures the integrity and reliability of the system.
The majority of the community wanted to preserve the decentralized nature of Bitcoin at all costs. To do this, its advocates did not want blocks to increase in size because, in their opinion, this increase would jeopardize decentralization. Indeed, an increase in the size of blocks would lead to an increase in the weight of the blockchain. Let's take an example:
Bitcoin: 1 block = 1 MB
Bitcoin Cash: 1 block = 32 MB
Bitcoin: 100 blocks = 100 MB
Bitcoin Cash: 100 blocks = 3200 MB
Imagine that on a large scale, over several hundred thousand blocks, the weight of the blockchain would be disproportionately large, extremely heavy, and therefore no longer accessible to any type of computer (a copy of the Bitcoin blockchain is currently available to everyone for a few hundred GB). The solution was to improve the block chain by integrating the SegWit (Segregated Witness) protocol, which would restructure the information and make it more efficient so that more transactions are recorded in each block. This operation will offload the blockchain and thus lower transaction costs. First of all, this solution will keep the original size of 1 MB per block. In this way, the Bitcoin (BTC) community will retain its philosophy of resistance to censorship and centralization.
Another look at cryptocurrency
Meanwhile, the Bitcoin Cash community supports Satoshi Nakamoto's original plan to "scale" the blockchain (i.e. increase the block size). By increasing the block size, more transactions can be processed and aggregated. As we have seen, increasing the block size will make the blockchain heavier, which will no longer be available to everyone and therefore potentially centralized by specialized mining companies. They felt that the technology provided by Segwit would not be enough to solve the problems associated with slowness and transaction costs.
This community believed that widespread adoption of Bitcoin was more important than decentralization.
In the end, the two communities couldn't reach a consensus and decided to split with a hard fork (a code modification that splits in two and doesn't keep the blockchain backwards compatible). #Bitcoin Cash was born on August 1, 2017 in the 478,559th quarter . The BCH community is increasing the block size from 1MB to 8MB and then gradually to 32MB with a capacity target of 1TB per block. Today, Bitcoin Cash allows transactions to be carried out very quickly at an extremely low price (often below a penny), but suffers from bad press in the cryptosphere due to its centralization.
Currently, 1000 nodes make up the Bitcoin Cash network with an increasingly heavy block chain, thereby restricting its access more and more and thus favoring large mining infrastructures with computing power superior to the lambda miner... What, in terms of view of decentralization, is far from optimal. Indeed, mining enterprises with unclear intentions can join forces to form a stable coalition, holding more than 50% of the network and thus attack the rest of the network. This will lead to potential unconfirmed transactions, the possibility of canceling confirmed transactions, or the creation of a new chain by changing the code of old blocks ... Not very reassuring. For its part, the crypto queen has integrated the SegWit protocol and continues its development,
The current size of the Bitcoin network is 375 GB. Had the network opted for a scaling solution, in other words moving to 32MB per block from August 1, 2017, the network would weigh over 8TB today. Suffice it to say that it would be out of reach for everyone...
Price and performance
Bitcoin has been performing insanely well for years, despite being pushed to the extreme with volatility. Bitcoin's current capitalization ranges from $1,200 billion to $1,300 billion at the time of writing, with a price around $65,000.
As for Bitcoin Cash, it experienced a strong acceleration at first, raising its capitalization to over 60 billion at the end of 2017, and then plummeting during the 2018 bear market.
Since then, it has never reached its all-time highs, but with a capitalization of $12 billion, it currently boasts of holding its own in the top 20 in terms of market capitalization. The price is currently hovering around $680
The victory is definitely for BCH. While Bitcoin fees peaked over $60 in May 2021, fees for
Bitcoin fees
#bch reached $0.04 in the same period. However, these numbers need to be considered due to the much higher traffic on the crypto network. Now this is a technical-philosophical debate between two assets, one of which is primarily in favor of decentralization, and the other in favor of large-scale adoption. The “Taproot” update for Bitcoin is due this weekend to provide greater # privacy for transactions, but also and especially to optimize the use of # bitcoin ’s famous smart contracts . We should be able to see the broader development of these complex contracts, especially with respect to #DeFi(decentralized finance), which have gained particular popularity thanks to #Ethereum