What’s the difference between Bitcoin Cash and Bitcoin?
Bitcoin Cash and Bitcoin (BTC) used to be one and the same until August 1, 2017. That’s when the Bitcoin network split and two separate coins were the result. At the moment of the split every owner of Bitcoin had the same amount of coins on both networks.
Since that time BTC has retained a 1 MB “block size” (the space allowed for transactions every 10 minutes or so) even though transaction throughput has been maxed out for many years (about 300,000 transactions per day). The result is that BTC transactions can be quite expensive with the average transaction fee reaching as high as $50 at times of high demand.
BTC transactions are also potentially very slow if one does not pay a high enough fee. Some transactions get stuck in limbo for days or weeks. To alleviate the problem of congestion and high fees, the BTC community hopes to rely on second-layer solutions (e.g. Lightning Network), only using the BTC network as a settlement layer or for very high-value transactions. Unfortunately, the Lightning Network, though it has existed for many years, has many issues with routing payments due to complexity and low liquidity. As a result the Lightning Network tends to favor centralized hubs and custodians, leading to the same problems that plague traditional financial services.
Bitcoin Cash, on the other hand, upgraded its protocol to expand the block size. The Bitcoin Cash block size is fully adjustable with only client-configurable limits in place. Bitcoin Cash developers research and test larger and larger blocks, working to optimize the network and eliminate potential bugs. As market demand increases and protocol research progresses, the community works together to raise the soft limits on the block size over time. The result is that Bitcoin Cash transactions are extremely inexpensive and only cost a fraction of a penny for a typical transaction.
Additionally, Bitcoin Cash development has continually improved the functionality of the underlying Bitcoin Script virtual machine. Over time, old opcodes disabled early on by Satoshi Nakamoto (the creator of Bitcoin) have been carefully reintroduced and many new opcodes have been added. The result is an extremely robust set of building blocks that can be used to power virtually any financial use case, many of which haven't been able to exist until now.
This focus on inexpensive transactions and smart contract functionality opens up a world of payments-based use cases, allows for the possibility of onboarding millions of users and merchants, and is set to revolutionize finance across the globe.