Scared of scalability in BTC? Bitcoin Cash shows definitively that there’s no reason to be.
Okay, so maybe there are a few other things about bitcoin cash that help it stand out from its originator, bitcoin. Specifically now, as the two cryptocurrencies continue to evolve in their own ways.
Scalability, or how readily a cryptocurrency is able to handle ever-increasing workloads as the system becomes more widely adopted and more often used. Bitcoin has struggled with the concept of scalability since it’s beginnings, with no clear vision on how it would combat the necessary changes involved with increased adoption.
These growing pains caused the system to undergo a hard fork, resulting in two very different, yet highly tradable and useful coins. Don’t know which to pick? Don’t! Having a bit of both coin can prove to be an excellent trading strategy, especially if you’re new to trading platforms. Most exchanges, like Bitvavo, are happy to offer both bitcoin and bitcoin cash to their clients. Making the choice- or lack thereof- incredibly simple.
What Are Forks?
Forks play an important part at the dinner table and in cryptocurrency. But one has absolutely nothing to do with the other. Cryptocurrency forks occur when the developers, miners, traders, or any other part of the crypto community can’t agree on how any particular cryptocurrency should progress.
When there is a change in protocol that is largely agreed upon by the majority of the community and the change is backward compatible, this is considered a soft fork. Soft forks generally introduce some type of new feature or program that users can choose to either run the new program or continue running the older versions. The soft fork will work with older versions of the system and vice-versa. Keeping in mind that if users choose not to implement the newest version of the system, they’ll still be able to use that cryptocurrency as usual, but they won’t have access to any of the features added to the soft fork.
A hard fork happens when communities just can’t reach consensus about how the system should be changed- or if it even should. This causes the community to split, with one group continuing on with the original system, and the other using the new one. Hard forks are not backward compatible, meaning that this new system will not continue to work with the original.
Bitcoin Cash vs. Bitcoin
The hard fork is exactly how bitcoin cash was created. In 2017, some bitcoin users believed that bitcoin blocks were far too small and that they couldn’t keep up with heavy orders. The transaction rate of bitcoin is only about 4.6 per second when high transactional demand is placed on the system, large queues ensue and it can take a very long time to get orders verified and put into blocks. This is largely because bitcoin blocks have a maximum capacity of 1MB, holding only about 2700 transactions. Which is surprisingly slow when compared to other payment systems or alternate cryptocurrencies.
On top of taking ages for transactions to get verified, bitcoin offers a “queue jumping fee” which means that for extra money, you can get your transaction bumped up in the queue. During times of high trading volumes, these fees have reached astronomical heights. To combat this- one group of users suggested increasing the block capacity. Proposing that this increased block size would allow more transactions per block and keep confirmation times and fees down- making it more accessible as a global payment system, as opposed to just a store of value.
They supported increasing the block size to 8MB. However, another group suggested that this would only limit the access of everyday miners to the community- as bigger blocks required more computing power and more advanced (and expensive) hardware. Making mining cost-prohibitive for everyone but big businesses. To address scalability, this camp suggested merely optimizing the transaction size and mining.
Also Read: Top Five Ways You Can Purchase Ethereum
The two camps couldn’t find common ground and eventually bitcoin split into bitcoin (small, optimized blocks) and bitcoin cash (larger blocks). Each with their own group of supporters and traders. Bitcoin cash has so far shown to be one of the most successful hard forks in the history of cryptocurrency.
Vote With Your Wallet
Even if you’re not a developer, and have no interest in becoming a miner, as an everyday user of cryptocurrencies, you have the power to help make decisions about forks. By simply owning a specific type of cryptocurrency, you’re essentially casting a vote that says “This is the fork for me”. Using associated applications and software- like wallets or exchanges that support certain forks, you’re actively adding to the community that breathes life into the advancements of these coins.
One of the biggest ways in which bitcoin cash was able to showcase its novel features as a way forward was by public involvement. Everyday people trading, storing, and transacting bitcoin cash kept this crypto in the game- and made it one of the top altcoins. So when you’re wanting your voice heard when it comes to crypto functionality- don’t forget to vote.