Litecoin and Bitcoin Cash were both created with one broad aim — to improve upon the functionality of Bitcoin (BTC).

Using much of the same source code as Bitcoin (BTC), each project identified pain points in the functionality of the original cryptocurrency and sought to build upon them, with Bitcoin Cash advocates even claiming that BCH is the true Bitcoin and more in line with the original vision of Bitcoin creator Satoshi Nakomoto.

Pain Points

Bitcoin critics often cite long transaction confirmation times due to network congestion as a major issue for the Bitcoin network.

Beyond that, there is a general feeling among many cryptocurrency enthusiasts of having missed out on the chance to get in on the original cryptocurrency back in the early days, with newer projects like Litecoin and Bitcoin Cash offering investors a chance at a fresh start, tackling problems like:

Scaling

Transaction times

Perceived lack of further ROI growth potential

Litecoin Origin

Created by Charlie Lee, Litecoin went live in October 2011.

Lee made it clear to the cryptocurrency community that his currency was nearly identical to Bitcoin, but with only 150 coins premined compared to 1 million coins mined by Satoshi Nakomoto prior to other miners joining in, it was presented as a “ground floor” opportunity for those who missed out on earlier investment in Bitcoin.

Lee’s idea was that his currency would be competitive by offering many of the same features as Bitcoin but with smaller blocks, a less-ASIC friendly hashing algorithm to appeal to smaller individual miners, and a larger overall supply — four times greater than that of Bitcoin or Bitcoin Cash.

The features and value proposal of the cryptocurrency appealed to miners and investors, and Litecoin went from trading at $0.03 USD in July 2012 to trading at $40 in November 2013, a 130,000% increase in value. The cryptocurrency reached an all-time high of $331.59 and at the time of writing it last traded at $59.02.

The stated goal of Litecoin is to be a faster, commerce-focused, Bitcoin-esque coin that people could get in on from day one.

Bitcoin Cash Origin

Bitcoin Cash forked away from the main Bitcoin blockchain on 01 August 2017. Many members of the Bitcoin community disagreed with the plans to introduce a consensus layer known as SegWit or Segregated Witnessing.

Without SegWit, Bitcoin transactions hashes (TX ID) are mutable for a brief period before entering the blockchain. This issue is known as transaction malleability.

Transactions cannot be altered, but the TX ID can, creating problems for second-layer scaling solutions like the Lightning Network (LN) which rely on transaction signatures to remain constant.

SegWit solves the malleability problem and allows for block sizes to be increase in certain circumstances, helping with scaling.

However, the solution was met with suspicion by many who felt that it deviated from the original whitepaper and was needlessly complicated and potentially created a centralized point of failure in relying on the Blockstream company to create SegWit and LN.

Many also accused Blockstream of deliberately compromising Bitcoin to create a reliance on the company’s products in order to generate revenue.

Opponents of SegWit planned and executed the Bitcoin Cash fork. Instead of introducing SegWit to facilitate the LN, Bitcoin Cash developers and miners opted for the simpler on-chain solution of increasing the blocksize to reduce congestion.

BCH went from trading at $300 in November 2017 to an all-time high of $4,355.62 and last traded at $160.64.

On November 15 2018, Bitcoin Cash hard forked into two separate currencies, Bitcoin Cash ABC (BCH) and Bitcoin Cash SV (BSV).

Bitcoin Cash ABC retained the BCH ticker and has a higher hash rate and market cap, and this is the currency we’ll be discussing in the article.

The stated goal of Bitcoin Cash is to scale Bitcoin, increasing transaction times, and adhere to the original Bitcoin whitepaper in as much as possible.

Functionality and Use Cases