Bitcoin (BTC) Vs Bitcoin Cash (BCH): World’s Leading Cryptocurrencies Matched Up
The world has hosted some great rivalries over the years.
Muhammed Ali and Joe Frazier. Duke versus the University of North Carolina. Melbourne versus Sydney. Sparta versus Athens.
But one modern rivalry may beat them all: the rivalry between bitcoin (BTC) and Bitcoin Cash (BCH).
It’s been nearly one year since the launch of Bitcoin Cash. On August 1, 2017, Bitcoin Cash (BCH) hardforked away from the original bitcoin (BTC) blockchain, entering a new future with higher blocksize limits, lower fees, and better scalability.
Bitcoin (BTC) supporters called BCH a stupid attempt to confuse the bitcoin community. Bitcoin Cash (BCH) supporters, meanwhile, accused BTC developers of hijacking Satoshi’s vision and making the world’s largest digital currency unusable.
Ultimately, to the outsider, the BTC versus BCH debate can be confusing. This confusion is compounded by the fact that the two sides tell vastly different stories. Our friends at CoinCentral recently tried to clarify the debate with an article titled, “A Brief History of the BTC vs. BCH Feud.” In that article, author David Hamilton discusses the past, present, and future of the feud in an unbiased way.
With that in mind, here’s a brief overview of the BTC versus BCH feud.
Prior to 2017, there was one version of bitcoin. It was called bitcoin (BTC). It was first launched in January 2009 and created by Satoshi Nakamoto.
Eventually, bitcoin’s developers split into two different ideologies. These two differing ideologies were unable to reconcile their differences. Like the Great Schism of the Catholic Church and Eastern Orthodox church in 1054, the two decided to go their separate ways instead of moving forward together.
On August 1, the bitcoin blockchain was split into two different chains. Today, we have bitcoin (BTC) and Bitcoin Cash (BCH).
Much of the action, however, took place prior to the split. Let’s find out more.
- Roger Ver: Owner of Bitcoin.com, angel investor for BTC startups like Blockchain.info, and BCH evangelist
- Jihan Wu: Co-founder of Bitmain and supporter of Bitcoin Unlimited
- Calvin Ayre: Owner of online gambling site Bodog
- Dr. Adam Back: Investor of the Hashcash proof of work (PoW) system
- Dr. Pieter Wuill: CEO of Blockstream, lead developer of BTC
- Dr. Craig Wright: Part of the original team that created bitcoin and self-proclaimed Satoshi Nakamoto
The Origins Of The Rift
In early 2017, the crypto market exploded with growth. Suddenly, this was the year everyone wanted to buy bitcoin, get involved with crypto, and use bitcoin. Early in the year, bitcoin began to experience significant scaling issues. There was congestion on the blockchain, leading to huge delays and ridiculously high fees.
One of the advantages of bitcoin is that you could send a transaction cheaply and securely around the world in minutes. In 2017, however, users were paying fees of 20% or 50% or higher and waiting days for bitcoin transactions to be processed. Congestion had forced bitcoin to lose its status as a useful digital currency.
Changes needed to be made. This is where the trouble began. One group wanted to increase the block size of bitcoin to accommodate more transactions, while the other group wanted to keep the original block size to maintain bitcoin’s strong security.
Scaling Proposal 1: Increase Block Size
Since launching in 2009, bitcoin has had a block size of 1MB. Each transaction is about 1kb, which means bitcoin can accommodate roughly 1,000 transactions per block, with each block. Increasing the blocksize would allow for more transactions per block, easing congestion on the network and boosting scalability.
Supporters of higher block size included Roger Ver, Jihan Wu, and Craig Wright. These three, and other higher blocksize supporters, cited Satoshi’s original bitcoin whitepaper that described bitcoin as “A purely peer-to-peer version of electronic cash.” The 1MB blocksize limitation impeded bitcoin’s ability to work as cash.
Higher blocksize limits would also be beneficial to miners. That’s why Wu, who controls a huge portion of bitcoin’s network hash power and the crypto mining hardware market, supported higher blocksize limits.
Scaling Proposal 2: Keep The Original Block Size
On the other side of the debate was the proposal to keep the original block size. This was the side supported by bitcoin’s main development team. This side argued for keeping the original block size because it maintained Satoshi’s original vision.
As CoinCentral explains,
“They felt that 1MB block size was integral to BTC because miners must download the entire blockchain. Any increase to the block size could potentially reduce the ability for new miners to participate.”
The bitcoin blockchain is already over 150GB, and it will continue to grow over time regardless of block size.
This side of the scalability debate was led by Dr. Pieter Wuill, who also spearheaded the SegWit and BIP 32 implementations in the bitcoin network. Dr. Wuill has been BTC’s lead developer since May 2011. This side was also supported by Dr. Adam Back, credited with creating one of the world’s first proof of work algorithms. Back’s Hashcash PoW algorithm was cited in Satoshi’s whitepaper.
The New York Agreement
These two scaling proposals led to the New York Agreement, also known as the NYA or the Silbert Accord. This agreement was published on May 23, 2017. The goal of the agreement was to end bitcoin’s scalability issues and push the network forward.
Key points of the agreement included integrating SegWit and a 2MB block size increase into the bitcoin blockchain.
Over 50 bitcoin-related companies signed the agreement. However, the agreement was not supported by bitcoin’s core development team.
As a result of the lack of support from bitcoin developers, the community was split, and neither side of the NYA achieved the necessary 50% support from miners.
Eventually, a compromise was reached where SegWit would be activated in August, and then bitcoin’s block size would be doubled to 2MB in November.
The new plan received 80% approval from the mining community. At the time, this was a huge victory, and everything looked good for the future of bitcoin.
Mining Pools Drop Their Support For The New York Agreement
This led us to the August 1 hard fork that created Bitcoin Cash.
August 1: Bitcoin Hard Forks To Create BTC And BCH
In the hours after the August 1 fork, the price of BCH fluctuated wildly. It surged close to $1,000 before plummeting down to the $100 range before eventually settling at a price of around $500 by September 2017.
The Twist: BTC Versus BCH
After the hard fork, an issue emerged: there were now two versions of bitcoin. Which version got the privilege of calling itself bitcoin (BTC)? Should Bitcoin Cash use the acronym BCH? Or should it use BTC?
This debate came to a head on February 13, 2018, when Roger Ver’s website, Bitcoin.com, published an article where they announced the release of their new BCH wallet. That wallet featured an integrated ShapeShift feature allowing users to trade BTC for BCH.
The release of a wallet isn’t typically huge news. However, the release of this wallet referred to bitcoin (BTC) as “Bitcoin Core”. In other words, Bitcoin.com had decided to refer to BTC as Bitcoin Core and BCH as Bitcoin Cash.
This set off a firestorm on social media. Shapeshift eventually issued a tweet distancing themselves from the wallet, saying,
“Although we are happy to offer our API integration services for the wallet, we strongly stand by the stance that bitcoin should be referred to as bitcoin, not Bitcoin Core.”
One of the most prominent figures to weigh in on the debate was Charlie Lee, creator of Litecoin.
“Please stop calling bitcoin, Bitcoin Core. No one does this,” explained Lee on Twitter. Lee accused Roger Ver and Bitcoin.com of misleading users.
One of the easiest ways to trigger a Bitcoin Cash supporter is to call their digital token BCash.
In response to the criticism above, where Bitcoin.com called BTC Bitcoin Core, bitcoin supporters began calling Bitcoin Cash “BCash”.
Why is BCash such a big deal? Well, BCash is seen as an insult and a slur against Bitcoin Cash because it removes “bitcoin” from the name. It suggests that BCash is just another altcoin. In reality, Bitcoin Cash supporters claim to push forward the original Satoshi vision for bitcoin. They see BCH as the true, best version of bitcoin.
Roger Ver particularly takes issue with the BCash name. He’s frequently battled with users on Twitter about use of the term BCash, calling them “jerks”.
The Feud Today
Today, the BCH versus BTC feud continues. The feud isn’t quite as hostile as it was during its heyday, but the feud is arguably more important today than at any point in its history.
First, it’s important to note that both projects have very active development teams. BTC and BCH conferences are regularly attended around the world, and development continues to push forward on both projects.
BCH is one of the top 5 largest cryptocurrencies in the world today. It sometimes reaches a high of position #3, sitting just behind BTC and ETH. Other days, it’s overtaken by Ripple (XRP). BCH has its own wallets, its own users, and its own businesses. In July 2018, the project was even preparing to launch its first BCH ATM.
The biggest debate today is over the Lightning Network, which is the proposed scaling solution from the BTC development team.
The Controversial Lightning Network For BTC
The Lightning Network will change the entire nature of bitcoin. It’s a huge departure from Satoshi’s original bitcoin vision as outlined in the whitepaper. Supporters of the Lightning Network claim it will change bitcoin for the better, allowing thousands of transactions to be processed per second. Detractors of the Lightning Network see it as an error-prone, clunky technology that introduces excessive centralization into the bitcoin network.
Here’s the good part: the Lightning Network allows users to send payments for less than $0.01. The Lightning Network has been showcased on a number of different builds.
Here’s the bad part: the Lightning Network is a second layer protocol. It’s built on the idea of taking transactions away from the bitcoin blockchain. This reduces congestion on the bitcoin blockchain, but at the expense of taking transactions off the blockchain. The second layer protocol, meanwhile, requires setting up individual channels with retailers. It’s a tradeoff where you’re swapping decentralization and inefficient transactions for centralization and more efficient transactions. It also means bitcoin isn’t really a P2P currency anymore.
One of the best examples of the BTC versus BCH debate raging online is at Satoshis.place. The website is designed to showcase the power of the Lightning Network. You can pay 1 satoshi to color one pixel of the website. In a timelapse video, seen here, you can watch the board quickly turn into a BCH versus BTC battleground after launch.
Conclusion: What’s Next For BCH Versus BTC?
The battle between BTC and BCH continues to rage on. The Lightning Network, if launched, could sway users to BTC and encourage the mass adoption of BTC. Or, it could kill BTC overnight, making it a clunky and awkward protocol suited only for tech-savvy users willing to pay $10 to open a channel with their local coffee shop just to save 5 cents on a coffee transaction. To many users, it just doesn’t make sense as a P2P transaction protocol.
On the other side, BCH supporters believe they’ve solved the scaling issue. They’ve increased blocksize limits all the way to 32MB. They have wallets, mining support, and a growing network of developers.
However, the daily transactions and market cap are significantly lower than BTC, and 1 BCH is worth about 0.10 BTC. BCH, however, requires enormous amounts of computing power and storage space in order to continue scaling. Moore’s Law states that computing power will eventually catch up, but it remains to be seen if it’s an effective long-term solution.
The battle continues. We’ll see what happens next in the biggest debate in the bitcoin community.