{"id":6389,"date":"2024-01-29T15:14:56","date_gmt":"2024-01-29T15:14:56","guid":{"rendered":"https:\/\/paybis.com\/blog\/?p=6389"},"modified":"2024-04-17T12:42:41","modified_gmt":"2024-04-17T12:42:41","slug":"difference-between-bitcoin-and-bitcoin-cash","status":"publish","type":"post","link":"https:\/\/paybis.com\/blog\/difference-between-bitcoin-and-bitcoin-cash\/","title":{"rendered":"What is the Difference Between Bitcoin (BTC) and Bitcoin Cash (BCH)?"},"content":{"rendered":"

Bitcoin<\/a>, the gold standard of cryptocurrencies, too has its fair share of drawbacks. And much like the stalwarts of political parties, one side of the Bitcoin community disregarded its \u2018defects\u2019 as \u2018special effects\u2019 giving more power to the network, while the other side advocated for a fix.<\/p>\n

This potential \u201cfix\u201d was not easy, however. For a decentralized network like Bitcoin to undergo chances, it has to undergo a thorough voting process involving governance proposals and BTC holders voting for\/against a change.<\/p>\n

Eventually, the friction between the two sides grew to an extent where the blockchain split in two \u2014 a hard fork<\/a>!<\/p>\n

This article will shed light on how <\/strong>Bitcoin Cash<\/strong><\/a> was created, how it differs from Bitcoin, and how the two are similar.<\/strong><\/p>\n

What Went Wrong With BTC: Bitcoin Scaling Debate<\/h2>\n

The Bitcoin scaling debate is the nexus event that led to Bitcoin\u2019s hard fork and gave birth to Bitcoin Cash (BCH).<\/p>\n

It was a significant event in the history of Bitcoin (BTC), revolving around a fundamental disagreement on how to best scale the network.<\/p>\n

Bitcoin, designed by Satoshi Nakamoto<\/a>, was initially limited in its capacity to process transactions. The network could only handle a certain number of transactions per block, with each block being generated approximately every ten minutes. This limitation was initially not a problem, but as Bitcoin grew in popularity, the number of transactions began to exceed the space available in each block.<\/p>\n

The crux of the scaling debate centered around the size of the blocks in Bitcoin’s blockchain.<\/strong> The original block size was 1 MB, which limited the network to handling about 3 to 7 transactions per second. This was significantly lower than traditional payment systems like Visa, which can handle over 65,000 transactions per second<\/a>.<\/p>\n

The gravity of this situation can be understood better by looking at the transaction fees<\/a>. At times of network congestion, BTC transaction fees could be as high as $40.<\/p>\n

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It was obvious that paying tens of dollars for each transaction will not allow Bitcoin to go mainstream \u2014 it was simply impractical for mass adoption and something needed to be done.<\/p>\n

Proposed Solutions and Debate<\/h3>\n

Increase Block Size<\/h4>\n

One camp advocated for increasing the block size. This would allow more transactions per block, thus increasing the throughput of the network. Proposals like Bitcoin XT, Bitcoin Classic, and Bitcoin Unlimited were put forward, suggesting various increased block sizes.<\/p>\n

Segregated Witness (SegWit)<\/h4>\n

Another solution was Segregated Witness, proposed by the Bitcoin Core developers. SegWit aimed to increase the block capacity without changing the size by altering how data was stored in each block. It also had the added benefit of fixing certain bugs and enabling the development of second-layer solutions like the Lightning Network.<\/p>\n

Debate and Division<\/h3>\n

The debate became highly contentious, dividing the community into factions. Each side had different views on what was more important: keeping Bitcoin decentralized and secure (which favored smaller blocks) or increasing its capacity to accommodate more users (favoring larger blocks).<\/p>\n

The major blocker to increasing block size was the concern over decentralization and network security. Larger block sizes, while they could theoretically accommodate more transactions, posed several significant challenges:<\/p>\n