Everything started with the creation of Bitcoin in 2009. It was the first of its kind and it held the idea of decentralization of currency was favored by many. It quickly became popular and its value went up reaching 20K in 2017.
You usually need around 10 minutes to mine 1 block (it has a max capacity of 1 mb) which made everything pretty slow and limited the possible transactions per second to 10. This has become a big scalability problem and it turns out that it could have happened with any widely adopted coin.
The blocksize debate
There are 2 different sides to this debate – the big and small blockers. The former want the block size to be raised and in this way the problem will be solved. The latter are more for working with off-chain transactions, believing that the increase in block size would be a temporary solution and it would make it tougher to enter and help with the centralization. This is why Bitcoin Cash was created. Many doubting sides took part in the process. The key creators were Roger Ver, Jihan Wu and Deadal Nix.
What makes Bitcoin Cash and Bitcoin different?
The size of the block
Bitcoin has a limitation of 1 mb per block while with Bitcoin Cash it’s adjustable and starts from 8 mb. This allows for more transactions, but it also needs more storage, stopping many from participating. You will be needing a better hardware and bigger storage – all this costing more than before.
The algorithm for mining
The second big difference is connected to the algorithm. The one for BCH is easier so that more miners would be willing to come in. However, this strategy didn’t really work and led to people coming and going and creating block times which could not be predicted. This is why the Difficulty Adjustment Algorithm was included. To have more predictability, the mining difficulty became more flexible.
Pros and cons
To pick a better option you have to take into account your goals. With Bitcoin you are focusing on decentralization, public status and the absence of needed permissions. However, it is also slow and costly.
With Bitcoin Cash it’s the opposite – there are no scaling problems, it’s fast and cheap. However, here we can’t talk of real decentalization because there are only 3 pools which hold half of the hashing power. BCH even has a “CEO” in the face of Rick Falkvinge.
As you can see, both have pros and cons so it depends what your focus is.
What does the future hold?
There is a real war between the 2 technologies at the moment. Both are trying to get more miners and bring down the other one. There was a serious dispute after BCH was referred to as the “real Bitcoin”. Even the government got involved in the propaganda which shocked a lot of people and made the battle between the two even fiercers. Nobody could really say what the future holds for cryptocurrency. The resolution of the debate in which technology is better is also unclear. It’s advisable to stay away from anyone who is making secure predictions about the crypto future. We can say that BCH has helped with solving the scalability issue, the fees are small, the transactions – fast. However, with Bitcoin 10 times, more transactions are made at the moment. It’s normal for the fees to go up with the increase in size.
Can BCH become number 1?
Nobody could really say whether the 2 will continue to co-exist or only 1 will have to win in the end. There are many questions that come to mind whether it is a good idea to invest in Bitcoin Cash or Bitcoin, what will happen to their value, and many others. You should always do your research beforehand, come up with your important goals, and go for the option that suits you better. It will be interesting to see what will happen with this industry in the future since it is anything but predictable.