Bitcoin Vs Bitcoin Cash: All You Need To Know


Crypto investors can get confused between Bitcoin and Bitcoin Cash. This article is all about what these blockchains are and their important features.

Introduction to Bitcoin and Bitcoin Cash

Bitcoin is the flagship cryptocurrency that founded the virtual currency market. Bitcoin is often touted as digital gold or gold 2.0. The main use cases for Bitcoin are as store of value and inflation hedge.

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On the other hand, Bitcoin Cash was created as digital cash with a low per unit price and more accessibility. BCH was generated following a hard fork of Bitcoin blockchain. The underlying code for Bitcoin Cash is same as Bitcoin. At the same time, before the fork both tokens share a common transaction history.

Creation of Bitcoin Cash

Bitcoin Cash was created as a result of fork taking place in Bitcoin blockchain. Hard forks are upgrades that are accepted by the blockchain community partially. Therefore, the part of the community that does not agree with the update branches out into a new blockchain.

Bitcoin blockchain did not agree with the upgrade that was introduced to the network in 2017. Therefore, the part of Bitcoin investors diverged into a new blockchain named Bitcoin Cash. Bitcoin users continued to stick with the previous version rules and Bitcoin Cash investors went ahead with new rules.

Bitcoin Scalability Problem

There has been some debate around Bitcoin scalability. Bitcoin is regarded as an international financial network therefore the platform can scale effectively.

At the same time, Bitcoin network also has the highest level of decentralization and resistance against censorship. However, per second transaction through put for the blockchain network is still conservative.

The biggest digital payment solutions providers such as VISA can process 150 million transactions per day. Their average transaction count per second is 1700. The firm has retained that it is planning to upgrade to 24 thousand transactions per second.

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However, Bitcoin that operates in a decentralized manner processes 7 transactions per second. Transactions on Bitcoin blockchain require verification using the Proof-of-work consensus model.

Each block of Bitcoin network can store 1 MB data. Therefore, with increasing demand for Bitcoin blockchain a backlog of unverified transactions starts to pile up. During the peak trading volume durations, transaction backlog can grow as high as 100K pending verification.

Bitcoin lines up transactions based on trading fee. It can result in transaction fee inflation with investors competing against each other to get their transaction approved first.

This problem persists on account of scalability limitation. To address the problem, Bitcoin community proposed two solutions. The first advice was to increase the data capacity of each block so that more transactions can fit on each.

The second idea was to keep the original block size and use Layer-solution for incrementing scalability through alternative transaction channels. However, community remained concerned about these solutions and reverted to hard fork.

What is Bitcoin Cash Hard Fork?

In 2017, miners and Bitcoin investors who represented 85% of the hash power conducted a meeting to address the scalability issue. This meeting led to the creation of SegWit2x update. This upgrade was designed to allow Bitcoin network to increase scalability by implementing Segregated Witness.

It means that a portion of data is stored outside of the block and expands its capacity to 2 MB. However, this proposal was not approved by 100% of the Bitcoin community on account of concerns around centralization leading to creation of Bitcoin Cash.

Bitcoin Vs Bitcoin Cash: Key Differences

Bitcoin Cash and Bitcoin introduced difficulty adjustment meaning that block mining difficult is increased if they are ahead and decreased if they are lagging behind.

Block size for Bitcoin blockchain is still 1 MB while for BCH it is 32MB meaning lower transaction costs and 200 TPS speed.

Bitcoin does not support smart contract but Bitcoin Cash has incorporated Cashscript to host smart contracts.

Developers can issue new tokens on Bitcoin network using Omni layer. Bitcoin Cash has Simple Ledger Protocol for token creation.

RBF function replaced unverified Bitcoin transactions with higher fees. Bitcoin Cash has removed this feature such that unconfirmed transactions become irreversible.

Bitcoin rarely implements upgrades and retains its immutability while Bitcoin Cash frequently adds new updates and forks into new networks such as Bitcoin SV.


Bitcoin and Bitcoin Cash stemmed from the same core blockchain networks. However, with the passage of time these networks have morphed into different projects.

Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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