The Difference Between BTC and BCH: Explained
On August 1st, 2017 Bitcoin Cash was created as a split from the original Bitcoin blockchain. This was a result of a long-term discussion that was being played out between the core Bitcoin developers and miners in respect to the concern of slow transaction times and ultimate scalability. Now, with 10 years of Bitcoin and little more than a year of Bitcoin Cash (BCH), there’s a massive disparity in information between the two. As so, it can be difficult to work through the real defining and differentiating factors. In this short article, we’ll be discussing the distinguishing aspects of Bitcoin Cash and what really separates it from Bitcoin.
Bitcoin Cash is what’s referred to as a “hard fork” of Bitcoin. A hard fork is when a blockchain protocol makes a large, permanent divergence from the original code. This will render all of the previous operating nodes on the network unusable on the new network until they choose or “upgrade” to the newer version. This is a direct reference to the term “fork in the road” which implies that there are two paths to follow — either the new differentiated path or the older defined path.
The reason for the hard fork of Bitcoin Cash comes to light over a discussion of something called “block weight.” Block weight is essentially a concept that references the size of a block and its transaction times. The heavier the block, the longer it takes for a transaction as not as much data can be fit inside (keep in mind this is a very skeletal version of the concept).
In 2017, certain sectors of the Bitcoin community were becoming worried about the long-term viability and scalability of the Bitcoin network. Transaction times were extremely slow compared to other emerging networks and the longevity of the protocol was in question. To solve this issue a solution in the form of Segregated Witness, or SegWit was introduced.
Segregated Witness addresses this by removing a “heavy” piece of data from the block related to the signatures. When the signatures are removed there can be more data fit inside of the block which makes the transaction times faster! To put this into perspective, it’s estimated that signature data accounts for something like 65% of the data processed inside of each block! Now, this Segregated Witness solution in the context of Bitcoin Cash is called SegWit2x. SegWit2x doubles the size of the block in the traditional Bitcoin network from 1mb to 2mb while removing the signature data.
Despite its faster transaction times and lighter block weight, Bitcoin Cash has faltered in adoption. Following its inception, multiple groups immediately led campaigns towards global merchant integration with certain successes in things like 80% of Cyprus merchants being poised to accept BCH to the integration of BCH into the billion user platform WeChat. Though today, an unfortunate truth is realized for those involved with BCH: The amount of users and engagement that Bitcoin Cash has is dropping.
So cryptocurrency enthusiasts have to ask themselves, is a faster transaction time really enough to differentiate and scale the currency over its original protocol? Is there something more to Bitcoin Cash that can definitively challenge the market or does this fork in the road lead to a dead end?
