Bitcoin vs Bitcoin Cash – Introduction
You’ve probably heard about Bitcoin (BTC). You just need to access any investment website to see daily news about BTC. Have you ever heard about Bitcoin Cash (BCH)? Do you know the differences between BTC and BCH?
At this moment, BTC price is over $48,500, while BCH is over $446. In other words, there is a huge difference between the prices of BTC and BCH, even though both are quite similar.
However, some investors prefer investing in BCH to BTC. There are several reasons why they prefer one coin than the other, but it will depend on what kind of investor you are and what you intend to get by investing in cryptos.
In this article, we’ll help you to understand the differences between BTC and BCH. You’ll learn the different purposes from each other, which type of investor prefers BTC or BCH, as well as what to do to start investing in these cryptocurrencies. Let’s dive in!
What is Bitcoin Cash
Breakthrough Technologies, for example, blockchain has allowed BTC to achieve its fame and high value. Blockchain is a technology used by BTC to record its users’ data, especially information about its price, purchase, sale, and other types of transactions. (Would you like to learn more about what blockchain is? See here)
However, BTC blockchain has a fundamental limitation: transactions are slow and limited. Yes, it’s true that the BTC blockchain is quite secure and it has a high degree of stability, but it suffers because of its limited scalability.
BCH has been created because of all BTC blockchain problems. A team of miners and developers created this digital currency looking for a solution for the BTC scalability problem.
In general, besides a new blockchain, BCH news was allowing larger blocks in this technology, as well as a new information security tool – hard fork.
In 2017, after a period of testing, BCH was launched on August 1 and quickly catched tired investors about BTC’s limitations and interested in diversifying their e-wallets.
In addition to these features, there are also significant differences in BTC and BCH purpose and prices. Below, we’ll show you more about these differences.
Bitcoin vs Bitcoin Cash – Purpose
In the crypto world, each digital currency launched on the market is always followed by a group of principles and values that will guide its development. These principles are always considered by investors when creating their crypto e-wallets. (Would you like to learn how the cryptocurrency market works? Read more information here)
In BTC’s case, it was launched on the market with the goal of promoting the decentralization of the market for investments (in other words, without government and financial institutions support), as well as other features such as: providing highest freedom and security while using investor’s money.
All these values are also shared by BCH. However, due to the BTC’s technical limitations already mentioned, many investors and analysts believe that BTC has become an asset exclusive for investment purposes and not an asset for use in daily transactions.
In fact, all crypto investors know that transactions are slow in BTC blockchain, that’s why it’s not indicated for those who need to accomplish daily transactions.
As we’ve said, Bitcoin’s scalability is limited. Therefore, BCH’s purpose is to solve BTC’s limitations through some important points:
- Provide faster and cheaper transactions;
- Make crypto use easier in daily transactions;
- Provide higher cryptocurrency scalability;
- Become an alternative to BTC.
It’s also worth mentioning that the BCH platform suffered a division in November 2018 creating the BCH ABC and BCH SV (Satoshi Vision). The first one is the digital currency that we’re talking about in this article.
The second one was named BCH SV because it’s close to the original Satoshi Nakamoto’s values, BTC’s creator. The currency is still available on the market and it has a good price for trading.
There are still other important differences between BTC and BTC. We’ll show you them in the next section. Let’s get it started!
Major differences
The major differences between BTC and BCH is the technology used in both of them. For a better understanding, we’ll introduce you some of them:
- Largest information blocks in the blockchain: BTC information platform blocks have a 1MG limit, which generates several platform limitations. On the BCH platform, blocks have a largest limit, ranging from 8MB to 32MB. In practice, this difference has very positive consequences: while the number of BTC transactions per block is estimated at around 1,000-1,500 (in 2018), the number of BTC transactions is around 25,000 per block;
- DeFI (Decentralized Finance): Both digital currencies desire to achieve DeFI, but BCH has been looking to implement DeFi tools as a way to compete with BTC and Ethereum (ETH);
- Token issuance: BCH platform allows the tokens issuance through its Simple Ledger Protocol (SLP). This feature makes the BCH platform similar to ETH platform. In addition to token issuance, BCH also supports non-fungible tokens (NFTs), it’s a very attractive trading asset for new investors;
- Transaction recovery fund: This is also an important difference between BTC and BCH platforms. On the BTC platform, if a transaction is not confirmed and ends up being stuck, it’s possible to exchange it for a similar one, all you need to do is pay a higher fee for a new transaction. For some investors, this type of movement is interesting, once it allows faster transactions. However, there are those who complain about fraud and other issues. Therefore, on the BCH platform, this type of movement is no longer possible.
Now that you’ve learned the major differences between both cryptocurrencies, we’ll also teach you what type of investor prefers BTC to BCH, and vice versa. Stay tuned!
What type of investor buys BTC or BCH
The first thing you should keep in mind is that it’s possible to have BTC and BCH in your e-wallet. But, first of all, it’s necessary to understand the role of each of the cryptos when depositing them to your e-wallet.
BTC has been used as a currency to add value to your e-wallet. Despite its oscillations, this crypto has high value, it’s used by a lot of investors who want to keep it as long as they can to get its increase. In other words, BTC is often used as a long-term asset strategy.
BCH is an asset sought after by investors who need to make frequent transactions, and therefore they need to pay cheaper fees as well as easier and faster transactions. In addition, it’s always worth remembering all the advantages that we have already explained about BCH. (Take a look at our guide to create a cryptocurrency investing strategy).
In the end, both currencies can be introduced in any type of investment strategy. However, it’s important to analyze their volatility into your e-wallet.
If you’d like to learn how to buy your first BTC or BCH, you should keep reading, because we’ll teach you all the step by step needed to make your first trading.
How to buy BTC or BCH
You must follow the same purchase process as any other crypto for buying BTC or BCH. If you have never purchased a cryptocurrency, you need to follow the step by step:
- Look for an exchange that intermediates the purchase and sale of BTC or BCH. (Do you still don’t know what an exchange is? Exchanges are financial institutions and brokerages that are responsible for intermediate the purchase and sale of cryptocurrencies. Learn more here);
- Register and create your account;
- Include credit in fiat to carry out your transactions;
- Then, include your purchase order in the market price and make it, after that, you should wait until it’s done. Then, you have to transfer the money to your e-wallet. There are several compatible e-wallets with these currencies.
You must find out which option is best for you. It’s possible to have a multiple crypto e-wallet to store your BTC and BCH. (If you’d like to learn more about multiple cryptocurrencies e-wallets, you can click on the link).
If you haven’t any experience in crypto investment and you’d like to learn on how to invest in this market, we recommend this article.
Bitcoin vs Bitcoin Cash – Conclusion
In this article, you should have learned a lot of things about BTC and BCH. Below, we’ll show you importants points already seen here:
- BCH goal is overcome certain BTC platform limitations;
- BTC platform has limited scalability and transaction speed;
- BCH platform solves BTC limitations by allowing larger blocks of information in the blockchain;
- BCH stands out for its transactions speed and higher scalability than BTC;
- BTC and BCH defend the same crypto philosophy, but their technique is different from each other;
- You can invest in both currencies and deposit them in your e-wallet;
- It’s possible to use BTC and BCH in different investment strategies. But, first of all it’s necessary to get information about crypto volatility and what is the role of each of them in your investment strategy.
Before investing in any asset, you have to make sure you learn as much as possible about how such investment works. Moreover, if you’re a beginner in the cryptocurrency market, you should start investing a small amount and, then, you should increase your investment bit by bit.
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