What Is Bitcoin Cash and Bitcoin Gold, and How Do You Buy It?
With Bitcoin prices skyrocketing from 2017 into 2018, Bitcoin is in the news all the time. It’s even made it onto the popular TV show “The Big Bang Theory” where the men of the show are trying to find a Bitcoin that they “mined” years ago.
But what a lot of people don’t know is that there are currently three main forms of Bitcoin. There are also a few other more obscure forms but were going to be talking about the main three here.
The ones we’ll look at are Bitcoin (BTC), Bitcoin Cash (BCH), and Bitcoin Gold (BCG).
These different cryptocurrency denominations can be super confusing. And this can lead to a bunch of questions. Today we’ll look at how these different types of Bitcoin work together and relate to each other, and we’ll also show you where you can buy Bitcoin.
Why Are There Different Types of Bitcoin?
The original Bitcoin was meant as an experiment to fix central banking.
While most people have heard about Bitcoin, there’s still a lot of confusion around what it is and what it’s meant to do. At the most basic level, Bitcoin is a peer-to-peer monetary system. It’s meant to fix a lot of the perceived and real problems with the central banking system and put money policy directly into the hands of the people.
Why Is There Bitcoin Gold?
The fear of the elites gaining all the control gave rise to Bitcoin Gold.
You can currently “mine” Bitcoin with specialized computer equipment.
To mine Bitcoin, you need something called ASIC mining hardware. This is expensive hardware and it’s also very energy-intensive to use. What that has meant is that the main version of Bitcoin production is landing more and more in the hands of the elite. With much of the current Bitcoin being mined in China where energy is cheaper.
Bitcoin Gold is meant to put mining back into the hands of regular people. Instead of needing specialized equipment, Bitcoin Gold is meant to be mined by regular computers. Using something called CPU power. This allows anyone with a regular computer to mine Bitcoin Gold, much like Bitcoin was in the beginning.
What Is There Bitcoin Cash?
The ability to scale gave rise to Bitcoin Cash.
Bitcoin Cash is meant to alleviate some of the lag in transaction time that Bitcoin has been experiencing. In order to reduce spam and fraud with Bitcoin, Bitcoin was originally launched with something called a 1 MB blockchain. And this was fine at the beginning, but as the currency became more and more popular it meant that the transaction times for using or buying Bitcoin started to lag tremendously.
The 1MB limit means that Bitcoin is extremely limited to the number of transactions it can process per second. And lagging transaction times present huge obstacles to scaling.
This limitation is why Bitcoin Cash was developed with a significantly bigger block chain.
Bitcoin Cash has an 8 MB blockchain. Think about it like building an offramp on the Bitcoin highway. That offramp then goes to an express lane that only carries high-capacity vehicles.
This allows many more transactions per second to be processed on Bitcoin Cash than on Bitcoin itself.
Just like a highway system, you can either travel down the Bitcoin highway, the Bitcoin Gold highway, or the Bitcoin Cash Highway. They are related, but not the same. You can also have cars (or investments) on all the highways.
Right now, all three of these types of Bitcoin currencies are being traded on lots of exchanges, with Bitcoin being the most popular and available in most places.
How Are These 3 Types of Bitcoin Related to Each Other?
All three types of Bitcoin come from the same basic programming. You can own one, two or all three.
And in the marketplace, they tend to follow each other’s performance for the most part. So, if Bitcoin is trading up then Bitcoin Cash and Bitcoin Gold will usually be up as well.
Of course, markets—especially markets for things like cryptocurrency—are notoriously fickle. It is important to understand what you’re doing and for you to be well-informed before you invest.
Where Can You Buy Bitcoin, Bitcoin Cash, and Bitcoin Gold?
All three of these cryptocurrencies are available on various exchanges. And you can buy them in nearly any currency from throughout the world. This includes the US dollar, the Euro, or the Pound.
Coinbase is the most popular exchange by far.
But you can only buy Bitcoin and Bitcoin Cash at Coinbase. In order to buy Bitcoin Gold you need to go to a different exchange—Bitfinex is one of the many that buy and sell Bitcoin Gold.
Like most other stock trading applications, you do pay a fee for every transaction that you make on these platforms. It’s usually pretty small and you pay it both when buying and selling.
Bitcoin Cash and Bitcoin Gold are less expensive per unit currently than Bitcoin is. Mostly this is a function of them being newer on the market.
It’s important to note that you can also buy fractions of Bitcoin, Bitcoin Gold, and Bitcoin Cash. If you have $100 it would like to invest in one of these currencies, then you can get something like 1/100 of a Bitcoin or 1/10 of a Bitcoin Cash.
You don’t have to have the $10,000 or $1,200 it can take to buy a single one of these units (depending on where they’re at in the market at the time). You can buy in nearly any denomination that you’d like.
Always Be Careful With Investing in New Technology
Recently the Securities and Exchange Commission of the United States warned of “potentially unlawful” online trading platforms that lack regulatory oversight.
This is because a lot of what’s happening right now the crypto currency is kind of like the Wild West. It’s mostly unregulated or self-regulated, and there’s no guarantee that most of these platforms are following any other rules besides ones that are self-imposed.
And it’s important to understand that cryptocurrencies often go through extremely volatile swings both up and down.
It will be interesting to see where these new types of non-government-backed currencies take us. The technology behind them is fascinating. And the ability of the communities to make their own monetary policy decisions is revolutionary.