Bitcoin vs Bitcoin Cash is a battle that has been raging for over a year now. What was once a community of one – Bitcoin – split into two via a hard fork in 2017. The debates surrounding these coins often get heated and tribal. This article will explore what led to such division and the key differences between Bitcoin and Bitcoin Cash.
How did we get here?
Bitcoin was set up to handle block sizes of 1MB. As more and more people use the network, these block sizes can fill up the memory pool, causing transactions to be delayed. To increase the speed of transactions, people could choose to pay a more expensive fee to fast-track their transaction. This can mean that Bitcoin transactions can become expensive relative to what they used to be.
This is an issue caused by Bitcoin’s scalability problems. Scalability isn’t an issue just for Bitcoin either – many other cryptocurrencies do or will face similar problems.
Solutions to this issue for Bitcoin split into two camps. One was focused on an off-chain second-layer solution. This became known as the Lightning Network.
The other solution was on-chain, through an increase in the block size.
How was it resolved?
Debates, discussions, and arguments raged between the community about the best path to follow. A solution was supposed to have been found in the New York Agreement at Consensus in 2017. The New York Agreement was signed by 50 companies who agreed to introduce SegWit, a small scaling solution that also allowed for the Lightning Network and a doubling of block size to 2MB. This became known as SegWit 2X.
Yet the New York Agreement wasn’t to everyone’s liking. The idea that a group of people (largely companies) behind closed doors could determine the path that Bitcoin was going to take didn’t sit well with the community. A UASF movement sprung up on Twitter that argued Bitcoin should use a soft fork to activate SegWit and not increase the block size limit.
Why are people against increasing the block size?
A block size increase had to be incorporated through a hard fork. Hard forks can be extremely risky to the survival of the network. However, the bigger argument against a bigger block size is the fear of losing decentralisation.
Larger blocks can make full nodes more expensive and harder to operate, which means that centralised entities can gain more power over the network. This leads to a lot of trust being placed within these centralised entities. If a single miner controls too much of the hash rate, then the whole network can be figuratively placed under their thumb.
Arguments against the Lightning Network
For many Bitcoin Cash supporters, the Lightning Network is a complicated and convoluted solution that is entirely unnecessary. Another key criticism that comes from Bitcoin Cash supporters is that the Lightning Network will never work and leads to more centralisation. Lightning Network supporters have often said that the technology is around two years away and there is still much work to be done.
Key differences between Bitcoin vs Bitcoin Cash
Clearly, the biggest difference between the two is the way they plan to scale in the future. Bitcoin has taken the approach of a second-layer solution and Bitcoin Cash has chosen to increase the block size.
This has led to a split in the development teams as well. Bitcoin is supported by Bitcoin Core, a group of unpaid developers who throughout the years have consistently made improvements to the underlying code.
The developers of Bitcoin Cash are split into two camps at the moment: ABC, which is being led by Amaury Séchet, and Bitcoin Unlimited, led by Peter Rizun. There was some controversy earlier this month when Amaury Séchet left the development of Bitcoin Unlimited as well.
Bitcoin Cash was also supported by Craig Wright and Calvin Ayre until they decided to fork from BCH and create Bitcoin Satoshi’s Vision.
Bad blood
There is plenty of bad blood between the two camps, with smears and arguments being thrown about constantly. It is unlikely that either will ever break bread with each other again.
Many on the Bitcoin side view Roger Ver’s claims that Bitcoin Cash is the real Bitcoin to be fraudulent in nature, duping new investors into investing into BCH through wordplay.
On the other side, many of the Bitcoin Cash camp have claimed that Bitcoin is under the rule of Blockstream. There is a conspiracy theory that Blockstream is in the pockets of major banks and organisations who want to see it fail.
Bitcoin vs Bitcoin Cash: Conclusion
For new people entering the cryptocurrency industry, it can be confusing to see why there are now multiple versions of Bitcoin. This confusion is increased when trying to analyse the differences between them.
Simply put, Bitcoin and Bitcoin Cash both have different ideas on how to make Bitcoin usable for increased traffic. Bitcoin has chosen a second-layer solution in the Lightning Network, and Bitcoin Cash has chosen a block size increase.
Time will tell who is right. Currently though, Bitcoin has remained the dominant cryptocurrency and doesn’t appear to be close to losing that crown any time soon.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.