Bitcoin Cash was designed after the hard fork technology of the Bitcoin blockchain which implemented an increased 8 MB of block size intending to confirm transactions at a faster rate and add more number of transactions per block. As such, Bitcoin Cash (BCH) and Bitcoin (BTC) are two independent and different currencies. Bitcoin Cash cannot be sent to the Bitcoin address or vice versa.
After the commencement of Bitcoin, various questions have raised regarding Bitcoin’s ability for scaling effectively. Being a cryptocurrency, it exists only within the blockchain and the network of computers. This is a revolutionary ledger-recording technology which makes it difficult to manipulate the ledgers for some reasons. The majority rule verifies what has transpired instead of an individual actor. In addition to that, this network is also decentralized; the network only exists on the computers of the entire world.
The main issue of the technology is that it is slow compared to the banks which deal with transactions through credit cards. Visa can process 150 million transactions every day which makes it an average of about 1,700 transactions every second. But the capability of the company always far surpasses that to around 24,000 transactions every second.
The number of transactions which the Bitcoin network can process every second is seven. The transaction takes nearly a minimum of 10 minutes for processing. With the Bitcoin network growing rapidly as new users are joining every day, processing of transactions would now take more time as the number of transactions would be increased without any change occurring in the existing technology which processes them.
There are various debates ongoing about the technology of Bitcoin which is concerned with the major problem of scaling along with increasing the processing speed of transaction verification. There are two crucial solutions: decreasing the data amount which has to be verified for every block which would help in processing the transactions cheaper and faster or extending the size of data blocks so that comparatively more information can get processed at a time.
Bitcoin vs Bitcoin Cash
The mining pools and the companies who are representing nearly 80 to 90% of the Bitcoin computing power decided to incorporate a segregated witness technology called SegWit2x in July 2017. This technology would decrease the data amount which has to be verified for each block by separating the block of data from the signature data which has to be processed for every transaction. They keep the data attached to an extended block.
The signature data is accountable for nearly 655 of the data which is processed in every block. This is an important technological shift. Doubling the block size from 1 MB to 2 MB which ramped up in the years 2017 and 2018, the Bitcoin block size increased to 1.035 MB on February 2019, surpassing previous records. The increased block size would help in improving the scalability of Bitcoin.
Research released by BitMix, a cryptocurrency exchange I September 2017, showed that implementation of SegWit2x had helped to increase the block size in the middle of technology’s steady adoption rate.
Scientists from the Bitcoin Unlimited had reveled in late 2017, that they had mined the first-ever 1 GB block of the world which is 1,000 times larger than the usual size.
There is a different story for Bitcoin Cash. Bitcoin developers and miners were the first for starting Bitcoin Cash who were equally concerned about the future and the ability of the cryptocurrency to scale effectively. But the individuals had various reservations regarding the adoption of a new ad segregated witness technology.
The creators felt as though the main problem of scalability was not properly addressed by SegWit2x, nor did they follow Satoshi Nakamoto’s outlined roadmap, the anonymous party who were the first for proposing the blockchain technology for cryptocurrency. In addition to that, the introduction process of SegWit2x was not transparent which led to concerns regarding the democratization and decentralization of the currency.
Some developers and miners in August 2017, initiated a technology known as hard fork for effectively creating the new currency which is Bitcoin Cash. The all-new Bitcoin Cash implemented a bigger size of the block of 8 MB for accelerating the verification process.
The level of difficulty has been adjusted for ensuring the survival of the chain as well as the speed of transaction verification irrespective of the numeric strength of the miners who are supporting it. But it has raised concerns regarding Bitcoin Cash’s security.
It was already so confusing before as people had to choose from Ethereum, ripple, Bitcoin, and others, now they would have to choose from 2 different types of Bitcoins. People generally ask which one of them is better. The fact is, two of them are just different. Each of them has its pros and cons. So let us explore some of the crucial points below.
- A New Name:
The name itself is given a new turn. The word cash indicates that the creators are trying to make this the future of cash currency.
+ Blocksize limit is larger which is 8MB. Due to this, more transactions can be processed at a cheaper fee.
– Bitcoin has numerous mining pools. Which means no situation is strong enough where an individual miner would have the 51% of the majority to rule the mining pools.
On the contrary, Bitcoin Cash is highly centralized. They already have three mining pools right now which makes more than fifty-one percent together. As the currency’s future would become too reliant on the three mining pools, this situation can be very dangerous.
- Technical Difference:
Being aware of the weaknesses, Bitcoin Cash has added new protection adjustments for closing any gaps and ensuring that the new currency is safe for everyone to use.
- Replay and Wipeout Protection
Unlike the algorithm which Bitcoin uses, the Bitcoin Cash uses the different hash algorithm. So, it is no longer possible to replay between the Bitcoin and Bitcoin Cash chain.
- On-chain scalability
The underlying theology of Bitcoin Cash allows an increment of 8MB of block size which is far more than earlier times. There are possibilities for the number of blocks increasing further in the future.
- New transaction signatures
To verify the distinction of Bitcoin from Bitcoin Cash, it has a unique transaction signature.
- Emergency Difficulty Adjustment (EDA)
It is a new algorithm that certifies normal chain work during the case of any dramatic changes regarding the numeric quantity of miners. This would provide the whole currency with additional stability.
Bitcoin would always remain highly secure but the improvement regarding transaction speed remains unclear till now. Bitcoin Cash could attain transaction processing speed of about 2 minutes to 30 seconds. Whereas, the security which the Bitcoin Cash blockchain is promising though, is unclear.
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