Many of us know Bitcoin was introduced in 2009. Initially, it was not that familiar among all, and they were costly also. Later on, with technical advancements, bitcoin’s hidden colonization took its stand and became the top first cryptocurrencies in the world. Still, as the number of users increased, there was a reduced speed in the processing of transactions. This happened because of the size restrictions of blocks in the blockchain of 1MB.
To solve this issue, Bitcoin cash, which can store blocks of sizes 1MB to 8MB. This article discusses Bitcoin cash and the differences between Bitcoin cash and Bitcoins. You can invest in bitcoins using bitcoin trading wih the app btc loophole
The Emergence of Bitcoin Cash
The blocks in the blockchain are set to the size limit of 1 Mb due to various reasons. To make the system complex from the access of malicious users, the blockchain size was limited to 1 Mb. At those times, the Bitcoin users were also minimal. But as the number of bitcoin users increased, this size restriction produced increased transaction times, and many users complained that it was taking three days to complete a Bitcoin transaction. To overcome this situation, the users were paying higher transaction fees even for transferring $3 worth Bitcoin with $15 as a transaction fee.
The Bitcoin community overcame these problems by proposing the following solutions. They are:
- Bitcoin Unlimited
- SegWit (Segregated Witness)
The Bitcoins unlimited allowed the miners to hard code 1 MB block size, and the transaction that falls within 1 MB size can be allotted. If greater than 1 MB size comes, the space of unused blocked are added up to fit the block size. This might increase the speed of transactions by avoiding all the transaction traffic. But the miners have to be paid with higher fees and bonuses.
SegWit (Segregated Witness)
In this method, the miners adopted an idea of storing information related to the blocks outside of the blockchain, to some other storage space. By doing so, there will be no sizing issue, and the transaction time and confirmation time will be speedy. But as time went on, this system also became complicated.
Later during August 2017, the SegWit2x protocol was implemented, in which the part of the information is stored outside of the blockchain, and at the same time, the block size can be increased to 2 MB. But still, there were transaction timing issues.
On August 1st, 2017, a Hardfork was introduced, were a new Bitcoin network with 8 MB block size was introduced. Hardfork is just updating the existing Bitcoin software to a new version, and the entire Bitcoin network is split into Normal blockchains and hard forked blockchains. These two networks function independently. After the hard forking, the user with a standard Bitcoin network will receive the equivalent amount of Bitcoin cash tokens to the total Bitcoins they held.
After this challenging forking process, the Bitcoin cash was being prevalently used by most of the people than Bitcoins. The Bitcoin cash was also very cheaper in terms of the transaction fee than the Bitcoin transaction fee.
Difference between Bitcoin cash and Bitcoins
- The Bitcoins have a block size capacity of 1 MB leading to prolonged transaction time. Bitcoin cash, on the other hand, the Bitcoin cash has a size of 8 MB, allowing fast transaction time.
- The Bitcoins have only one mining pool, whereas the Bitcoin cash has three mining pools.
- The Bitcoin cash has a unique hash signature for each Bitcoin cash use. But in Bitcoins, the previous block’s information will also be available at the next block.
- Bitcoin cash has a unique verification process that is secured when compared to Bitcoins.
- A new algorithm was developed in maintaining the mining process of Bitcoin cash to ensure efficient work when there is scarcity in the number of miners.
- The bitcoin cash has a speedy transaction when compared to all cryptocurrencies.
Thus, this section has provided a deep insight into what Bitcoin cash is and how it is different from Bitcoins.