Difference Between Bitcoin and Bitcoin Cash
A not so long time ago , in a galaxy not so far away , some smart people invented Bitcoin . In the beginning , there were only a few enthusiasts excited about the new currency , but very soon people started to realize the potential . So , the number of miners and people who hold bitcoins and pay with it became to grow exponentially .
It is a great thing , overall , except for one glaring issue : Bitcoin's transaction speeds are very slow at around 7 transactions per second . As a comparison , Visa performs around 24,000 transactions per second . In 2017 it was clear that there are already too many transactions to handle and some reform is required in order to allow Bitcoin to scale further .
So , why can't the volume of transactions just be increased ? That's a great question . Initially , Bitcoin's Blocksize limit was 1 MB ( today it's 2MB ) . So , why they can't make it a larger number , for example 820,100MB ?
The answer to this can be explained using a heavy traffic metaphor . For example , say we have a heavy traffic issue , so we decide to change the speed limit to 200 miles per hour . What will happen ? First of all , there will be a safety issue because at this speed the chances of crashing and injuries increase . However a potentially bigger problem is that now old and small vehicles will not be eligible for highways , because they can't move fast enough . So the highway will be full of big people with big strong cars and a regular driver will stay at home or take slower roads to get to where they want to be . This is exactly what will happen with increasing the limit . More blocks = more data to process for each transaction . So small nodes will not be able to process this increased data and decentralization becomes inevitable .
But there is still a need for more transactions - what is the solution ?
The transaction issue has divided the Bitcoin community into two groups . One group claims that Bitcoin was never designed to be a " cup of coffee " payment solution , the other says that it has to scale . As neither group was ready to give up , in August 2017 Bitcoin was basically split using a process called " Hard Fork ” , which created a new version of Bitcoin called Bitcoin Cash . Bitcoin Cash uses the same codebase , but with a Blocksize limit of 8Mb . This increased limit makes possible a performance of around two million transactions processed per day .
Bitcoin and Bitcoin Cash in your wallet Ok , the couple is divorced , but who keeps the children ?
What happened to people who had Bitcoins before the fork ?
The easiest way to solve the issue was to clone the wallets . The last mined block , before the fork , was 478558. So , if you had any Bitcoins before that block , after the fork you've will end up having the same amount in Bitcoin Cash . Easy , isn't it ? I wish we could do the same with children . ( just kidding , it's creepy ! ) . Just imagine that you suddenly have 4 kids instead of
2. You are not really sure who is your original son . What about the school , friends , family ? Sounds like a nightmare . In the Bitcoin world this nightmare came .
You see , each person after the split has the same bitcoin with the same Private key in two wallets . This means that once you make a transaction , people can use the private key for a transaction in another currency . Instead of paying only from one wallet , the same amount will be deducted from the second too . Like if you have two apartments and somebody enters and takes a laptop in one of them , he also is able to take the same laptop from another apartment . This doesn't sound so great , right ?
So , all the people now have twice more ? Sounds great !
Not really , once the amount has increases , it automatically decreases the overall value of the currency , so nobody has actually become richer from the fork itself .
