Although Bitcoin continues to enjoy the incomparable popularity, there are also other cryptocurrencies, such as Bitcoin Cash, which belong to the same family. However, Bitcoin and Bitcoin Cash have some fundamental differences.
Interest in cryptocurrencies is booming, and staying informed is a key to reaching success. PointPay experts have recently written an article about hard forks and airdrops, and today we want to give our users a better understanding of Bitcoin Cash, Bitcoin forks and Bitcoin Cash hard fork.
What are Bitcoin forks?
Bitcoin forks are splits that occur in the transaction chain based on different user opinions about the transaction history. These splits create new versions of Bitcoin. They can be called the natural results of the structure of the blockchain system that operates without a central authority. The different Bitcoin hard forks have wildly varied pricing and goals. However, not all of them were able to hold their value.
The two biggest Bitcoin hard forks are Bitcoin Cash and Bitcoin Gold, although there are other forks, including Bitcoin Diamond, Super Bitcoin, Bitcoin Atom, Bitcore, and others.
Understanding the Bitcoin Cash hard fork
Bitcoin Cash is the 26th largest cryptocurrency by market capitalization at the time of writing and the most well-known one among other Bitcoin forks. It is a hard fork of Bitcoin that occurred about five years ago, resulting in a split between Bitcoin and Bitcoin Cash. It was designed to overcome Bitcoin’s transaction speed issues. First, it used 8MB blocks instead of the 1MB blocks used by the original Bitcoin, making it easier to scale. In 2018, the Bitcoin Cash network upgraded the chain’s base block size from 8MB to 32MB.
A hard fork usually occurs when miners and developers from the crypto community can’t agree on updates to the software governing a particular digital currency. One group aims to continue to operate under the same rules. The other one wants to branch off (in other words, to ‘fork’) and generate a new blockchain with a potentially improved software setup. As a result, a new digital currency is created.
As for Bitcoin Cash, the hard fork is a direct result of growing tensions and disagreements between the project developers. When the creator of Bitcoin Cash, Amaury Sechet, came up with the idea for an update that would change the order of transactions on the blockchain, many disagreed.
Tensions continued to rise. Developers and miners from the Bitcoin Cash community decided to move toward the support of Roger Ver and Craig Wright, both known as strong BCH proponents. Ver, who was constantly called ‘Bitcoin Jesus’, supported the new software upgrade, meaning the current Bitcoin Cash version. On the contrary, Wright believed the software should expand the maximum block size. He argued this change would be more in keeping with the pseudonymous Satoshi Nakamoto’s original idea about Bitcoin. However, they both could not reach an agreement on how to proceed.
Therefore, the large-block side used a hard fork to create their separate Bitcoin version. Still, they failed to attract most of the nodes and miners of the original network. On the day of the split, Bitcoin Cash traded at about $290. Now, its price is hovering right around $380.
As the asset created via a hard fork of the Bitcoin blockchain network, Bitcoin Cash is definitely finding its place in the crypto market. Even though Bitcoin remains the leading cryptocurrency, many investors and traders are also interested in Bitcoin Cash. After all, we can’t deny that BCH is a much faster and cheaper network.
Even though Bitcoin and Bitcoin Cash share some similarities that go beyond their names, they coexist, pursuing different aims. Bitcoin acts like digital gold, and Bitcoin Cash may provide faster payments. However, some experts in the industry believe BCH has no choice but to grow significantly, which is not facilitated by repeated hard forks.
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