Is Crypto Cash King? Explaining the Bitcoin Cash Cryptocurrency 

When the pseudonymous Satoshi Nakamoto first described Bitcoin (BTC) in 2008, they used the phrase “electronic cash system” to describe its primary use case. Although BTC works as a peer-to-peer (P2P) virtual currency, some crypto traders complain of slow confirmation speeds and high transaction fees, especially during high traffic. This increased frustration over Bitcoin’s scalability led to many intense debates and different proposed solutions, including a new blockchain called Bitcoin Cash (BCH). 

Despite their shared name, vision, and history, Bitcoin and Bitcoin Cash are distinct entities in the decentralized web. Traders must understand the nuances between BTC and BCH before buying, transferring, and using these crypto assets. 

A brief history of Bitcoin Cash

The idea for Bitcoin Cash emerged in 2017 as Bitcoin gained increased media attention following a major price surge. Those favoring the Bitcoin Cash model proposed increasing Bitcoin’s average storage capacity from 1 megabyte (MB) per block to 8 MB to process more transactions per second (TPS). Developers opposing this idea favored using an upgrade called “Segregated Witness” (SegWit) to re-arrange data storage on Bitcoin’s blockchain rather than introducing a block size increase.  

As most of the Bitcoin community moved forward with SegWit, a group of programmers who believed in increasing BTC’s storage capacity created the separate blockchain “Bitcoin Cash” based on Bitcoin’s code. 

Initially, Bitcoin Cash had a data capacity of 8 MB per block, but it jumped to 32 MB capacity following a 2018 upgrade. This increased storage size aims to give Bitcoin Cash faster average speeds and lower transaction fees compared with Bitcoin. Bitcoin Cash reportedly can process 200 TPS, with average fees of a few cents, compared to Bitcoin’s 7 TPS and average fees of a few dollars.

How does Bitcoin Cash work? 

Bitcoin Cash is a “hard fork” upgrade of the Bitcoin blockchain, which means it uses the same coding architecture on BTC but introduces backward-incompatible upgrades. The defining difference between Bitcoin and Bitcoin Cash is the latter’s larger block size, which requires computers on the network (aka nodes) to change their software if they want to process BCH transactions. 

Besides the block size increase, Bitcoin Cash shares most of the features on Bitcoin, including a Proof-of-Work (PoW) consensus algorithm where nodes compete every 10 minutes to solve algorithmic puzzles, post new transactions, and receive BCH rewards.  

Bitcoin Cash FAQs

How do traders distinguish Bitcoin versus Bitcoin Cash?

Besides their name differences, there are a few telltale signs traders use to confirm they’re looking at the Bitcoin Cash coin price rather than Bitcoin. First, the ticker for Bitcoin Cash is BCH, while Bitcoin’s is BTC. The globally recognized symbol for Bitcoin is an orange circle with a “₿” tilted to the right, while Bitcoin Cash has a green color with a “₿” tilted to the left. It’s also more likely to find Bitcoin higher on a crypto exchange’s list of supported coins versus a Bitcoin Cash price chart due to BTC’s larger market cap and higher liquidity. 

Where do traders buy Bitcoin Cash? 

Bitcoin Cash isn’t as widely accessible as Bitcoin, but it’s often available on cryptocurrency exchanges like Coinbase. Many Bitcoin ATMs also include Bitcoin Cash price conversions for crypto traders who want to purchase BCH. 

Does Bitcoin Cash work on Bitcoin wallets? 

Although their stories are intertwined, Bitcoin and Bitcoin Cash use incompatible coding standards. Therefore, when traders send BCH to a BTC wallet—or vice versa—they lose their cryptocurrency. 

Disclosures

The content of this article (the “Article”) is provided for general informational purposes only. Reference to any specific strategy, technique, product, service, or entity does not constitute an endorsement or recommendation by dYdX Trading Inc., or any affiliate, agent, or representative thereof (“dYdX”). Use of strategies, techniques, products or services referenced in this Article may involve material risks, including the risk of financial losses arising from the volatility, operational loss, or nonconsensual liquidation of digital assets.  The content of this Article does not constitute, and should not be considered, construed, or relied upon as, financial advice, legal advice, tax advice, investment advice, or advice of any other nature; and the content of this Article is not an offer, solicitation or call to action to make any investment, or purchase any crypto asset, of any kind.  dYdX makes no representation, assurance or guarantee as to the accuracy, completeness, timeliness, suitability, or validity of any information in this Article or any third-party website that may be linked to it.  You are solely responsible for conducting independent research, performing due diligence, and/or seeking advice from a professional advisor prior to taking any financial, tax, legal, or investment action.

You may only use the dYdX Services in compliance with the dYdX Terms of Use available here, including the geographic restrictions therein.

Any applicable sponsorship in connection with this Article will be disclosed, and any reference to a sponsor in this Article is for disclosure purposes, or informational in nature, and in any event is not a call to action to make an investment, acquire a service or product, or purchase crypto assets.  This Article does not offer the purchase or sale of any financial instruments or related services.

By accessing this Article and taking any action in connection with the information contained in this Article, you agree that dYdX is not responsible, directly or indirectly, for any errors, omissions, or delays related to this Article, or any damage, injury, or loss incurred in connection with use of or reliance on the content of this Article, including any specific strategy, technique, product, service, or entity that may be referenced in the Article.