Bitcoin was the first cryptocurrency in the world, and Bitcoin Cash is the most successful fork of the Bitcoin Network to date. Both coins emerged from the same pool of developers and the community in general. The values that lie at the core of the two Blockchain giants were the same at the beginning, but time has pulled them apart. So, in this article, we will review the state of the race between Bitcoin vs Bitcoin Cash during 2020.
A brief background
A little bit of history is necessary first. Of course, Bitcoin is the first-ever cryptocurrency and decentralized payment network as detailed in the Bitcoin whitepaper. The launch of the BTC network happened on January 3rd of 2009.
At first, Bitcoin wasn't more than an internet oddity. People would exchange it in internet forums and few thought it would become more than that. All of this changed in 2013 when for the first time a BTC equaled 100 dollars, and since then the price began moving up until BTC's all-time height of 2017.
BTC price in USD
Chart source: Coingecko
After the 2017 bull market, the price of BTC crashed along the entire crypto economy. But even after this downturn Bitcoin adoption kept growing. For the foreseeable future, Bitcoin will remain the most popular crypto coin on the planet.
Bitcoin Cash began as a fork of the Bitcoin network. In fact, to date, BCH is the most successful fork of BTC. It is the most valuable in terms of market capitalization and has a large developer community constantly improving the protocol.
The Bitcoin Cash fork occurred on the 1rst of August 2017. The ratio of BCH to BTC was 1 to 1, meaning that anyone holding Bitcoin at the time would get the same amount of Bitcoin cash. The reason behind the split was a debate regarding the block size of the network and the confirmation speed.
Read A History of Bitcoin Forks for more information.
The price of BCH has moved downwards after BCH's all-time highest price of 2017. In this sense, Bitcoin Cash has been a bad investment for those who bought at the top of the market. There is little reason to think the value of the coin will rise in the immediate future for reasons that we will discuss later in this article.
BCH price in USD
Chart source: Coingecko
Despite the relatively poor performance of BCH, it has a very active community. Many are developing Decentralized Applications (Dapps) for the BCH network and transaction volume keeps growing despite the low price. So, even with all of its problems, this battle of Bitcoin vs Bitcoin Cash has enough energy to remain viable for many years to come and remain at the top 10 crypto coins by market capitalization.
Transaction Fees
Previously we summarized the origins of the two networks and this led to a discussion about the price of both coins. Of course, price isn't everything and people out there actually want to use cryptocurrencies and not just hold them. This is where fees become an important issue for those actively sending money through the blockchain.
One of the key results of increasing the block size in BCH has been that it has incredibly lower network fees than Bitcoin or even Ethereum. The initial block size in BCH increased to 8 MB with the original fork. Now, BCH can hold blocks with 32 MB, which retain considerably more transactions than in BTC.
Bitcoin (BTC) average transaction fee
Source: BitInfoCharts
As we can see from the previous chart, BTC fees climbed dramatically along with the price. On some occasions, a fee could run as high as 50 dollars per transaction, with confirmation times of 3 weeks. This is one of the reasons that resulted in the BCH fork. Right now the average fee in Bitcoin is around six dollars, still expensive compared to other networks.
In contrast, Bitcoin vs Bitcoin Cash, the last one is cheapest network to use in the Bitcoin spectrum. Its fees have never risen above 8 cents, and right now are actually below the 1 cent price. Right now BCH is perhaps the most affordable way to transfer value in any decentralized protocol.
Bitcoin Cash (BCH) average transaction fee
Source: BitInfoCharts
In 2020, the BCH network will launch a wrapped Bitcoin, this is a way to bring Bitcoin into the Bitcoin Cash network. This means you buy or send Bitcoin with substantially lower fees, and this will help to get more people to adopt Bitcoin and leverage the advantages of both networks to the larger objective of bringing crypto to the general public.
The 2020 BCH fork
In August of 2020, a conflict began brewing between the Bitcoin Cash ABC developers (the name of the BCH client) and the BCH community and miners. The developers proposed a mechanism of taking parts of the transaction fees and depositing them into a fund to finance future development. The miners and BCH community at large did not agree with the proposed change.
The two sides failed to reach a compromise, and the network appears to be heading into a hard fork. The new network would be called BCHN and the old will retain the ticker BCH. This would reduce the hash power of the Bitcoin Cash blockchain and lead to a sell-off of the BCH coin, with some analysts predicting a price of around 100 dollars. The future of BCH will be hampered and market capitalization will shrink in the future.
As we mentioned at the start of this article, even with all of the advances in the BCH blockchain this latest fork makes it a poor investment. For the time being, it is better to wait and see how the fork will impact mining and the community. So, for now, recommending Bitcoin Cash is hard for those looking to grow their money. In the end, Bitcoin remains the better asset for growth and BCH the cheaper version to use.
