Bitcoin Cash is the original Bitcoin
Bitcoin Fission - What is Bitcoin Cash?
The scaling debate in the Bitcoin world led to a hard fork on August 1st. With Bitcoin and Bitcoin Cash, there are now not only two separate cryptocurrencies, but also two separate Bitcoin blockchains that are not compatible with each other.
What are the reasons for the Bitcoin split?
While the majority of the Bitcoin community (over 95%) want to solve the current problems with slow transactions in the Bitcoin network with SegWit or SegWit2x, the mining equipment manufacturer Bitmain, Bitcoin advocate Roger Ver and the Chinese trading platform ViaBTC want a different way and solve this problem by increasing the block size to 8 megabytes.
Investors need to know that the hardware manufacturer Bitmain, which sells the popular ASIC miners Antminer, among other things, benefited from the original Bitcoin without SegWit. The reason: Bitmain holds a patent on AsicBoost, a method whereby Bitcoins can be "mined" 20 to 30% more effectively. If Segregated Wittness (SegWit) comes into force, Bitmain loses this advantage.
Bitcoin vs Bitcoin Cash - What are the differences?
The difference between Bitcoin (abbreviation: BTC) and Bitcoin Cash (abbreviation: BCH) is not only in the name, there are also differences in the technical specifications.
- Block size increases to 8 megabytes: Bitcoin Cash will increase the block size to 8 megabytes, which means that significantly more transactions can be accommodated in one block. So far, the block size for Bitcoin is limited to 1 megabyte. The increase should lead to faster confirmations of transactions.
- Another philosophy: The Bitcoin Cash camp is of the opinion that Bitcoin should be further developed on the blockchain (on-chain scaling) and not outside the blockchain (off-chain scaling).
- Waiver of SegWit: This means that there will be no outsourcing of the signature from the block (SegWit) with Bitcoin Cash.
- At the same time, Bitcoin Cash will have a so-called replay and wipeout protection. This is to prevent the two separate Bitcoin blockchains from communicating with each other and causing transactions to appear twice. This is ultimately intended to ensure a secure co-existence of the two different blockchains.
- New transaction type: As part of the replay protection technology, Bitcoin Cash will introduce a new transaction type that should bring improved security for hardware wallets and at the same time eliminate hashing problems.
What is Bitcoin planning for the future?
The majority of the developer community behind Bitcoin, on the other hand, wants to further develop the world's largest cryptocurrency outside of the block chain (off-chain scaling).
- Activation of SegWit: When SegWit is activated, the signature is first removed from the block, which frees up capacities in the main block. This should allow twice as many transactions to be accommodated in one block.
- Activation of SegWit2x: Three months later, the next step is to follow with SegWit2x, whereby the block size is to increase to 2 megabytes.
- Activation of the Lightning Network: SegWit2x should then also activate the Lightning Network, which should enable transactions in addition to the actual blockchain. This should again significantly accelerate transactions.
Conclusion: Bitcoin Cash helps Bitcoin investors to get additional coins
Since Bitcoin Cash was spun off from the current Bitcoin blockchain, the initial value and thus the status quo of the previous Bitcoin blockchain will be adopted.
This means: The Bitcoin split is positive for Bitcoin owners, so investors receive the same amount of Bitcoin Cash on each individual Bitcoin address on August 1st. Investors who have held 10 Bitcoins will receive an additional 10 Bitcoin Cash on a separate blockchain.
Bitcoin investors can now look forward to a "gift" because Bitcoin Cash was recently traded at around US $ 250 on various Bitcoin exchanges, while the price of Bitcoin has recently even risen above the US $ 3,000 mark . Bitcoin Cash is also the fourth largest cryptocurrency with a market capitalization of around US $ 3.5 billion.
It should be noted, however, that the original Bitcoin with SegWit has significantly more supporters than the new crypto currency Bitcoin Cash. It remains to be seen whether Bitcoin Cash can hold its own in the long term.
The bottom line is that the scaling debate is only likely to be resolved temporarily, as Bitcoin transactions still take too long compared to the traditional monetary system.
For comparison: While the Bitcoin network with SegWit and SegWit2x is expected to manage 20 to 50 transactions per second, the Visa card provider can process 2,000 transactions per second.
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