What is the difference between Bitcoin (BTC) and Bitcoin Cash (BCH)?

Bitcoin Cash (BCH) forked from Bitcoin (BTC) in 2017 to increase block size for faster, cheaper transactions, reflecting differing visions of Bitcoin's future.

Aug 13, 2025 at 11:35 am

Origins and the Bitcoin Fork

The distinction between Bitcoin (BTC) and Bitcoin Cash (BCH) originates from a major disagreement within the Bitcoin community about how to scale the network. As Bitcoin gained popularity, transaction times increased and fees rose due to limited block size. The original Bitcoin protocol set a 1 MB block size limit, which restricted the number of transactions processed per second. This led to congestion, especially during periods of high demand. In August 2017, a group of developers, miners, and investors decided to create a new version of Bitcoin with a different approach to scalability. This event is known as a hard fork, resulting in the creation of Bitcoin Cash (BCH) as a separate blockchain from Bitcoin (BTC). While both share the same transaction history up to the fork, they operate independently thereafter.

Block Size and Transaction Throughput

One of the most significant technical differences lies in the block size. Bitcoin maintains a 1 MB block size, although with the activation of Segregated Witness (SegWit), effective capacity increased slightly. In contrast, Bitcoin Cash increased its block size to 8 MB at launch and has since been raised to 32 MB in later upgrades. This allows BCH to process more transactions per block, reducing congestion and lowering fees during peak usage. For example, a 32 MB block can accommodate tens of thousands of transactions, compared to BTC’s few thousand under normal conditions. This design choice reflects BCH’s focus on being used as digital cash for everyday transactions, whereas BTC has evolved more into a store of value, often compared to digital gold.

Transaction Fees and Confirmation Speed

Due to larger block sizes, Bitcoin Cash typically has lower transaction fees than Bitcoin. On the BTC network, fees are determined by market demand and can spike during high-traffic periods. Users must pay higher fees to have their transactions prioritized by miners. In contrast, BCH’s expanded block space reduces competition for inclusion, keeping fees consistently low—often less than $0.01 per transaction. Confirmation speed is also influenced by block propagation and network stability. While both networks aim for a new block every 10 minutes, BCH’s larger blocks can lead to slightly longer propagation times, potentially increasing the risk of orphaned blocks. However, in practice, users experience faster and cheaper transactions on BCH, especially for microtransactions or frequent payments.

Mining and Network Security

Both BTC and BCH use the Proof-of-Work (PoW) consensus mechanism, relying on SHA-256 hashing algorithms. Miners compete to solve cryptographic puzzles and validate transactions. However, the hashrate distribution differs significantly. Bitcoin commands the majority of SHA-256 mining power, making it more secure against 51% attacks. Bitcoin Cash, with a smaller network of miners, is theoretically more vulnerable, though no major attacks have occurred. The economic incentives for miners also differ. On BTC, miners earn income from both block rewards and high transaction fees during congestion. On BCH, with minimal fees, miner revenue depends more heavily on the block subsidy and market price of BCH. This has led to concerns about long-term miner participation if the token value does not remain competitive.

Philosophy and Use Case Divergence

The split between BTC and BCH reflects deeper ideological differences. The Bitcoin (BTC) community prioritizes decentralization, security, and scarcity, favoring off-chain scaling solutions like the Lightning Network. This approach keeps the base layer secure and minimal, delegating fast payments to secondary layers. In contrast, the Bitcoin Cash (BCH) vision emphasizes on-chain scalability, believing that peer-to-peer electronic cash should work directly on the blockchain without requiring complex additional layers. Advocates argue that BCH stays truer to Satoshi Nakamoto’s original whitepaper, which described Bitcoin as a system for sending payments online. This philosophical divide continues to influence development priorities, community engagement, and adoption patterns.

How to Differentiate BTC and BCH in Practice

For users managing both assets, it is crucial to distinguish between the two blockchains. Wallets and exchanges must support both networks separately. When sending funds, ensure the correct network is selected:

• Verify the receiving address format – BTC and BCH addresses may look similar but are not interchangeable.
• Use wallets that clearly label BTC and BCH – Examples include Ledger, Trezor, and Exodus.
• Never send BTC to a BCH address or vice versa – Doing so may result in permanent loss of funds.
• Check network confirmations – BTC typically requires 6 confirmations for security; BCH may require similar, though some services accept fewer due to faster block times.

Exchange platforms like Coinbase, Binance, and Kraken list both BTC and BCH as separate assets. When depositing, always confirm the deposit address provided matches the intended cryptocurrency. Misrouting funds is a common error and often irreversible.

Frequently Asked Questions

Can I use the same private key for both BTC and BCH?

Yes, if you held Bitcoin before the August 2017 fork, your private key gives access to both BTC and BCH on their respective chains. However, spending BTC from a reused address may expose your BCH to theft if not properly secured. It is recommended to sweep forked coins into a new wallet.

Why do some people call Bitcoin Cash “Bcash”?

The nickname “Bcash” is sometimes used by critics of BCH to downplay its legitimacy as “real Bitcoin.” Supporters of BTC may use the term to distinguish it from what they consider the original Bitcoin. The name reflects community sentiment rather than technical specification.

Does Bitcoin Cash support smart contracts like Ethereum?

Bitcoin Cash does not support smart contracts in the same way Ethereum does. However, through upgrades like the Schnorr signatures and OP_RETURN enhancements, developers have enabled basic programmable features. Projects like SmartBCH offer an Ethereum-compatible sidechain for BCH, allowing EVM-based dApps.

How are block rewards handled in BTC versus BCH?

Both networks follow a halving schedule every 210,000 blocks. As of now, the block reward is 6.25 BTC per block and 6.25 BCH per block. These rewards are identical in quantity but differ in market value due to price divergence. Halvings occur independently on each chain, maintaining similar monetary policy structures.