Distinguishing Between Bitcoin and Bitcoin Cash

Key points

  • An Overview
  • Bitcoin
  • Bitcoin Cash

An Overview

There have always been questions around Bitcoin, no matter, the amount of progress that it has made. Blockchain technology is used by Bitcoin to process, verify and store transactions within a digital ledger. Blockchain, thus can be referred to as a ledger recording technology. 

The biggest drawback of the blockchain network is that it’s very slow. On a Bitcoin network, to process seven transactions, several minutes are required. With the growth in the number of users on the Bitcoin network, transactions have increased and the waiting time has also become longer.      

To address this situation, developers and miners have identified two major solutions:

  • The first solution is to make the data in each block smaller so that they can be verified faster and cheaper.
  • The second solution is to make the block bigger, larger the block, more information processed at one time.  

Out of these two solutions, Bitcoin Cash (BCH) was developed. 


In 2017, it was voted that SegWit (segregated witness) technology will be incorporated so that the size of the data to be verified in the block is reduced. For this, the signature data from each block was removed. It was estimated that 65% of the data processed in each block was signature data. 

There were also talks about increasing the block size from 1MB to 2MB in 2017 and 2018. In 2019, the average block size was increased from 1MB to 1.305MB. But by January 2020, the block size was reduced back to 1MB on average. Larger-sized blocks helped in improving the scalability of bitcoins.   

Research has shown that the implementation of SegWit has helped in increasing the block size. SegWit2x has been proposed, in this both SegWit and double the block size will be implemented. 

Bitcoin Cash

Bitcoin miners started BCH as they had reservations about the effectiveness of SegWit2x in addressing the problems related to scalability. There were also concerns that the introduction of SegWit2x will undermine democratization and decentralization of the currency. 

 In August 2017, a new currency Bitcoin Cash (BCH) was created by miners, by initiating a “hard fork”. BCH had its specifications and blockchain technology along with one crucial feature that was missing in BTC. The block size in BCH was increased to 8MB so that the verification process can be carried out quickly.

In 2018, this block size was increased to 32MB; even though the actual block size on Bitcoin Cash remains only a small fraction of the 32MB limit.

BCH is thus able to process the transactions faster and at a lower fee in comparison to Bitcoin. Even numbers of transactions that can be handled by the BCH network are much more than that handled by the BTC network. 

With the increase in the transaction time, there was also a  drawback associated with it. In the case of the BCH network, security could be compromised, compared to the BTC network. BTC continues to be the top crypto in the world in terms of popularity and market cap. So for BCH, its real-world usability and liquidity are lower than Bitcoin.        

Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency. 

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