Although there is much talk about Bitcoin and Bitcoin Cash, people are not always aware of the meaning or the system behind Bitcoin cryptocurrency.
As opposed to centralized banking systems, Bitcoin cryptocurrency uses decentralized control systems. A decentralized system is made possible with blockchain software. This software stores information across a network of computers making them not just decentralized but distributed. That means that no person or central company owns the system and it can’t be taken down or corrupted by anyone.
As stated before, Bitcoin cryptocurrency transactions are not possible outside the blockchain. But there is one problem: scalability. Which one is faster? Which one has a bigger potential of growing over time?
In comparison to banks, where millions of transactions take place every day, Bitcoin transactions are very slow. It takes about ten minutes to verify and process every transaction. And that is because blocks in the blockchain are limited to one megabyte in size. Over time, if the blockchain remains at the same size and the network of users grows, it will take even more until you can complete a transaction.
When it comes to mining, companies and mining pools represents somewhere between 80% and 90% of the Bitcoin computing power. On July 20, 2017, facing the need of bigger blockchains to sustain more transactions, they voted for a solution called Segregated Witness or SegWit. This process removes the signature data from the blockchain, thus raising the block size limit from 1MB to 2MB.
Over time, as there were many concerns about the SegWit process regarding decentralization, some miners developed an altcoin (Bitcoin alternative). On August 1st they developed a hard fork called Bitcoin Cash. The main advantage of Bitcoin Cash is that it has implemented an increased block size. In other words, the transaction verification process happens faster. But, this change has raised some questions about security and transparency.
It occurs that there are two main concerns regarding Bitcoin (BTC) and Bitcoin Cash (BCH) and both communities have the same priorities:
Transparency is highly important for The BTC community. On the other hand, the BCH community focuses on faster transactions. Both camps want the other camp’s feature. After all, it comes down to people choices. Which one comes first?
Facing major lack of consensus some investors pulled out of Bitcoin and moved into Bitcoin Cash. Will Bitcoin value decline? Considering that Bitcoin is close to $10,000 while Bitcoin Cash’s value is constantly decreasing, it could be safe to say that users trust the original coin more than the alternative. After all, Bitcoin has proven that it can be a reliable currency and adoption is on the rise.