On 1 August 2017, bitcoin hard-forked into two separate cryptocurrencies: bitcoin and bitcoin cash. Find out more about them, and how they compare.
Bitcoin cash vs bitcoin
Compare bitcoin and bitcoin cash
Bitcoin |
Bitcoin cash |
|---|---|
Maximum block size of 1MB |
Maximum block size of 8MB |
Allows for 250,000 daily transactions |
Allows for two million daily transactions |
Uses a scaling tool called SegWit2x |
Bigger blocks eliminate the need for a scaling tool |
Average block processing time of ten minutes |
Block processing time adjusts automatically in response to network conditions |
What is bitcoin cash?
Bitcoin cash is a standalone digital currency, created as an offshoot of bitcoin in August 2017. While similar to bitcoin in many ways, it operates under its own unique set of rules and with its own blockchain.
How did bitcoin cash come about?
For years, bitcoin miners have been anticipating problems in the scaling of bitcoin, and its 2017 surge in popularity brought this to a head. Bitcoin traders were facing increasingly long approval times, and were obliged to pay additional fees if they hoped to speed up the process.
There was widespread disagreement within the bitcoin mining community over how to solve these problems. While some miners wanted to implement a scaling tool known as SegWit2x, others felt this went against the spirit of the cryptocurrency and preferred to expand the block size.
This disagreement ultimately led to a ‘hard fork’ in the blockchain, which enabled one group of miners to implement one set of changes to the existing bitcoin, and another group to create new rules altogether for its offshoot – now known as ‘bitcoin cash’.
What the bitcoin cash fork meant for bitcoin owners
When bitcoin forked on 1 August, many bitcoin owners automatically received one bitcoin cash token for every bitcoin they owned. But if an exchange did not support bitcoin cash, it neither duplicated bitcoin into the new currency nor recognised it.
Upon launch, bitcoin cash was valued at a fraction of what bitcoin was worth – around $400 a unit to bitcoin’s $2800. There were huge swings in its price during the first week of trading, and this was volatility that showed no signs of abating in the following months. In short, the long-term future of bitcoin cash was unclear from the outset, and still remains to be seen.
FAQs
Will bitcoin cash impact bitcoin?
For the first few months of cash’s existence, it looked unlikely to trouble its more established rival in any major way. Bitcoin, after all, is the first cryptocurrency, as the original boasts a substantial reputation.
In November 2017, though, a failed fork for bitcoin meant that the much-anticipated Segwit2x was not implemented as planned – and led to a major rally for cash at the expense of bitcoin.
Will bitcoin cash survive?
It’s not clear what the future holds for bitcoin cash, but the cryptocurrency looks likely to survive in the near term. Whether it will maintain a substantial value, however, is a more significant point of debate: there are over 900 cryptocurrencies on the market, with many more yet to be minted, and it could be vulnerable in a growing market.
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