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Understanding Bitcoin Cash and Its Difference from Bitcoin

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Understanding Bitcoin Cash and Its Difference from Bitcoin


While Bitcoin reigns
supreme in the cryptocurrency space, it is
not without some drawbacks, particularly its low transaction volume, which
keeps it from maximizing the efficiency of payments.

That’s where Bitcoin
Cash came into play, serving as a solution to the problem and providing a
cheaper, faster means to process payments. Since its inception, Bitcoin Cash
has risen to the 25th spot in the largest cryptocurrencies by market capitalization.

Bitcoin Cash Explained

Bitcoin Cash is a
cryptocurrency introduced in 2017 through a hard fork from the Bitcoin
blockchain. The digital currency was developed to solve transaction speed
issues of Bitcoin, as some participants looked to see Bitcoin process more
transactions.

The main difference
between Bitcoin Cash and Bitcoin is the block size. A crypto’s block size
impacts the number of transactions per second, smart contracts, performance,
and price.

Bitcoin Cash’s block
size tends to be larger when compared to the world’s biggest cryptocurrency,
which maintains a block size of 1 megabyte (MB) and processes up to seven
transactions per second.

The size of Bitcoin
Cash’s block was originally 8 MB, but it later grew to 32 MB, allowing the
digital currency to process hundreds of transactions per second, with each only
costing less than a penny.

Block size and
transaction speed aside, Bitcoin Cash is pretty similar to Bitcoin, as it is
also an open-source, decentralized digital network.

In addition, the supply
of Bitcoin Cash caps at 21 million coins, exactly like Bitcoin. Miners also
authenticate and add new transactions to the blockchain with cryptography to
solve complex math problems, earning Bitcoin Cash tokens when they are right.

Bitcoin Cash and
Bitcoin

As mentioned above,
Bitcoin Cash and Bitcoin have different block sizes. Bitcoin Cash’s bigger
block size lets it process cheaper transactions at a much quicker rate than
Bitcoin. A single Bitcoin transaction usually costs $59.

However, the larger
block size may mean Bitcoin Cash is sacrificing security in exchange for faster
transactions because fewer miners are processing and verifying the
transactions.

The 32 MB block size
and faster transaction confirmation time could put Bitcoin Cash’s security at
risk of being compromised in relation to the Bitcoin network.

Bitcoin Cash is okay if
you’re only making small purchases, but if you’re buying items like a house or
a car, it would be better to use slower yet more secure crypto such as Bitcoin.

Bitcoin Cash and
Bitcoin also differ in market capitalization. The overall market cap of Bitcoin
Cash currently stands at around $6 billion, while the world’s biggest crypto
now has a market size of over $700 billion.

Investing in Bitcoin
Cash

Interested investors
can buy Bitcoin Cash on major cryptocurrency exchanges like Kraken and Coinbase
or platforms such as PayPal. In exchanges, you will be required to open an
account and fund that account to hold Bitcoin Cash and other cryptocurrencies.

In deciding what to do
with your Bitcoin Cash, there are several options you can consider. For
example, you can keep them as investments and store them in a crypto wallet,
convert them into other cryptos, or use them for transactions.

However, if you’re looking to invest long term, the
original Bitcoin would be ideal.

If you measure Bitcoin
Cash in Bitcoin, you may observe that the price of Bitcoin Cash has dropped
gradually since its launch. Therefore, it would be better to opt for Bitcoin as
it should work as a safer investment than Bitcoin Cash.

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