What is a cryptocurrency?

Digital rain banner gif - from Wikimedia Commons

Money like the US dollar is issued by the US government and is controlled by banks. When you transfer dollars to a friend, the bank has to approve and process the transaction this is an example of a "central authority" money.

Crypto or digital currencies are not issued or controlled by any central authority.

As of May 2021, Bitcoin is the most valuable cryptocurrency currently on the market. While other currencies are attempting to outrank Bitcoin, Bitcoin Cash sees the potential of there being different types of currencies for different uses.

Note: Nothing in this article is financial advice! You should always consult a financial advisor before investing. This comparison was based on content from Investopedia and BitDegree, if you would like to view more detailed information about cryptocurrency key terms and how to invest.

Origins

Bitcoin (BTC)

Created in 2009

Bitcoin was the first-ever cryptocurrency and for many years it wasn’t very known. It is just like any other real currency. You can use it to buy, sell and trade for goods, services, investments, and more.

The total number of Bitcoin that will ever exist is limited to 21 million. Even though there is already over 16 million Bitcoin, it’s going to be a long time until the count of Bitcoin reaches 21 million!

Bitcoin being launched into space like a rocket

Bitcoin Cash (BCH)

Created in 2017

The Bitcoin Cash blockchain was officially launched on 1st August 2017. Just like Bitcoin, the Bitcoin Cash supply is limited to 21 million coins and each block takes 10 minutes before it is confirmed.

Some miners and developers of Bitcoin initiated what is known as a "Hard Fork" (update that only some people accepted) effectively creating a new currency: BCH

The main reason behind this Bitcoin split was because Bitcoin transaction fees were becoming too expensive. In fact, in what started as less than a cent in 2009, it quickly increased to a few dollars per transaction.

Quiz

Which of these cryptocurrencies have higher transaction fees?

Bitcoin (BTC)

Bitcoin Cash (BCH)

Both have the same fees

Neither has fees

Compare Values Over Time

Bitcoin (BTC)

April 2021, CNBC estimates Bitcoin makes up 50% of investments in the Digital Currency Market and is considered the Gold standard of a rapidly growing industry.

Bitcoin Cash (BCH)

It is cheaper and easier to trade, people will likely switch to using BCH as their cryptocurrency for everyday transactions. Some people see BCH as a solid investment to hedge against Bitcoin if it loses its market dominance.

Quiz

Which of these cryptocurrencies was worth more in March 2021?

Both are the same

Bitcoin (BTC)

It is impossible to know

Bitcoin Cash (BCH)

Compare The Technology

Both use blockchain technology where transactions are verified by computers (called mining) that can be owned by anyone and protects it from counterfeiting.

Bitcoin (BTC)

Bitcoin is very limited in this sense as it can only process an average of 7 transactions per second.

If it is going to be used as a global payment system, it must improve its performance as more people use the currency.

  • Bitcoin is limited by transaction processing time, an issue that has caused division within the bitcoin mining and developing communities.

  • Bitcoin blocks are limited to 1 MB

Satoshi Nakamoto is the name used by a person or persons who developed Bitcoin, authored the bitcoin white paper, the first Blockchain database, and created and deployed Bitcoin's original program.

Bitcoin Cash (BCH)

The Bitcoin Cash network can handle many more transactions per second than the Bitcoin networkcan, meaning that wait times are shorter and transaction processing fees tend to be lower.

  • BCH has a larger block (file) size to accelerate the verification process, with an adjustable level of difficulty to ensure the chain’s survival and transaction verification speed, regardless of the number of miners supporting it.

  • BCH blocks are up to 32 MB

Crude oil pump with circuit board below the soil symbolically showing bitcoin mining

Quiz

What does a block in "Blockchain" mean?

Another name for a file

Another word for sale

Ways To Get These Cryptocurrencies

Bitcoin Cash and Bitcoin are mined in the same way, every time a computer is used to verify a transaction, trade, or sale; they are rewarded with "tokens" another word for cryptocurrencies.

Mining Bitcoin Cash makes much less profit than mining Bitcoin with the same equipment because Bitcoin is more valuable.

Some of the most popular places to buy both Bitcoin and Bitcoin Cash are Coinbase or Simplex.

Important note: Always do further, independent research, and always consult a financial investor before investing. Also, keep in mind that it's crucial to keep your cryptocurrencies in secure digital wallets, such as Ledger Nano STrezor Model T, and Coinbase.

Quiz

Can you mine Bitcoin using a average personal computer or laptop?

Yes you can

It was possible but not anymore

Environmental Impact

All cryptocurrencies generate huge volumes of carbon emissions.

A single transaction of Bitcoin, for example, has the same carbon footprint as 680,000 Visa transactions or bingeing YouTube for 51,210 hours. Creating the average token will generate around 200 kg of carbon, the equivalent of driving 500 miles in the average gas-powered car.

Some of this energy is from renewable sources but mining is often done in the least expensive ways to increase profits.

Windmills

What Are The Challenges?

Bitcoin (BTC)

  • Bitcoin is olderslower, and costs a lot more per transaction.

  • It is likely that as the sector grows, Bitcoin will continue to lose its dominance over these other coins.

  • The core development team of Bitcoin appears to be divided as a group and lacking clear leadership compared to other crypto teams, like Ethereum.

  • If the Bitcoin developer community doesn’t agree to an update to the Bitcoin code to fix its problems, Bitcoin might lose in the war between BTC VS BCH.

    bitcoin next to goldPhoto by Aleksi Räisä on Unsplash

Bitcoin Cash (BCH)

  • Bitcoin Cash is newer, less popular, and does not have as much investor confidence as Bitcoin.

  • BCH has fewer trading pairs than BTC, making it less tradeable than Bitcoin. This contributes to its lower price.

  • BCH has a larger block size which could lead to weaker security compared to the Bitcoin network.

  • People confuse Bitcoin and Bitcoin Cash. due to the similar names and branding.

The confusion has also led to Bitcoin Cash receiving negative attention as a copycat currency that is simply a cash grab, aimed at tricking new crypto investors into buying a fake Bitcoin. This, however, is not true.

Quiz

Which cryptocurrency has 50% of the of the Digital Currency Market?

BCH

BTC

Take Action

Can you answer the questions below?

This comparison was based on content from Investopedia and BitDegree , if you would like to view more detailed information about cryptocurrency ket terms and how to invest.

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This Byte has been authored by

KD

Kassie Dwarika

Director of Content Programs | Debate Coach