Bitcoin or Bitcoin Cash: A Compare and Contrast of Cryptocurrencies
For the last few years, the entire bitcoin community has been discussing how to solve its scalability problem. With the growing number of users, the current Bitcoin network is unable to process transactions efficiently. Mining pools and companies representing roughly 80-90% of Bitcoin computing power voted to incorporate a new technology known as a "segregated witness," which makes the amount of data needed to be verified in each block smaller. However, Bitcoin Miners and Developers decided to take an alternative path, one that would eventually lead to the new currency, Bitcoin Cash. How did it all work? What's the difference between Bitcoin Cash and the classic Bitcoin? And, could the emergence of this new currency threaten the price or even the existence of Bitcoin?
What do you know about Bitcoin Cash?
- Dividing Bitcoin into two currencies
- The difference between Bitcoin and Bitcoin Cash
- Ethereum "hard fork"
- What impact does Bitcoin have on the owners of the currency?
- Bitcoin Cash Mining
- Can Bitcoin Cash succeed?
Dividing Bitcoin into two currencies
Bitcoin is a digital currency based on a decentralised network of independent individuals and companies who own the governing computing power that is Bitcoin. Each node on the network is capable of storing and processing a steadily increasing number of records. The decentralised network of users is made up of miners, essentially PCs and laptops with brute-force processing speed solving computationally difficult puzzles to discover a new block. Miners receive a few bitcoins for every new block. When the block fills up, a new block is added to the chain, hence the term, “blockchain.” Because it takes more and more computing power to add blocks to the chain, bitcoin transactions and verifications are taking longer and longer to process.
Bitcoin is designed to be more difficult to mine as a means of keeping the system honest, but that also makes transactions extremely slow, compared to credit card transactions. The blocks created by miners are limited to 1MB, anything larger is rejected automatically, but many have proposed doubling block sizes to 2MB. There are other solutions being discussed, but until their scalability issues are fixed, the Bitcoin transaction rate remains a paltry seven transactions per second, while Visa clocks in at a capacity to handle 24,000 transactions per second. Restricting the size of each block to 1MB has led to increased transaction fees and long processing times.
Bitcoin Cash was created to speed up transactions so they could compete with PayPal and credit card companies. New standards in cryptocurrency made it possible for groups of miners to create separate blockchains through a branching process called a fork. One particular group established a new branch fork of the blockchain and has increased block sizes from 1MB to 8MB. This group of miners launched Bitcoin Cash on August 1st, 2017, and may well go down in history as the first step toward a new world currency.
The difference between Bitcoin and Bitcoin Cash
The cryptocurrency community understands changes need to be made if they are to compete in the “time is money” world of financial transactions. Two solutions have emerged as viable options for speeding up authentication: First, reduce the amount of data that requires verification within each block. Second, Increase the capacity of each block. Both solutions would lead to an acceleration of transaction authentications.
Slow transactions: What are the solutions?
Close to 90% of the cryptocurrency community proposes reducing the amount of data that requires verification. From this majority, SegWit2x was born. Named for “segregated witness,” this mechanism reduces the amount of data in each block by removing the signature data. The signature data accounts for up to 65% of all data processed in each block. The “left-over” data is reallocated to an expansion block. Also, it is likely SegWit2x will increase block sizes from 1MB to 2MB, at least by November. These steps to creating faster transaction times are called “soft fork,” and distinct from a “hard fork” because their implementation doesn’t require the development of a new Cryptome.
Bitcoin Cash: Born from conflict
Some in the cryptocurrency community found SegWit2x technology too opaque and costly. To continue mining under the SegWit2x platform, you could no longer simply hook up your PC and let it run; you had to pay for extensive upgrades, effectively pushing out average miners. This didn’t seem right to many in the community. The principles underlying Bitcoin were designed to decentralise and democratise currency, and the SegWit2x approach seemed to be the opposite. A few in the community came up with what the industry definitively calls a “hard fork,” and developed a new currency that remains faithful to the original roadmap outlined by Bitcoin creator Satoshi Nakamoto. This new currency is called Bitcoin Cash, and it processes eight times as many transactions as Bitcoin, even with its improved algorithm. Bitcoin Cash has its sceptics, but in the age of disruptors, Bitcoin Cash has definitely put a “hard fork” in the cryptocurrency highway.
Even before Bitcoin split, the most famous blockchain branching was undoubtedly a "hard fork," which occurred on July 20, 2016. It all began with the theft of 50 million miners from an unsuccessful experiment named Distributed Autonomous Organization (DAO). The subsequent division was chaotic and widely criticized for its unorthodox fork. 860 users of this currency attended the vote on changes in the Ethereum blockchain. Meanwhile, the entire "hard fork" was repeatedly under attack by hackers. Nevertheless, the ether weathered the storm, and after a year, it is one of the most popular cryptocurrencies ever. For this reason, we can reasonably assess that we do not have to worry too much about splitting blockchains in Bitcoin. If you would like to see more in the crypt of Ethereum, take a look at our article Ethereum (EVERYTHING YOU WANT TO KNOW).
What impact does Bitcoin have on the owners of the currency?
Experts agree, the average bitcoin owner probably won’t be affected. You don’t need to worry. In fact, you might even profit. Forking the blockchain means, amongst many things, from August 1st, 2017, everyone who owns bitcoins has the same amount of Bitcoin Cash as bitcoins at the moment of transition. Maybe you already have a lot of Bitcoin Cash in your wallet.
If you own bitcoins and you control all private keys, the same keys can be used to acquire Bitcoin Cash "coins." If you own the bitcoins, but you do not directly control the private keys, this means that your batches are stored on digital wallets or the stock market. In this case, you need to verify whether your chosen platform supports Bitcoin Cash. If not, you probably lost your Bitcoin Cash for good. Conversely, if Bitcoin Cash is supported as a currency, you can handle it as you please.
in Bitcoin-speak is a secret number that allows you to spend batches. Each wallet includes one or more of such keys that are stored in the wallet file. Private keys can be stored in computer files or the form of QR codes.
Other concerns could cause speculation that Bitcoin's distribution will mean a drop in its value. However, Bitcoin did not notice any visible crash, and today its value is at historical highs. As of this moment, Bitcoin’s distribution is on course to remain strong.
Bitcoin Cash Mining
Bitcoin Cash is almost the same as Bitcoin, but, to reap the benefits of Bitcoin Cash, you need to upgrade your hardware into a mining pool that focuses on the Bitcoin Cash Cryptome. The most popular Bitcoin Cash mining pool was established in China. You can also sign up for ViaBTC .
For some, the distribution of currencies and subsequent mining may be somewhat confusing, but since Bitcoin Cash is a completely separate virtual currency incompatible with Bitcoin, Bitcoin Cash and Bitcoin cannot be used at the same time. However, if you are just looking for a way to start cryptocurrency mining, try our simple but detailed tutorial-How to mine cryptocurrencies with Simplemining.net
Can Bitcoin Cash be profitable?
At the time the split took place, miners needed to use the same processing power to extract one block in a Bitcoin Cash blockchain as in a bitcoin blockchain. But, the value of 1 BCC (Bitcoin Cash) was more than ten times as small as 1 BTC (bitcoin). Why would Bitcoin Cash benefit at all?
The answer lies in the inconspicuous Bitcoin Cash software that reduces the difficulty of mining. Simply, if less than six blocks are extracted in 12 hours, the difficulty of mining will drop by 20%. The first block took about 13 hours, meaning that the difficulty was reduced six times, and the Bitcoin Cash extraction rate was slashed by almost a quarter of the time. In terms of long-term mining, Bitcoin Cash is undoubtedly more attractive because you’re mining faster.
Can Bitcoin Cash succeed?
Bitcoin and Bitcoin Cash rely on enough miners trusting the system. The value of one BCC is 300 US dollars. Bitcoin Cash will need a bit more than miners’ trust; it requires a change in your cryptocurrency wallet. At the moment many digital wallets aren’t supporting Bitcoin Cash, including the most popular wallet, Coinbase, which begs the question, will Bitcoin Cash survive.
Free deliveryto Alza branch
