Bitcoin Cash has been a point of confusion in the past – with new investors and users interested in the world of cryptocurrency exploring the altcoin as an option for a “different Bitcoin”. The name might sound like Bitcoin, but the Bitcoin Cash itself is very different to the leading, original cryptocurrency.
Bitcoin Cash was started by miners and developers who were concerned about Bitcoin’s ability to sustain its place in the future of economics. With worries about issues linked to scalability, transaction speed and blockchain size, Bitcoin Cash was created as an alternative cryptocurrency to combat the main concerns about Bitcoin.
Bitcoin Cash – the origin
Bitcoin Cash is one of the first few hard forks to have split from Bitcoin’s blockchain. It has roots in the original Bitcoin blockchain but separated from the main network in August 2017 and now has its own blockchain with some key differences.
The main advocates of Bitcoin Cash use the creator of Bitcoin (Satoshi Nakamoto) and his original idea for Bitcoin as a payments service – more than just an investment option – as inspiration for the changes made from Bitcoin in the development of Bitcoin Cash. Those behind the altcoin see Bitcoin Cash as a way to implement cryptocurrency into daily uses as an active competitor to payments corporations that profit from processing payments.
The difference between Bitcoin and Bitcoin Cash
One major difference between Bitcoin and Bitcoin Cash is that the developers behind Bitcoin Cash introduced a block size to 8MB in order to speed up the process and allow for quicker transaction times.
Bitcoin Cash also has a level of verification difficulty that can be adjusted to make sure the network can scale the transaction verification speed, no matter how many miners are supporting it. Basically, this means Bitcoin Cash can operate and process transactions quicker than Bitcoin and that transaction fees are often lower than Bitcoin’s.
On a technical level, Bitcoin Cash also does not make use of Segregated Witness (SegWit) – unlike Bitcoin.
The similarities between Bitcoin and Bitcoin Cash
While there might be some key differences, there are also fundamental similarities between the two cryptocurrencies. Both Bitcoin and Bitcoin Cash use the Proof of Work (PoW) consensus mechanism. This is to achieve the minting of new tokens that go into supply. Because of this mining process, both are mostly mined under the services of Bitmain.
Both Bitcoin and Bitcoin Cash are also capped at the same number of tokens that will ever be minted: 21 million.
At the time of the blockchain split, Bitcoin Cash also started using the “Emergency Difficulty Adjustment” (EDA) as a method to make mining more difficult over time and slow down supply generation. Because of their similarities in mining, Bitcoin miners were able to profit from both tokens by alternating their mining between the two. Since then, Bitcoin Cash has made it easier for miners to mint new tokens – so that the supply of Bitcoin Cash does not become too limited.