Bitcoin Cash has become the most successful fork of Bitcoin. In addition, some services and user groups are even leaving the Bitcoin blockchain and switching to BCH. So why is Bitcoin Cash so in demand? What is the difference between the two cryptocurrencies that we want to look at in this cryptocurrency overview?

date of introduction

Bitcoin is the first financial asset that opened the door to the world of cryptocurrencies. It was introduced on January 3, 2009. Hardly anyone knew about it in the early years as few people understood the technology. However, over the years, BTC has become the most popular cryptocurrency in the world.

Bitcoin Cash was launched on August 1, 2017, when almost the whole world was already aware of the cryptocurrency phenomenon. Eight years passed between the launch of the two currencies, which explains the light BCH versus the BTC system. However, BTC cryptocurrency exchange still has more followers than BCH.

Block size

The block size was the most important reason for the creation of BCH. As previously reported, transactions in BTC have become slower and more costly. The flow of operations increased, and the Bitcoin blockchain could not cope with processing them, since the 1MB block size had a low range.

The block size was the most important reason for the creation of BCH. As previously reported, transactions in BTC have become slower and more costly. The flow of operations increased, and the Bitcoin blockchain could not cope with processing them, since the 1MB block size had a low range.

The Bitcoin development team didn’t want to increase the block size, although that was the only option at the time. As a result, a group of miners and developers launched BCH with a block size of 8MB. In addition, the new protocol allows the block size to be increased as needed. The block size of BCH was increased to 16 MB in late 2017 and to 32 MB in 2018. If there are again problems with the transaction processing speed, the BCH development team will increase the block size to 64 MB.

problem of scalability

Bitcoin block size allows to process no more than 7 transactions per second. That is catastrophically little today, considering that BTC is used all over the world, including in Germany. Many ideas have been put forward to solve the scalability problem, e.g. e.g.:

Bitcoin block size allows to process no more than 7 transactions per second. That is catastrophically little today, considering that BTC is used all over the world, including in Germany. Many ideas have been put forward to solve the scalability problem, e.g. e.g.:

• SegWit-Softfork;
• Hardforks;
• Lightning-Network-Protocol.

Bitcoin Cash’s solution is much simpler – increase the block size every time it’s needed. So, the ratio of BCH and CHF shows that Bitcoin Cash will never have scalability issues, but there might be security issues in the future.

Smart Contracts

It wasn’t originally intended for Bitcoin or Bitcoin Cash to use smart contracts. However, nowadays technology has become a very important part of life and hence some smart contracts with limited functionality have still been introduced. Bitcoin-based smart contracts are key:

• Bequest – Funds are forwarded to heirs when the wallet is inactive;
• multiple signatures;
• Escrow – a third party must unlock funds under a smart contract;
• Safe – Funds are frozen in the wallet until a specified date.

Mining Profitability

The algorithm and security protocol for both cryptocurrencies are the same, and thus miners have to use a lot of computing power to create new blocks and verify transactions. Also, the reward for each block is the same – 12.5 koins. However, there is one key difference. The mining complexity for BTC is recalculated every 2016 blocks, while for BCH it is recalculated every six blocks. Therefore, mining BCH looks more attractive.

Source: Plato Data Intelligence: PlatoData.io