Bitcoin Cash, one of the world’s newest cryptocurrencies was launched in mid-2017 after a “hard fork” in the global community of Bitcoin users and traders. The new altcoin offers a number of improvements over its famous near-namesake and many of the world’s successful cryptocurrency traders are opting get involved in the latest chapter of the online monetary revolution. Although both are based on blockchain technology, investors need to know the main differences between Bitcoin and Bitcoin Cash, to understand the causes of their volatility and the full range of opportunities they offer for price growth.
Bitcoin is the original cryptocurrency, launched way back in 2008 by a mysterious individual – some say a collective – named Satoshi Nakamoto. The blockchain payment system stores all transactions on a public ledger, ensuring total transparency, and enables peer-to-peer transfers of virtual currency without the need for national or supranational institutions, or intermediaries of any kind. Mining is the process by which third parties authenticate the data stored on each block in the chain, getting paid in the process.
However, over the past few years this system has increasingly been seen as slow, especially in comparison to credit card transactions. For instance, Bitcoin can process only about 7 transactions per second, while Visa and Mastercard can deal with tens of thousands of transactions per second. This was one of the main reasons for the creation of Bitcoin Cash, which boasts a far larger block size than its parent: 8 MB instead of just 1 MB. This is probably the main difference between the 2 virtual currencies. The bigger the block size, the more transactions can be processed simultaneously. While Bitcoin can handle around 2,500 transactions per block, a Bitcoin Cash block can register about 7,000 transactions.
With a vastly improved protocol powering more transactions per second, faster payments and lower fees are possible across the Bitcoin Cash network, a competitive advantage that is widely expected to support its long-term price evolution. Traders around the world are well aware that all cryptocurrencies are highly volatile financial instruments. Although this presents a high level of risk, it is at the core of their appeal, since investors can easily take advantage of big price movements to enjoy significant profits. To do so, they can use various cryptocurrencies brokers, one of the most popular of which is the UFX.com trading platform, offering a wide range of advanced trading tools and professional charts.