Bitcoin vs. Bitcoin Cash: What’s the difference between BTC and BCH

Bitcoin (BTC) and Bitcoin Cash (BCH) share similarities that go beyond their names. Bitcoin is the first cryptocurrency to have ever been created and is often seen as digital gold, or “gold 2.0.” The cryptocurrency is treated as a store of value and inflation hedge.

Bitcoin Cash, on the other hand, is a cryptocurrency meant to serve as digital cash, with its supporters trying to ensure that it’s cheap and easy to use. BCH was created through what’s called a hard fork of BTC, which means both assets share a transaction history, common code base and more.

A hard fork is a radical upgrade to the open-source software behind the blockchain of cryptocurrencies like Bitcoin. It occurs when a permanent divergence from a blockchain’s latest version is created and some of the computers running the network no longer meet consensus. This creates a fork on the blockchain, where one side keeps following the old rules and the second side follows a new set of rules.

This is what happened to the Bitcoin blockchain in August 2017. To understand why a portion of the community decided to alter the blockchain in such a way, it’s worth taking a step back and look at Bitcoin’s scaling debate.