Bitcoin vs. Bitcoin Cash: A Comparison
An Overview of Bitcoin vs. Bitcoin Cash
There have been doubts about bitcoin's capacity to scale successfully since its beginnings. Transactions involving the digital currency bitcoin are processed, validated, and recorded on a blockchain, which is a digital ledger. Blockchain is a ground-breaking ledger-recording system. It makes manipulating ledgers much more difficult since the fact of what has happened is certified by majority rule rather than by a single player. This network is also decentralized, as it resides on computers all around the world.
The issue with Bitcoin's blockchain technology is that it is sluggish, especially when compared to institutions that handle credit card transactions. Visa Inc. (V), for example, handles almost 150 million transactions every day, or around 1,700 transactions per second. With 65,000 transaction messages per second, the company's capabilities greatly exceeds that. 1
How many transactions per second can the bitcoin network handle? Seven.2
Transactions can take up to several minutes to complete. Because there are more transactions to process without a change in the underlying technology that processes them, waiting times have increased as the bitcoin network has developed.
The core difficulty of scaling and enhancing the speed of the transaction verification process has been the subject of ongoing disputes over bitcoin's technology. To solve this challenge, developers and bitcoin miners have come up with two primary solutions:
The first includes reducing the amount of data that needs to be confirmed in each block, resulting in speedier and less expensive transactions.
The second step is making data blocks larger so that more data may be handled at once.
These answers led to the creation of Bitcoin Cash (BCH). We'll look at how bitcoin and BCH vary from one another in the sections below.
TAKEAWAYS IMPORTANT
Transaction processing time limits bitcoin, a problem that has sparked schisms among groups in the bitcoin mining and development communities.
Bitcoin Cash was created by bitcoin miners and developers who were concerned about the bitcoin cryptocurrency's future and capacity to scale.
BCH blocks may be up to 32 MB in size, whereas bitcoin blocks are restricted to 1 MB.
Bitcoin
In July 2017, mining pools and firms representing 80 percent to 90 percent of bitcoin computer power opted to use a segregated witness system (SegWit).
3 By eliminating signature data from the block of data that has to be processed in each transaction, this update reduces the amount of data that needs to be confirmed in each block.
It was connected in a long block. Signature data is anticipated to make up much to 65 percent of the data processed in each block, so this isn't a minor technological development.
In 2017 and 2018, there was a lot of talk about increasing the size of blocks from 1 MB to 2 MB. Bitcoin's average block size climbed to 1.305 MB in February 2019, breaking prior milestones. However, by January 2020, the average block size had dropped back to 1 MB. 4 Bitcoin's scalability is improved because to the bigger block size.
In September 2017, BitMEX, a cryptocurrency exchange, revealed research showing that SegWit deployment has helped boost block size, despite the technology's stable adoption rate.
5 proposals to deploy SegWit as well as double encryption
SegWit2 was the block size that was used.
Bitcoin Cash (BCH) is a cryptocurrency that
Bitcoin Cash, on the other hand, is a different story. Bitcoin Cash was created by bitcoin miners and developers who were both concerned about the cryptocurrency's future and its capacity to scale. These individuals, on the other hand, have qualms regarding the use of segregated witness technology. They believed SegWit2 did not adequately address the basic problem of scalability, nor did it follow the road map laid forth by Satoshi Nakamoto, the unidentified entity who first introduced the blockchain technology that underpins cryptocurrencies.
a larger block size of 8 MB to speed up the verification process, with a variable degree of difficulty to assure the chain's longevity and transaction verification speed regardless of the amount of miners backing it 6
The maximum block size for Bitcoin Cash was increased fourfold to 32 MB in 2018, although actual block sizes have remained a fraction of the 32 MB limit. 7
As a result, Bitcoin Cash can process transactions faster than the Bitcoin network, resulting in shorter wait times and reduced transaction processing costs. The Bitcoin Cash network has a far higher transaction rate than the Bitcoin network. However, the faster transaction verification time has drawbacks. The greater block size associated with BCH has the potential to impair security in comparison to the Bitcoin network. Similarly, bitcoin remains the most popular and biggest cryptocurrency in the world.
Beyond the divide that led to Bitcoin Cash, the discussion over scalability, transaction processing, and blocks has raged on. The Bitcoin Cash network, for example, underwent its own hard fork in November 2018, leading in the formation of Bitcoin SV, a new derivation of bitcoin. Bitcoin SV was built in an attempt to keep faithful to Satoshi Nakamoto's initial vision for bitcoin as expressed in the bitcoin white paper, while also allowing for scalability and quicker transaction speeds. 8
The argument over bitcoin's future looks to be far from being settled.
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