The two believers are always arguing fiercely about which bitcoin is the real bitcoin and which is the better bitcoin.The main differences and similarities between the two mainstream cryptocurrencies.
Bitcoin
Bitcoin is a cryptocurrency, which is encrypted through encryption technology. Bitcoin is decentralized because cryptocurrencies are not issued and managed by a central entity (such as a central bank), but are agreed by a large number of Bitcoin network users. So there is a consensus mechanism called Proof of Work (PoW).
Bitcoin is a deflationary currency with a maximum circulation of only 21 million coins. In order to attract enough participants ("miners") to use their computing power to support the network, miners can get Bitcoin rewards by virtue of their computing power.
Bitcoin Cash
Bitcoin Cash is a hard fork of the original Bitcoin blockchain. The history of Bitcoin Cash began in August 2017, when a group of influential Bitcoin miners were dissatisfied with certain aspects of classic Bitcoin (BTC). In particular, the crypto craze that started at that time led to the transaction time of the Bitcoin network being too long, and the transaction cost was very high, so the miners decided to leave the Bitcoin network.
Bitcoin can only process 7 transactions per second, and the transaction time is about 10 minutes. To solve this problem, there are only two possible solutions: either reduce the amount of data to be verified per block, which will make the transaction creation faster and lower cost; or increase the size of the data block to handle more data at the same time.
To this end, the SegWit2x update for Bitcoin was implemented in mid-2017. Almost 80% of Bitcoin miners and mining pools expressed support. But this contradicts the plan originally proposed by Satoshi Nakamoto, and there is a lot of confusion about how SegWit2x continues to develop.
Through the hard fork in August 2017, a new cryptocurrency, Bitcoin Cash, was born. Bitcoin Cash has increased the block size. It is no longer 2MB of Bitcoin, but 32MB of Bitcoin Cash. In addition, the Bitcoin Cash protocol is configured with a flexible hashing difficulty, allowing it to adapt to the number of miners in the network. But if the encryption difficulty is too low, this will also reduce the security of the protocol.
Bitcoin Cash transaction time is 16 times faster than BTC. Therefore, using Bitcoin Cash, a transaction only takes about 1 minutes and 30 seconds. This also facilitates the adoption of the currency, because in particular merchants are more eager to shorten the transaction time.
Consensus mechanism between Bitcoin and Bitcoin Cash
The consensus mechanism of cryptocurrency describes the decentralized decision-making method in the public chain network. Since all participants must reach consensus, it is called a consensus process.
The consensus mechanism of Bitcoin Cash and Bitcoin Cash is the same, because Bitcoin Cash is derived from Bitcoin.
Blockchain Bitcoin consensus mechanism
Both Bitcoin and Bitcoin Cash use the PoW consensus mechanism. Any computer participating in the Bitcoin network can participate in creating blocks or hashes. However, only nodes that create verified hashes can receive BTC or BCH rewards based on their computing power. The problem with the PoW mechanism is that it consumes a lot of computing power, and all participating computers need to invest a lot of energy to create a hash. Most nodes must reach a consensus on a valid transaction before they can be chained.
Technical details of Bitcoin and Bitcoin Cash
Both Bitcoin and Bitcoin Cash use the same hashing algorithm. This is the proven SHA-256 algorithm, which was originally developed by NSA to sign transaction data and generate a fixed-size hash value of 256 bits.
However, Bitcoin Cash uses a technology called "Emergency Difficulty Adjustment (EDA)" to dynamically adjust the difficulty of encryption based on the number of active miners in the network. In this way, the hash calculation should always continue, and the stability of the blockchain operation should be ensured.
Bitcoin and Bitcoin Cash
Both Bitcoin and Bitcoin Cash claim to be used as digital currencies for the purchase of goods and services, and as a powerful alternative to fiat currency.Let us wait and see which payment network will eventually attract the largest or most merchants and outlets.
However, due to the long-term influence of Bitcoin and its dominant market position, Bitcoin must be ahead of its currency of the same name in this respect. Another important function of Bitcoin is value storage. In fact, it is "digital gold". When the market is turbulent or the stock price drops to a certain level, crypto enthusiasts will go to bitcoin, and bitcoin cash cannot yet serve as a means of value storage. But bitcoin cash lovers will naturally prefer BCH as a value store rather than BTC.
In addition to technical differences, the reason why the two cannot stop the conflict is an ideological debate about the true will of Bitcoin inventor Satoshi Nakamoto. However, when considering which cryptocurrency to invest in, it is important to distinguish between Bitcoin and Bitcoin Cash. If you want to know which currency is the better investment choice, I can only say that it all depends on you!
If you are buying cryptocurrencies for the first time, you should first ask yourself some important questions. Ask yourself why you should invest in cryptocurrencies, what do you want to do with them, and what are your goals. Also, think about the degree of risk you are willing to take. Cryptocurrencies are always a risk investment that requires careful consideration.
Thank you for the explanation. As a novice to the details and complication of the world of cryptocurrency, your article is very useful and valuable.
It has helped me to understand that there is much more behind each coin than just a different name.
Thank you for sharing.