If we call Bitcoin Cash a fork of Bitcoin cryptocurrency, it won’t be wrong at all. Bitcoin Cash was developed in the year 2017 on August 1st when the Bitcoin network and the people were unable to agree on the same ways of scaling the cryptocurrency.
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The actual point of disagreement here was the size of the block. The block size is appropriate for the size of transactions that are being processed every second and is known as throughput.
As we all know that transactions hold data and information, if we have a larger size of block, it will help us in enabling a greater number of transactions to be involved per block. In the end, it will result in greater and better throughput.
The network of Bitcoin had a limited block size of 1 MB for years. The growing number of Bitcoin users led to higher transaction fees and longer settlement times due to the competition for these fixed and limited block sizes.
Bitcoin is not a stationary protocol. The incorporation of alteration and the governance of Bitcoin is considered to be a quasi-political process that depends on consideration, encouragement, and preference. In simpler words, it is up to people how they take Bitcoin and what they think it is.
As Bitcoin was facing the challenge of scaling, one part of it was feeling the constant urge of maintaining the 1MB block sizes. They argued that it was better to scale Bitcoin cryptocurrency off-chain which means on the second layer solution, leaving the block size and facilitating further transactions.
This quick update lends itself to keeping transactions reliable, fast, and cheap while also ensuring transaction speed and reliability.
As we stated at the start that the community of Bitcoin was not agreeing on the change, the result was a total hard fork or we can say that the point in time where two categories of Bitcoin deviated. The one version that involved the block size upgrade got the name Bitcoin Cash (BCH) and the other old version stayed with the name Bitcoin.
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Key Differences Between Bitcoin And Bitcoin Cash
After the change made by the community in the year 2017, a variety of sovereign teams of developers working on the latest Bitcoin Cash ecosystem have brought various innovations and technologies.
These variations, upgrades, and new technologies have a key purpose of improving the accessibility of Bitcoin Cash as a peer-to-peer e-cash network. This electronic cash system facilitates economic freedom for its users.
Below are some innovations that make Bitcoin Cash different from Bitcoin cryptocurrency.
Supporting Smart Contracts
The creators and developers of Bitcoin Cash are allowed to use different smart contract languages such as Cashscript to allow more difficult and upgraded functions than just the basic transactions that can be done on the platform of Bitcoin.
This act develops a chance for decentralized finance (Defi) applications for instance synthetic device trading. Other applications include private and separate payments by using tools like CashShuffle and CashFusion.
Issuing New Tokens
By using the Simple Ledger Protocol (SPL), the creators can easily issue a new token that dwells on the Bitcoin Cash blockchain. These new tokens are just like the ERC-20 tokens of the Ethereum blockchain.
For instance, Tether is the largest issuer of USD stable coins to date and has invested in the USDT tokens that dwell on the blockchains of the Bitcoin Cash Chain.
This allows and facilitates people to send as well as receive USDT for coins every transaction by using a non-custodial electronic wallet such as Bitcoin.com wallet.
The Non-Fungible Tokens (NFTs)
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The Simple Ledger Protocol used by Bitcoin Cash supports the non-fungible tokens (NFTs) which are just like the ERC-721 token of Ethereum when it comes to functioning.
The most significant function of Non-fungible tokens is that they are virtual tokens and at the same time they are entirely distinct from each other. This brings a huge range of potential applications and uses ranging from digital artwork in markets to tradable in-game items and assets.
There are still many differences between both platforms. The above-mentioned are just a few from the list.
Before investing in either of the crypto assets, you should have a clear idea of what you want. Whether you want a long-term investment or just something to make your transactions from.
The idea of the Bitcoin Cash has shown a lot of potential but then again it has still not reached its actual goal of taking the place of Bitcoin cryptocurrency.