Introduction
Bitcoin (BTC) is the biggest name in cryptocurrency, having brought digital currencies, blockchain, and decentralised finance (DeFi) to the mainstream. A passionate community has continuously championed Bitcoin, but that doesn’t mean everyone agrees on what it’s supposed to be.
Internal tension came to a head in 2017, with Bitcoin supporters divided into two camps over the issue of scalability. One group supported expediting transaction processing through Layer-2 blockchains. The other wanted to expand the size of blocks on Bitcoin’s blockchain. No compromise could be reached, leading to a ‘hard fork‘ that created a new token: Bitcoin Cash (BCH). Let’s find out how this fork happened and what differentiates Bitcoin from Bitcoin Cash.
Key Differences Between BTC and BCH
Bitcoin Overview
Bitcoin was the world’s first cryptocurrency, which was released as open-source digital software. In October 2008, Satoshi Nakamoto, the pseudonymous creator of Bitcoin, published the famous white paper entitled ‘Bitcoin: A Peer to Peer Electronic Cash System’ and launched the decentralised public ledger on 3 January 2009. Nakamoto eventually transferred Bitcoin’s network alert key and code repository control to Gavin Andresen, who became the Lead Developer for the Bitcoin Foundation. Countless developers have worked on Bitcoin’s infrastructure over the years, and upgrades require consensus from the broader community.
Bitcoin was created as a digital currency for peer-to-peer (P2P) electronic transactions without relying on central authorities like banks or world governments. Furthermore, Bitcoin has a capped supply of 21 million coded into its protocol to prevent inflation and act as a secure store of value. With Bitcoin, everyone has access to a reliable currency, facilitating free market competition on a global scale.
Unfortunately, scalability problems arose between 2016 and 2017, as Bitcoin became increasingly unreliable and expensive with increasing transaction volumes. In 2017, network congestion led to high transaction fees and slow processing times, rendering Bitcoin ill-suited for everyday transactions.
To resolve the scalability problem, the Bitcoin community activated a protocol upgrade called ‘Segregated Witness’ (or SegWit) as a soft fork to the Bitcoin protocol to enable a second-layer solution for scaling in 2017. SegWit enables the development of Layer-2 blockchains like the Lightning Network, reducing the main blockchain’s computational load by outsourcing data off-chain. Some Bitcoin supporters disagreed with this approach.
SegWit faced considerable opposition from miners, developers, and others who wanted to keep fees low. Led by early Bitcoin advocate Roger Ver and a Chinese Bitcoin hardware manufacturer named Bitmain, SegWit’s opposition believed SegWit helped Bitcoin speculators more than people who saw BTC as a medium of exchange. The opposition’s favoured scalability solution was increasing Bitcoin’s block size from one megabyte (MB) to eight, with future upgrades increasing it further.
Check out Bitcoin’s current value and recent price trends.
Bitcoin Cash Overview
Due to the unresolvable disagreement on how to scale Bitcoin, a hard fork occurred on 1 August 2017, creating the new Bitcoin Cash parallel to the original Bitcoin. All BTC holders received an equivalent amount of BCH, and the two blockchains were identical until 7 August 2017. Bitcoin Cash launched with an eight-megabyte block size limit, which increased to the current 32 MB, enabling it to process larger amounts of transactions per block. The relationship between BTC and BCH advocates was contentious as the two groups competed for hash power. BTC proponents claimed BCH was a scam, while BCH supporters described their token as the ‘true’ Bitcoin because it remained consistent with Satoshi Nakamoto’s original vision.
After the hard fork, Bitcoin found far more hash power and community support than Bitcoin Cash. Two subsequent hard fork splits of Bitcoin Cash also fractured its community. On 15 November 2018, Bitcoin Cash split into two — Bitcoin Cash ABC (still keeping the name of Bitcoin Cash) and Bitcoin SV (BSV) — when Craig Wright and others argued that BCH had lost sight of Satoshi’s Vision (SV). Bitcoin Cash ABC (BCHA) was created by a hard fork in November 2020, adding an 8% miner’s tax distributed to network developers. Bitcoin Cash is criticised as a centralised cryptocurrency because a few people control most of the network’s tokens and hashrate.
Check out Bitcoin Cash’s current value and recent price trends.
Ecosystem Comparison: BTC and BCH
BTC and BCH’s Consensus Mechanisms
Bitcoin pioneered the Proof of Work (PoW) consensus mechanism. Miners compete to add blocks to the blockchain and claim a reward. Each block includes new transactions and a mathematical proof of work. These proofs come through trial and error, so miners use specialised hardware capable of thousands of calculations per second to be the first to solve a block. The difficulty of the proofs is adjusted to maintain a consistent rate of about one block every 10 minutes.
Miner rewards come from transaction fees and newly minted bitcoins. Bitcoin users choose their transaction fee, with larger fees incentivising miners to include their transaction in the next block. The amount of new bitcoins awarded per block decreases over time through halving events and will eventually stop once miners release 21 million BTC. PoW secures the network but processes transactions slowly, averaging seven transactions per second (tps).
Bitcoin Cash uses the same PoW consensus mechanism as Bitcoin, with one minor adjustment. At first, BTC and BCH used the same ‘difficulty adjustment algorithm (DAA)’ to adjust the mathematical proofs and maintain 10-minute block times. Bitcoin Cash then added an ‘emergency difficulty adjustment algorithm (EDA)‘ that decreased mining difficulty by 20% if the time difference between six successive blocks was greater than 12 hours. Unfortunately, the EDA made mining unstable and was removed on 13 November 2017. The BCH DAA now adjusts after every block, instead of Bitcoin’s rate of every 2,016 blocks.
While both protocols use the same PoW consensus mechanism, Bitcoin Cash can theoretically process over 100 tps with its larger block size.
BTC and BCH Scalability
Many traders see scalability as Bitcoin’s biggest issue, with frequent delays in transaction processing and high fees compromising network performance. While Bitcoin Cash addresses these concerns through larger block sizes, its scalability is still lower than that of established payment processors like Visa and altcoins like Solana (SOL). PoW may be part of the problem, as Proof of Stake (PoS) tokens outperform it in tps.
Tokenomics Comparison
BTC Use Cases
BTC pays transaction fees and compensates miners for their work. It also acts as a digital store of value for crypto traders and certain financial products.
Reputable platforms like Crypto.com support Bitcoin, making it one of the most effective ways to purchase other cryptocurrencies. Similarly, Bitcoin’s high liquidity means BTC holders can swap it for fiat currency whenever they wish.
BTC’s Acceptance as a Payment Method
Due to Bitcoin’s popularity, many merchants accept BTC payments. Examples include the National Basketball Association’s Dallas Mavericks, AMC Theatres, and Burger King. If a merchant doesn’t accept cryptocurrency, consumers can still pay with Bitcoin using services like the Crypto.com App.
BCH Use Cases
BCH is the native token of the Bitcoin Cash network for transaction fees and miner compensation. It also acts as a digital value store.
BCH is available on most crypto exchanges but isn’t involved in as many trading pairs as the more established Bitcoin. Traders can still swap BCH for fiat currency, though its lower liquidity means it will often have a higher spread.
BCH’s Acceptance as a Payment Method
Bitcoin Cash markets itself as a better medium of exchange than Bitcoin, but that hasn’t translated into widespread merchant acceptance. BCH is accepted by vendors like LUSH (cosmetics) and NewEgg (electronics), but both accept other cryptocurrencies, as well. BCH can also be used on gift cards from certain vendors.
Key Pricing Moments
Bitcoin is famous for price fluctuations, and Bitcoin Cash has been volatile, too. Below is a quick timeline for each:
Bitcoin — Key Price Events
| July 2010 | The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. |
|---|---|
| 21 February 2014 | BTC drops nearly 90% of its value after exchange Mt. Gox files for bankruptcy. Mt. Gox lost 744,440 BTC deposited by users and couldn’t recover. |
| February 2018 | China bans trading cryptocurrencies like Bitcoin, causing BTC to lose 10%–20% of its value. |
| 2020 | Bitcoin’s price soars 416% to $28,993 due to ongoing concerns about the global economy during the COVID-19 pandemic. |
| March 2024 | Bitcoin reaches its all-time high (ATH) of $73,900.40 after the launch of Bitcoin exchange-traded funds (ETFs). |
| December 2024 | Bitcoin reaches a new ATH north of $100,000, as traders anticipate President-elect Donald Trump’s win in the US presidential election to boost the crypto market. |
| July 2010 | 21 February 2014 |
|---|---|
| The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. | BTC drops nearly 90% of its value after exchange Mt. Gox files for bankruptcy. Mt. Gox lost 744,440 BTC deposited by users and couldn’t recover. |
| July 2010 | February 2018 |
| The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. | China bans trading cryptocurrencies like Bitcoin, causing BTC to lose 10%–20% of its value. |
| July 2010 | 2020 |
| The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. | Bitcoin’s price soars 416% to $28,993 due to ongoing concerns about the global economy during the COVID-19 pandemic. |
| July 2010 | March 2024 |
| The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. | Bitcoin reaches its all-time high (ATH) of $73,900.40 after the launch of Bitcoin exchange-traded funds (ETFs). |
| July 2010 | December 2024 |
| The first BTC trading markets emerge, with Bitcoin prices ranging from US$0.0008 to $0.08. | Bitcoin reaches a new ATH north of $100,000, as traders anticipate President-elect Donald Trump’s win in the US presidential election to boost the crypto market. |
Bitcoin Cash — Key Price Events
| 1 August 2017 | BCH was created and began trading at $294.60. |
|---|---|
| 18 December 2017 | BCH reaches its ATH of $3,525. |
| August 2018 | BCH loses 88% of its peak value due to a bear climate and friction in the Bitcoin Cash community that ultimately led to the split of Bitcoin Cash into Bitcoin SV and Bitcoin ABC (the new Bitcoin Cash). |
| 10 May 2021 | BCH reaches a price of $1,437.96 based on software updates like eliminating the unconfirmed transaction limit, double-spend proof implementation, and a new community improvement proposal system. |
| November 2022–January 2023 | BCH suffers in a bear environment, struggling to maintain a value of $100 for about three months. |
| 1 August 2017 | 18 December 2017 |
|---|---|
| BCH was created and began trading at $294.60. | BCH reaches its ATH of $3,525. |
| 1 August 2017 | August 2018 |
| BCH was created and began trading at $294.60. | BCH loses 88% of its peak value due to a bear climate and friction in the Bitcoin Cash community that ultimately led to the split of Bitcoin Cash into Bitcoin SV and Bitcoin ABC (the new Bitcoin Cash). |
| 1 August 2017 | 10 May 2021 |
| BCH was created and began trading at $294.60. | BCH reaches a price of $1,437.96 based on software updates like eliminating the unconfirmed transaction limit, double-spend proof implementation, and a new community improvement proposal system. |
| 1 August 2017 | November 2022–January 2023 |
| BCH was created and began trading at $294.60. | BCH suffers in a bear environment, struggling to maintain a value of $100 for about three months. |
Performance and Market Metrics
Bitcoin is the No. 1 cryptocurrency by nearly any metric, with a market capitalisation of nearly $1.3 billion and a value per token over ~$100,000 (at the time of writing). Bitcoin’s protocol has established a hard cap supply of 21 million BTC, ensuring demand consistently outpaces supply. The result is an inflation-proof store of virtual value similar to gold.
Bitcoin Cash ranks 20th by market cap (at the time of writing) at over $10 billion. It has the same hard cap of 21 million BCH supply as Bitcoin, making it a scarce resource. However, demand for BCH isn’t as high, and each token currently has a value in the $550 range (at the time of writing).
Developments and Roadmaps: BTC and BCH
Bitcoin’s Roadmap
A broad community governs Bitcoin, so it doesn’t have a clearly defined roadmap like other blockchain projects. Furthermore, Bitcoin developers prefer ‘off-chain’ development through Layer-2 blockchains and other networks instead of working on the core blockchain. As such, improvements to the Lightning Network and bridges to other blockchain ecosystems are more likely than alterations to Bitcoin’s code.
Bitcoin’s Community
Social media engagement can be a leading indicator of sentiment in the crypto community, so keeping tabs on a token’s followers can prove beneficial. Bitcoin has over 7,000,000 X followers and over 7,000,000 on Reddit (at the time of writing), evidence of its large and dedicated following.
Bitcoin Cash’s Roadmap
Like Bitcoin, Bitcoin Cash uses decentralised community governance, so rather than following a set roadmap, proposed updates come from within the community and are accepted or rejected through voting. The token’s plans for the future include increasing block sizes for faster transaction processing and a marketing campaign to grow the user base.
Bitcoin Cash’s Community
BCH has about 12,500 followers on X and 106,000 on Reddit (at the time of writing), indicating a small but passionate following. The Reddit following is probably more indicative of Bitcoin Cash’s user base.
Conclusion: Bitcoin vs Bitcoin Cash
At first glance, Bitcoin may look like the clear winner here — but BCH comes with advantages that make it favourable for some traders. BTC has retained more than half of the network’s hash power since the hard fork, and one BTC is worth much more than one BCH. Bitcoin Cash splintered into three altcoins, while the original Bitcoin is going strong.
Bitcoin is an unparalleled crypto brand, while Bitcoin Cash has less name value. While many crypto traders may choose BTC for price upside potential, BCH’s lower cost of entry may appeal to others. BCH is also more effective as a medium of exchange due to lower transaction fees and faster processing times.
Review a cryptocurrency’s tokenomics, price history, use cases, and development team before purchasing.
Due Diligence and Do Your Own Research
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