What Is Bitcoin Cash?
After two years of stormy discussions on the future of the currency, Bitcoin, the most popular cryptographic currency in the world, has split into two currencies. So, what is the meaning of this split and what are the implications for users?
What is divide?
Division- or fork in English – is a situation where the blockchain, the software that forms the infrastructure of the cryptographic room, created two versions of the same piece that share a common “story”. The division may be temporary and may take up to a few hours or as in our case, a regular division and the creation of a new cryptographic currency.
The currency is going well in this moment. Why divide?
As we know, the Blockchain technology on which the Bitcoin is based uses data blocks, which are checked by the various computers on the network, and added to the database of all monetary transactions. However, since the Bitcoin network is limited to a block size of 1 MB, only 7 transactions per second (tps) can be verified. By way of comparison, Visa Worldwide validates about 2,000 transactions per second on average, with a maximum of 56,000 transactions per second. The result is a bottleneck that results in delays in Bitcoin’s transactions.
And when we say delay, we hear, for example, a user of Bitcoin who made a purchase in a store and had to wait 28 days to approve the transaction.
Everybody agrees that there is a problem. But then what?
The global Bitcoin community had two options to solve the problem.
Segwit2X – segregated witness – a preview of an emergency meeting of the Bitcoin community in New York. In short, the layout, which is supported by the currency developers community, involves two steps: first, dividing the information of each transaction so that it enters the block more efficiently, more effective verification mechanism; As part of the second phase of the plan, the size of each block is doubled to 2 MB, and by 2018 each block will be increased to 4 MB, making the verification process much more efficient and quick.
The great advantage of this solution is that it is a soft division (sort fork) which, on the one hand, allows an immediate increase in the volume of the blocks checked and, on the other hand, does not need to upgrade all nodes, such as the hard fork. The fear is that, within the framework of a “hard division”, all the junctions will not be upgraded, which will oblige them to reject the blocks legitimate, to refuse transactions, to load, to lose coins and, in short, to a big disorder. In addition, the change will require hardware upgrades and, therefore, a relatively small number of reactors will monitor transaction verification.
On the other hand, there is a small group of Bitcoin reactors, which support a drastic and immediate step and require an immediate increase of each block at 8 MB.
As is appropriate for a decentralized currency, without the governor of a central bank defining the policy. It was decided to obtain community consent by running the Segwit2X trial and receiving “pings” approval. The goal was a positive response from 80 percent of users. Although Segwit2X seems to have approved the “soft division”, the miners group announced yesterday that the split came into effect on August 1.
We have BTC Bitcoin and BCC cash bitcoin!
Will my Bitcoin be automatically converted to Bitcoin Cash?
No. In the first step, you need to know if your electronic wallet (purse) supports splitting. If so, the conversion will be done and you will have the same amount of Bitcoin and Bitcoin Cash. Otherwise, you will need to pull your Bitcoins to a local portfolio with your key and transfer them to an electronic wallet that supports splitting.
How much are current currencies?
Of course, values change every second, but from that moment on, a Cash Bitcoin is worth about $ 425; The Bitcoin itself is $ 2,736.
What is the rarity of this split?
The division of cryptographic pieces is not uncommon. Recently, the Etherium part was split into Etherium Classic. But Bitcoin is certainly the dominant and most popular cryptographic currency in the world, hence the importance of movement.
And who will win?
Here no one is willing to prophesy. Only time will tell if Bitcoin Cash will survive, equaling or even exceeding the original Bitcoin.