Bitcoin vs Bitcoin Cash: What's The Difference?

Updater face
Last updated Jul 02, 2024 | 02:50 PM UTC

While Bitcoin is the premier cryptocurrency, its high price and significant market cap often drive traders to explore altcoins that provide lower entry prices.

Over the years, Bitcoin Cash or BCH has been a popular choice for altcoin enthusiasts who prefer the Bitcoin network but still want to explore alternative tokens. 

Both tokens offer comprehensive trading opportunities, but their differences can significantly impact trading strategies. This article delves into the intricacies of Bitcoin versus Bitcoin Cash, exploring their differences, market values, and use cases.

Key takeaways 

  • Bitcoin Cash: Created in 2017 to address Bitcoin's scalability issues with a larger block size.
  • Main differences: Bitcoin has a 1 MB block size, higher fees, and slower transactions. Bitcoin Cash has a 32 MB block size, lower fees, and faster transactions.
  • Pros of Bitcoin: High market value, widespread acceptance, robust security, and liquidity.
  • Cons of Bitcoin: Slow transactions, high fees, scalability issues, and high energy consumption.
  • Pros of Bitcoin Cash: Faster transactions, lower fees, and suitability for everyday use.
  • Cons of Bitcoin Cash: Less market acceptance, centralization risks, and lower market value.
  • Market value: Bitcoin has a significantly higher market value compared to Bitcoin Cash.
  • Use cases: Bitcoin serves as a digital gold and investment asset. Bitcoin Cash is practical for everyday transactions and peer-to-peer payments.

What is Bitcoin Cash?

Bitcoin Cash (BCH) emerged in 2017 from a hard fork of the original Bitcoin network. This split was led by a group of developers and miners who were concerned about Bitcoin's scalability issues. They believed increasing the block size was essential for processing more transactions quickly and efficiently. 

Bitcoin Cash launched on August 1, 2017, with a block size limit of 8 MB, later increased to 32 MB. The motivation was for the token to adhere more closely to Satoshi Nakamoto's vision of a peer-to-peer electronic cash system, emphasizing usability in daily transactions.

BCH debuted with a price of around $240 per coin, quickly gaining traction among those who supported its vision of a scalable, everyday cryptocurrency. The token reached an all-time high of $3,785 within less than six months of its launch. Currently at the time of writing, BCH is trading at $386.
 

BTC BCH chart
Bitcoin vs Bitcoin cash chart, yearly price growth. Source: CoinMarketCap

Main differences between Bitcoin (BTC) and Bitcoin Cash (BCH)

Bitcoin and Bitcoin Cash may share a common origin, but they diverge significantly in their technical and functional aspects. Understanding these differences is key to appreciating their respective roles in the crypto market.

Technical differences

The most notable technical difference lies in the block size. Bitcoin maintains a block size of 1 MB, designed to keep the network decentralized and secure. In contrast, Bitcoin Cash boasts a block size of 32 MB, enabling it to handle more transactions per block and thus, reduce transaction times and costs. This increase in block size was a pivotal reason for the hard fork, as it aimed to solve Bitcoin’s scalability issues.

Transaction speed and fees

Bitcoin’s smaller block size results in slower transaction speeds and higher fees, especially during periods of high network congestion. On the other hand, Bitcoin Cash’s larger blocks allow for faster transactions at lower fees. This makes Bitcoin Cash more suitable for everyday transactions, aligning with its goal of being a peer-to-peer electronic cash system. For traders, these differences in speed and cost can significantly influence trading strategies and the choice between the two.

Security and decentralization

Bitcoin’s smaller block size contributes to its higher level of decentralization and security. A more extensive network of nodes ensures greater security against attacks. Bitcoin Cash, while faster and cheaper to transact with, may face more centralization risks due to its larger block size. Fewer nodes can process the larger blocks, potentially compromising the network's decentralization.

Market acceptance and community support

Bitcoin enjoys wider acceptance and a larger community. It is often referred to as digital gold, serving as a store of value and a hedge against inflation. Bitcoin Cash, although growing, has a smaller community and less market acceptance. This difference impacts their usability and perceived value.

Bitcoin Network vs Lightning Network

Bitcoin has developed the Lightning Network to address scalability issues. This second-layer solution facilitates faster transactions by enabling off-chain transactions. While this solution has improved Bitcoin’s usability for smaller transactions, Bitcoin Cash’s on-chain scaling approach directly increases transaction capacity without needing a separate layer.

Pros and cons of Bitcoin Cash

Pros of Bitcoin Cash

  • Faster transaction times: BCH processes transactions more quickly due to its larger block size.
  • Lower transaction fees: With more transactions per block, BCH generally has lower fees compared to BTC.
  • Practical for daily transactions: The lower fees and faster speeds make BCH suitable for everyday use, such as retail purchases and peer-to-peer payments.

Cons of Bitcoin Cash

  • Less market acceptance: BCH is accepted by fewer merchants and has a smaller community compared to BTC.
  • Security and centralization risks: The larger block size can lead to more centralization, potentially reducing network security.
  • Lower market value: BCH typically has a lower market value compared to BTC, which may impact its appeal as an investment asset.

Pros and cons of Bitcoin

Pros of Bitcoin

  • High market value: Bitcoin has the highest market capitalization among all cryptocurrencies, making it a valuable asset for investors.
  • Widespread acceptance: Bitcoin is widely accepted by merchants, institutions, and investors globally.
  • Robust security: Bitcoin’s extensive network of nodes and miners provides strong security and resistance to attacks.
  • Store of value: Often referred to as digital gold, Bitcoin is viewed as a reliable store of value and a hedge against inflation.
  • Liquidity: Bitcoin’s high liquidity allows for easy buying and selling on most cryptocurrency exchanges.

Cons of Bitcoin

  • Slow transaction speed: Bitcoin’s 1 MB block size results in slower transaction processing times.
  • High transaction fees: During peak times, Bitcoin transactions can incur high fees.
  • Scalability issues: Bitcoin’s network can become congested, leading to delays and increased costs.
  • Energy consumption: Bitcoin mining requires significant energy, raising environmental concerns.

Who has more market value, Bitcoin or Bitcoin Cash?

Bitcoin holds a significantly higher market value compared to Bitcoin Cash. As of the latest data, Bitcoin’s market cap is over $1.2 trillion, and Bitcoin Cash is just over $7.6 billion. 

Historical market trends

Since its inception, Bitcoin has been the dominant crypto, often viewed as digital gold. Its first-mover advantage, widespread recognition, and established infrastructure contribute to its high market value. BCH, while created to address Bitcoin’s scalability issues, has not achieved the same level of market penetration or value.

Factors influencing market value

Several factors influence the market value of BTC and BCH, including:

  • Adoption and usage: Bitcoin’s extensive adoption by investors, institutions, and merchants bolsters its market value. Bitcoin Cash, despite its practical advantages, has not seen the same level of adoption.
  • Security and trust: Bitcoin’s long track record and robust security contribute to its high market value. BCH, being newer and having faced some criticism over centralization risks, has a lower market value.
  • Market sentiment: Investor sentiment plays a significant role in the market value of cryptocurrencies. Bitcoin’s status as a pioneer and its perception as a store of value drive higher market confidence and investment.

Understanding these market dynamics is crucial for traders. Bitcoin’s higher market value and stability make it a preferred asset for long-term investment. Bitcoin Cash, with its lower market value but faster transaction times, might appeal to traders looking for quick, cost-effective transactions.

What are some popular use cases for Bitcoin and Bitcoin Cash?

Bitcoin use cases

  • Digital gold: Bitcoin is often likened to digital gold due to its limited supply and store of value characteristics. Investors see BTC as a hedge against inflation and economic uncertainty.
  • Store of value: Many holders view Bitcoin as a long-term investment, similar to holding gold or other precious metals.
  • Investment asset: Bitcoin’s high market value and liquidity make it a popular choice for institutional and retail investors looking for portfolio diversification.
  • Bitcoin ETFs: Since January 2024, Bitcoin exchange-traded funds have been trading across several major stock exchanges, including the US. These funds allow users to gain exposure to Bitcoin without having to manage exchanges and wallets, which can be complex. 

Bitcoin Cash use cases

  • Everyday transactions: BCH’s lower fees and faster transaction times make it suitable for everyday transactions, such as buying goods and services.
  • Peer-to-peer payments: BCH facilitates quick and cost-effective peer-to-peer payments, aligning with its goal of being a practical digital cash system.
  • Retail adoption: Some merchants prefer BCH for its efficiency in handling payments, reducing transaction costs and improving customer experience.

Final thoughts 

Bitcoin, with its high market value, widespread acceptance, and robust security, serves as a digital gold and store of value. In contrast, Bitcoin Cash offers faster transactions and lower fees, making it suitable for everyday use and peer-to-peer payments. Both cryptocurrencies have their strengths and weaknesses, catering to different trading strategies and user needs. 

By analyzing their differences, traders can make informed decisions and optimize their trading approaches. Whether prioritizing security and long-term investment with Bitcoin or leveraging the practicality of Bitcoin Cash, understanding these assets is crucial for success in the cryptocurrency market.

Frequently Asked Questions

What are the main differences between Bitcoin and Bitcoin Cash?

The main differences between Bitcoin and Bitcoin Cash center around block size, transaction speed, and fees. Bitcoin has a smaller block size of 1 MB, resulting in slower transaction speeds and higher fees, particularly during periods of high network congestion. This design helps maintain a higher level of security and decentralization. 

In contrast, Bitcoin Cash features a larger block size of 32 MB, which allows for faster transaction speeds and lower fees. This makes Bitcoin Cash more suitable for everyday transactions. However, its larger blocks can lead to increased centralization risks due to fewer nodes being able to process the larger data.
 

Who offers faster transaction times, Bitcoin or Bitcoin Cash?

Bitcoin Cash (BCH) offers significantly faster transaction times compared to Bitcoin (BTC) due to its larger block size and more efficient transaction processing. On average, Bitcoin transactions can take about 10 minutes to confirm, but during periods of high network activity, this can extend to hours. In contrast, Bitcoin Cash transactions typically confirm within a few minutes, providing a much faster and more reliable experience for users, especially during times of high demand.
 

 

 

Who has a larger community, Bitcoin or Bitcoin Cash?

Bitcoin has a significantly larger community. As of March 2024, Bitcoin has over 46 million active wallets, which is the largest in the crypto industry. While the exact number of investors or wallets for Bitcoin Cash is not available, it’s significantly lower than Bitcoin. 

 

Written by

Mohammad is an experienced crypto writer with a specialisation in cybersecurity. He covers a wide variety of topics spanning everything from blockchain and Web3 to the retail crypto space. He has also worked for several start-ups and ICOs, gaining insight into the mindset and motivation of the founders behind the projects.