What is the difference between Bitcoin and Bitcoin Cash? Well, if you’re talking about the price itself, the difference is almost $50,000 currently. But each cryptocurrency has a different history. Here’s a look at both of these digital currencies and the main differences between them.
In cryptocurrencies, instead of spinoffs, there are “forks.” Bitcoin Cash (BCH), also referred to as Bcash, was created in August 2017 when it forked off from Bitcoin (BTC), and anyone who owned a bitcoin received an equal number of Bitcoin Cash.
“Bitcoin Cash is a cryptocurrency that started as a fork, or copy, of Bitcoin,” says Jamison Sites, senior manager and financial services senior analyst at RSM, an audit, tax and consulting company serving middle-market businesses. “In 2017, groups of Bitcoin developers put forward competing changes for improvements to the bitcoin protocol. The network operators were split on which protocol to adopt. Because there was no agreement on which proposal to support, Bitcoin split into two,” Sites says.
The origins of Bitcoin are far more mysterious. The concept was first outlined in a now-famous 2008 white paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System,” written by a person or persons called Satoshi Nakamoto. The identity of Satoshi is still not known. The first bitcoin transactions occurred in early 2009.
“Bitcoin is a digital asset or digital currency of sorts not owned or controlled by anyone. It’s part of a distributed system run by anyone who operates nodes all over the world,” says Brock Pierce, chairman of The Bitcoin Foundation and a longtime evangelist of Bitcoin.
The breakthrough idea of Bitcoin was the creation of a decentralized digital currency that would entirely disintermediate financial institutions. It eliminated the need for a trusted third party to verify transactions and mediate disputes, instead of spreading the job of verifying transactions across the network, where many different parties could use their computing power to verify that bitcoins were sent from one digital wallet to another.
Another novel idea was the hard limits imposed on the total number of bitcoins that could ever exist – 21 million – as well as a well-defined system for how new bitcoin would be created. The pace of bitcoin creation halves roughly every four years. Currently, more than 18.6 million, or more than 88% of the final circulation, exist.
Its scarcity is one of the strongest bullish theses for Bitcoin, especially concerning the dollar, which can be printed ad infinitum by the Federal Reserve.
Since the first transactions in 2009, a lot has changed. Cryptocurrency is its own asset class now. In the early days, one bitcoin was worth almost nothing: less than a tenth of a penny. Over years of volatile ups and downs, that price has soared dramatically, recently reaching highs of more than $52,000.