In July 2017, a majority of mining pools and companies associated with Bitcoin mining voted to incorporate the SegWit (segregated witness) technology as a means to address the problem of scalability with Bitcoin. Now, there were those who had their reservations about the adoption of the SegWit technology. So, these miners and developers initiated a hard fork in the Bitcoin blockchain on August 1, 2017, effectively creating a new cryptocurrency, Bitcoin Cash.
Being a fork of Bitcoin, Bitcoin Cash is a lot like Bitcoin. However, there exist certain subtle, yet important differences between the two. Here’s a comparative between the two:
While the comparison between the two can be drawn at various levels, transaction capacity remains the key factor for any cryptocurrency. So, how do both these cryptocurrencies match up in terms of transaction capacity?
- While Bitcoin currently has the capability to process a block size of 1MB, Bitcoin Cash can handle a block size of up to 8MB.
- Bitcoin’s SegWit upgrade has lent it a 2x upgrade in capacity, along with future off-chain scaling solutions (far exceeding the 8x capacity that the hard fork gave endowed on Bitcoin Cash).
So, while over the short-term, Bitcoin Cash wins on transaction capacity with its 8x block size; in the long-term, we may see Bitcoin overtaking its rival by implementing new scaling solutions on top of its SegWit upgrade.
In terms of price performance at the exchange where these cryptocurrencies trade; Bitcoin (BTC) has clearly outperformed its offshoot Bitcoin Cash (BCH). Since August 2, 2017 (which is when Bitcoin Cash started trading), Bitcoin (BTC) has risen 555.8%, while Bitcoin Cash (BCH) has recorded a 520% rise in its price (chart above). In terms of market capitalization, over the same period Bitcoin (BTC) is up 612.4%, while Bitcoin Cash is up 488.4%. Moreover, Bitcoin (BTC) currently commands over $288 billion in market capitalization, about 4.5 times its rival Bitcoin Cash (BCH) which sports about $63 billion (according to coinmarketcap.com data as of December 20, 2017).
Will Bitcoin’s dominance over its offshoot continue, or would Bitcoin Cash steadily catch up to establish new records, only time will tell!