Bitcoin vs Bitcoin Cash

Bitcoin Cash is a separate cryptocurrency that split from bitcoin on August 1, 2017. The two share the same early history and the same 21 million coin limit. They differ mainly on one question: how much data each block of transactions should hold.

Why did they split?

By 2015, bitcoin was running into a capacity limit. Each block of transactions was capped at one megabyte, which allowed only a handful of transactions per second. When the network was busy, fees rose and payments slowed.

The community divided over the fix. One camp wanted bigger blocks, so that more transactions could fit on the main chain and fees would stay low. The other camp argued that large blocks would make it too costly for ordinary people to run a node, a computer that checks the ledger, and that this would hand control to large operators.

In 2017 the big-block side carried out a hard fork, a rule change that older software does not accept and that can split a blockchain in two. Bitcoin Cash started with a block limit of eight megabytes. Anyone holding bitcoin at the moment of the split ended up with the same amount of Bitcoin Cash on the new chain.

How do they differ today?

• Block size. Bitcoin kept small blocks but adopted an upgrade called Segregated Witness (SegWit) in August 2017, which rearranged transaction data to fit somewhat more into each block. Bitcoin Cash rejected SegWit and raised its limit to 32 megabytes in 2018.
• Scaling approach. Bitcoin relies on the Lightning Network and other second-layer systems for small, fast payments. Bitcoin Cash aims to handle payments directly on its main chain.
• Security. Both use proof-of-work mining with the same SHA-256 algorithm, so the same machines can mine either. The great majority of that computing power has stayed with bitcoin. A chain with less mining power behind it is, in principle, easier to attack.
• Adoption. Bitcoin has far more users, trading activity and developer attention.

They still share the transaction history before August 2017, the 10-minute block target, the halving schedule and the 21 million cap.

Did Bitcoin Cash split again?

Yes. In November 2018, a dispute among Bitcoin Cash developers led to another hard fork. It produced a third coin, Bitcoin SV, whose backers wanted still larger blocks.

Which one is the real bitcoin?

Both sides claimed to be the true heir to the original design. Bitcoin Cash supporters still point to the 2008 white paper, which describes a peer-to-peer electronic cash system. In practice, the market settled the naming question. The chain that kept the existing rules, and the bulk of miners and users, kept the name bitcoin.

The episode is often cited as a test of how decentralized networks resolve disagreements. Nobody could force a decision, so the dissenters left and built their own chain.