Bitcoin has been actively trading for nearly a decade. Since it was established, there have been many inquiries surrounding the ability of miners to scale the digital currency effectively. The cryptocurrency that exists within a blockchain as part of a network of computer servers that use cutting-edge technology to generate digital currencies. The beauty of cryptocurrency is that it’s very difficult to manipulate. That’s because it verifies by many miners in a decentralized network. Since the process of its mining is so complex, the amount of power needs to run the algorithms that create is expensive and slow. The introduction of Bitcoin Cash increased the scalability of Bitcoin.
The Difference Between Bitcoin and Bitcoin Cash
It became apparent that the amount of power needed to generate a Bitcoin is extensive. This could become a problem. In mid-2017, the vast majority of Bitcoin miners voted to introduce a new technology. It would allow the verification process to be streamline. This process, called ‘SeqWt2x’, makes verification processes in each block lighter. It does this by eliminating the signature data from the block of data that needs to be evaluating in each transaction.
Blockchain miners believe that the signature data accounts for nearly 60% of the data that is processing when creating each block in the chain. Therefore, the amount of computer power need will be reducing. This helps to improve the scalability of bitcoin. In late 2017, the first block of 1GB of blockchain was introduced that was nearly 1K times larger than the normal size. Despite this faster production of Bitcoin, it is still very slow when comparing to the technology that is in use for current currency transactions. For example, Visa and Mastercard produce 150 million transactions per day or 24K transaction per second. Compare that with the up to 7 transactions per-second generated by Bitcoin.
With a processing time of 10-minutes per transaction, it becomes clear that Bitcoin’s transaction process is too slow to replace fiat currencies-especially in retail transactions. As more people become interested in bitcoin as an investment, the wait times will only become longer.
The debate surrounding the blockchain technology that is in use to generate bitcoin focused on scalability. This eventually led to the altering of the process. The key to a faster bitcoin is to either make the blocks larger or make the amount of data that needs to be verified smaller. This consideration led to the introduction of Bitcoin Cash.
Bitcoin cash developed by miners who were focusing on the scalability of the cryptocurrency. The development was less focus on the need to have witness technology as the verification process. They also believed that there was a need for specific criteria to allow Bitcoin. It is to become mainstream and therefore increase its ability to scale. Bitcoin cash was introduced in the summer of 2017. The solution was to generate a larger block size of 8mb. This enhanced the verification process and accelerated the speed at which a coin could be created. Bitcoin Cash is a solution to a scalability problem. However, it also comes at the expense of verification (and therefore security) when generating a digital coin.
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