The appearance of Bitcoin was marked by its great popularity, which grew at a tremendous rate, which led to the fact that places in the blocks became practically not enough. Because of the fact that the number of transactions has grown rapidly, it could take several days for one transaction.
Yes, the problem with this technology is that it is slow. And this problem had to be solved immediately. Here a prime example is Visa, which on average produces up to 1,700 transactions per second. How many transactions can Bitcoin perform in one second? Seven. And they take about 10 minutes. And as the number of Bitcoin users increases, the waiting time will increase, as the number of transactions themselves increases.
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Also, after some time, users noticed double write-offs, the danger of cyber-attacks and cases of violation of anonymity. And this problem, which consisted in scaling and increasing the speed of the process of verifying transactions, had to be solved. Either by changing the block size, or by changing the information that is included in it, but at the same time preserving the integrity of bitcoin.
In the middle of July 2017, the big miners spoke in favor of implementing a protocol known to everyone as SegWit2x. This protocol was to reduce the amount of data in the block, removing the signature data and taking it out of the block. Also, to improve the scalability of Bitcoins, it was decided to increase the block size from 1 MB to 2 MB. In turn, the independent miners and ordinary users opposed the hardfork, claiming that it would save their self-production capabilities.
But Bitcoin Cash has a different story. Miners and developers Bitcoin worried about the future of the cryptocurrency and its ability to scale effectively. Therefore, on August 1, they initiated the so-called hardfork, creating a new currency - Bitcoin Cash. The block size was increased to 8 MB and regardless of the number of participants, this should speed up the data verification process. But this, in turn, raised concerns about the safety of Bitcoin Cash.
Such development can mean anything for a new cryptocurrency. The situation is very urgent, and market valuation is constantly calibrated and changeable. It will be difficult to get a clear picture, while Bitcoin Cash does not work for a while (or does not work), the impact of SegWit2x technology is assessed, and the size of bitcoin blocks doubles.
Earlier, in one of his blogs, Professor of NYU Stern School of Business (USA) Aswath Damodaran, said that the future of cryptocurrency as a currency, unlike a speculative asset (since it is so often processed), depends on developers of cryptocurrencies who think of their technology as about the transaction environment and act accordingly. Both actions seem to be aimed at improving the technology of cryptocurrency as a means of exchange.
The development of the cryptocurrency in terms of transactions will depend on how well the security level that has always been present in Bitcoin, and also on improving their speed, is maintained. Bitcoin will continue to provide security, but it remains unclear whether the speed of his transactions will improve. Bitcoin Cash, after establishing its complexity, can process transactions in 2.5 minutes.
The adoption of the cryptocurrency will depend on the vision of the miners and users. If Bitcoin does not justify their expectations, destroys the decentralization and democracy of blockchain technology, then in this case, everyone has the right to choose another cryptocurrency with better potential.
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As a result, a new coin exists in parallel with the old one. The rest on users' wallets has doubled. The cost of Bitcoin Cash at the very beginning was approximately 7-8 times cheaper than the original Bitcoin, the cost of which, in turn, fell by about 5-6% during the fork. But, under such circumstances, the owners of savings still won. Now many people are concerned about the following question: will these two currencies withstand the confrontation.
Now many people are concerned about the following question: will these two currencies withstand the confrontation. The speed and cost of transactions of these two networks are very different. Bitcoin is inferior to his fork and it still has something to work on. And if it fixes his scalability problem, then the option of Bitcoin Cash depreciating is possible. But while this new currency confidently takes a leading position.
Editor: Yuliya Soroka