Last updated on September 14th, 2025 at 07:28 pm
Bitcoin is the forerunner of cryptocurrencies and has been in existence for more than a decade. It came with an innovation that changes the way people transact business, utilizes a medium of exchange, and much more by ushering in transparency, decentralized, and top-notch blockchain technology.
As Bitcoin’s popularity grew, more individuals saw the value in utilizing it, making it ideal for cryptocurrency development. This was a benefit, but it also created some problems.
In 2015, a scalability issue was discovered and numerous parties collaborated to find a solution. A group argued that adopting large-block solutions was better for Bitcoin, whereas the latter believed that smaller blocks were the key.
Bitcoin Cash: What is it?
Bitcoin Cash came into existence through a hard fork of Bitcoin, which had occurred because of differences in principles and interpretation of the concepts that Satoshi Nakomoto had left behind.
The BCH (Bitcoin Cash) community believed that there was a need for massive Bitcoin adoption and that the small block size was not sufficient for the blockchain. They had a different interpretation of Satoshi’s vision and felt that decentralization was slowing down the massive adoption of Bitcoin technology.
Their Bitcoin counterparts believed that an underlying concept of the technology was decentralization, and they did not want to sacrifice that for massive adoption like the BCH theorists.
They prioritized censorship-resistance, decentralization, permissionless, and trustless transactions over scalability and other features.
In December 2017, both sides went their separate ways. The Bitcoin Cash concept was pushed further by Bitcoin Unlimited, a group of developers and miners who believed that if Bitcoin did not become more scalable, massive adoption was not imminent.
Though Bitcoin Cash has different elements from its progenitor, it still shares some similarities with BTC. A key difference between both blockchains is that BCH’s block size increased to improve the transaction speed within the ecosystem. To enhance its scalability, BCH employed the Lightning network.
Bitcoin: What is it?
Bitcoin Cash has been defined, but we would briefly examine Bitcoin to provide more context and depth.
The individual or team who created Bitcoin is unknown. However, they go by the name Satoshi Nakamoto. It was developed in 2008 and became a public currency the following year. Bitcoin’s consensus mechanism is Proof-of-Work, which means that massive amounts of computational power are required to verify transactions and mine the cryptocurrency.
The mining process is becoming more complex by the day. This is because the maximum supply of Bitcoin is 21 million, and miners are rapidly approaching this figure.
Before a miner gets rewarded, they have to solve a complex mathematical question before others. Once they do that, they verify the transactions and input them in a new block while earning BTC in return.
Some green energy advocates have urged Bitcoin miners to use less energy during their operations.
Similarities Between Bitcoin and Bitcoin Cash
Though they may be different in some aspects, both blockchains offer some similarities.
• Similar whitepapers
Bitcoin Cash did not move away from the tenets of the Bitcoin whitepaper created by Satoshi Nakamoto. Instead, its proponents interpreted the concepts differently from those that stayed with the original Bitcoin blockchain after the hard fork. Both BCH and BTC use the same whitepaper.
• Maximum Supply
Both Bitcoin and Bitcoin Cash have 21 million tokens as their maximum supply. Once 21 million tokens are mined in both blockchains, no new token will be released. The only thing that can occur is deflation, meaning that some cryptos may be removed from circulation. For example, if a hardware wallet holding BTC and BCH is misplaced, the total supply of the tokens in circulation will drop.
• Mining Algorithm and Reward Mechanism
BCH and BTC use the Proof of Work consensus process. Hence, users must mine to obtain new tokens. Miners who solve the complex mathematical puzzle before others receive additional tokens.
• Quest for massive adoption
Although both cryptocurrencies seek widespread adoption, their approaches to this objective differ.
Differences Between Bitcoin Cash and Bitcoin
The notable difference between both blockchains lies in their solutions to the scalability problem.
• Scalability
Proponents of BCH, Bitcoin Unlimited, believed that SegWit was doing little or nothing to solve the scalability issue in the Bitcoin blockchain. They preferred the features that Lightning Network offered. Apart from that, they surmised that an increased block size of 32 MB would improve the transaction speed.
Bitcoin, on the other hand, believed that the current block size of 1MB should not be modified.
As a result of the hard fork, Bitcoin Cash is faster than its counterpart, Bitcoin, while offering cheaper transaction fees to users.
• Value
At the moment, Bitcoin is far more valuable than its hard-forked version, BCH. Its price skyrocketed faster than BCH.
• Originality
Bitcoin still utilizes the original blockchain created by Satoshi Nakamoto, but BCH is a hard fork initiated by some developers and miners, leading to the formation of new crypto.
The algorithm structure of Bitcoin Cash has been modified. BCH utilizes a different hash algorithm to ensure that a replay does not exist in both chains. If a split ever occurs in the future, BCH has created safety systems to ensure that there is no replay.
The proponents of Bitcoin Cash believe that if a hard fork should occur later on, the mechanisms that it has put in place will ensure that the existing chain and the new one would work independently of the other.
Analyzing The Two Solutions
Both solutions had different effects on the bitcoin blockchain. If the large blocks were adopted, it implied that the chain would become faster, but there was a resultant issue. Decentralization would reduce because only a tiny percentage of miners can work with large nodes. This undermines bitcoin’s primary goal of decentralization.
On the other hand, smaller blocks meant slower transactions but a higher level of decentralization. It was easy for nodes to manage the system when the blocks were smaller, resulting in a dilemma.
General Overview of Bitcoin Cash
Bitcoin and Bitcoin Cash bear some similarities, apart from their names. The latter was developed as a hard fork of Bitcoin, and the size of their blocks is a significant difference between them.
During the great debate on solving Bitcoin’s scalability problems, some argued that employing Segregated Witness was the better solution, but Bitcoin Cash proponents disagreed. The latter reasoned that utilizing Segregated Witness would not sufficiently alleviate the problem. To solve the scalability problem, they created Bitcoin Cash through a Bitcoin hard fork.
Another motivation for the creation of Bitcoin Cash was the belief among some developers that utilizing Segregated Witness was contrary to the philosophies of Bitcoin’s inventor.
Bitcoin Cash can store up to 8MB of data in each block, allowing it to execute 116 transactions per second with ease.
At the moment, BCH can store up to 32MB of data after being expanded. Doing this solved the scalability issue, though it left a snag.
Larger blocks, as earlier mentioned, require more computing power than smaller blocks, which means that Bitcoin Cash nodes consume more computing power. It is a case of sacrificing one feature for the other.
In Conclusion,
- Bitcoin Cash and Bitcoin have similar technological architectures in that they both use the Proof-of-Work consensus, which requires the mining of new blocks.
- Their maximum supply is limited to 21 million. Bitcoin Cash is a faster cryptocurrency than its forerunner, Bitcoin, and can be used to pay for smaller transactions with ease. Because of the enormous amount of computing power required, Bitcoin Cash may not be as efficient as desired for large transactions.
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