Bitcoin vs. Bitcoin Cash: Investor’s Guide 2024

Bitcoin vs. Bitcoin Cash: Which Should I Choose?

Bitcoin is the best choice for investors. While Bitcoin Cash was designed as a ‘technical improvement’ on the Bitcoin blockchain, Bitcoin Cash has failed to live up to its lofty promises.

What is Bitcoin?

Bitcoin is the world’s first and most famous cryptocurrency, created in 2009 by an anonymous founder known as Satoshi Nakomoto. Bitcoin uses blockchain technology to facilitate peer-to-peer transactions without the need for middlemen. 

Bitcoin famously has a limit of 21 million units — meaning that the cryptocurrency holds appeal for investors as ‘digital gold’ and a hedge against inflation. 

How does Bitcoin work? 

Bitcoin uses a consensus mechanism known as Proof of Work (PoW). 

In a POW blockchain, miners solve complex mathematical problems to validate transactions and ensure the security of the network. Bitcoin mining is considered secure but slow — with transactions often taking up to 10 minutes to be approved. 

What is Bitcoin Cash?

Bitcoin Cash is a ‘fork’ of Bitcoin that was created in 2017. 

Bitcoin Cash was designed to fix some of the limitations of the Bitcoin network by increasing block size — essentially allowing more transactions to be stored in each block and enhancing speed and scalability. 

Similar to its predecessor, Bitcoin Cash also has a fixed supply of 21 million units. 

How does Bitcoin Cash work?

Just like Bitcoin, Bitcoin Cash uses the Proof of Work consensus mechanism. 

Bitcoin Cash allows more transactions to be stored in each individual block — changing the size of each block from 1MB to 32MB. This allows Bitcoin Cash to process as many as 200 transactions per second — which makes it a more practical cryptocurrency to use in everyday transactions. 

What is Bitcoin Cash used for? 

Bitcoin Cash was intended to be a peer-to-peer electronic cash system, facilitating quick and cheap transactions. 

Potential use cases for Bitcoin Cash include: 

• Buying groceries & other ‘everyday’ purchases 
• ‘Tipping’ creators & other micro-transactions

However, Bitcoin Cash has not yet seen widespread adoption. 

Why is Bitcoin Cash cheaper?

The price of a single unit of BCH, as well as overall market capitalization, is significantly lower than BTC. 

While Bitcoin is widely recognized and used, Bitcoin Cash has struggled to build a similar level of trust and acceptance in the crypto ecosystem. 

Bitcoin Cash Pros & Cons

Let’s walk through some of the pros and cons of Bitcoin Cash. 

Pros:

• Faster transaction times due to larger block size
• Lower transaction fees
• Fully decentralized network (like Bitcoin) 

Cons:

• Lower adoption and demand compared to Bitcoin
• Less secure and established network

Why did Bitcoin Cash fail to gain traction? 

When Bitcoin Cash was released in 2017, some commentators claimed that the cryptocurrency would eventually overtake BTC. However, BCH has failed to live up to its lofty expectations for the following reasons: 

• Bitcoin loyalists: Many Bitcoin investors are loyal to BTC and are unwilling to switch to a new blockchain. 
• Lightning Network: Solutions built on the Bitcoin blockchain — such as the Lightning Network — are designed to speed up transaction times and do not require users to switch to a new blockchain. 
• Less security: Because there are less miners on the Bitcoin Cash blockchain than Bitcoin, transactions are less secure. 

How to Buy Bitcoin or Bitcoin Cash

Let’s discuss how you can buy Bitcoin or Bitcoin Cash. 

1. Choose an Exchange: Select a reputable cryptocurrency exchange that offers BTC/BCH, such as Coinbase or Kraken.
2. Create an Account: Sign up and verify your identity. While this process usually takes a few minutes, it may take 1-2 days to confirm your identity. 
3. Deposit Funds: Add a payment method to fund your purchase. 
4. Buy Bitcoin: Search for Bitcoin and/or Bitcoin Cash, then confirm the order. 

In conclusion 

While Bitcoin Cash was created in 2017 amidst much fanfare, the project has failed to gain a significant foothold in the crypto market. Meanwhile, Bitcoin has continued to build value and attract new users as the world’s #1 cryptocurrency.