For people who are a novice to the world of Bitcoin, the word "Bitcoin" and Bitcoin cash may look like synonyms. However, there are many terms that you need to know when it comes to crypto investment. The two confusing terms associated with crypto include Bitcoin and Bitcoin cash.
If you want to invest in crypto, it is essential to have a bit of understanding about both these terms. Through this informative piece of article, we will help you understand the difference between them.
As per experts, both these cryptocurrencies contain the same ingredients, and they are also made up of the same white paper, mining algorithm, and reward system. In the current scenario, both these terms are household names. Bitcoin, as well as Bitcoin cash, are accepted as digital currencies all over the world. But as a new crypto investor, you should try to understand the difference between these digital currencies. In addition to fundamental differences, there are also technical differences between these terms.
Bitcoin is one of the most known and trusted cryptocurrencies. Currently, it is known as digital gold. Most investors are comparing bitcoin with gold in the crypto world. Due to the immense liquidity feature, Bitcoin is highly tradable compared to other currencies.
Bitcoin cash is a standalone digital currency. It came into effectiveness in August 2017, and it is an offshoot of Bitcoin. It is similar to Bitcoin in several ways. But, it works through a different blockchain. It also makes use of separate rules and regulations for its working.
While these digital currencies sound similar, they are different in various ways. Following are the significant difference between Bitcoin and Bitcoin cash:
One of the most significant differences is that bitcoin's value is higher than Bitcoin cash. But, both these digital currencies are witnessing an appreciation in their value.
As compared to Bitcoin, the transaction cost of Bitcoin cash is lower. In addition to this, it can also transfer data faster. Thus, more people can use Bitcoin cash. But, when it comes to the trustability feature, Bitcoin is undoubtedly the winner.
The smallest block size of Bitcoin cash currently stands at 32 MB; on the other hand, bitcoin's block size is 1 MB. Thus, it makes Bitcoin cash more scalable. And people can carry on more transactions per minute. It is also less harmful to the environment, and thus, it is more viable. When it comes to Bitcoin cash, almost 200 transactions can be processed per second.
They both use different algorithms. Thus, the difference in the algorithm prevents the possibility of any repetition between these two blockchains. The safety mechanisms are also different with regards to both these digital currencies. The algorithms are different. Thus, it ensures that both the blockchains can coexist without any issues in case of any split.
Bitcoin does not support smart contracts. On the other hand, Bitcoin cash developers have created a mechanism through which smart contracts are possible.
For issuing tokens through the Bitcoin blockchain, they use the Omni layer. The Omni Layer is a platform that can trade digital assets and currencies. The Simple Ledger Protocol or the SLP protocol is used regarding Bitcoin cash.
Bitcoin comes up with an innovative feature called the replace-by-fee feature. As per this feature, the unconfirmed transactions are cancelled. The protocol of Bitcoin Cash to clear away this feature helps the cryptocurrency become more secure.
It also helps in quick transactions even when the amount is low. The protocol has seen an upgrade in May 2021. As per the upgrade, the transaction limit initially set for 50 was no longer valid.
But, when it comes to Bitcoin cash, it helps in high volume and small-value transactions within a limited duration.
Most of us have heard about Bitcoin. But, the term Bitcoin cash was still new to people. We are hopeful that this article will help you understand the fundamental difference between these terms. No doubt, if it's Bitcoin cash or Bitcoin, both these terms are gaining prominence because of more acceptance of digital currencies. There are top notch reasons behind the ultimate use of Bitcoins.