The original version of Bitcoin has always had problems with scaling. When you use Bitcoin’s blockchain your transaction must be encrypted and secured by miners – and considering that Bitcoin’s technology is getting a little dated, it’s having trouble handling the growing number of requests that are being asked of it. This problem is only going to get worse as more and more people start to use the world famous cryptocurrency.
What is Bitcoin Cash?
Bitcoin Cash is a fork of the original Bitcoin Blockchain. It operates with a number of changes that make it faster and better able to scale when compared to its older brother.
It does this by introducing a block size of 8mb, up from Bitcoin Classic’s 1mb. This increase in size allows more transactions to be entered into each individual block before they’re encrypted into the blockchain. This allows more transactions to be processed at once, and so vastly increases the speed of the entire process - allowing transactions and currency to move and be confirmed faster.
This allows Bitcoin Cash to retain the security and utility of the Bitcoin blockchain, while having the ability to deal with transaction volumes close to that experienced by Paypal or Visa.
Bitcoin Cash came into life by way of a ‘hard fork’ which is essentially a software update to the Bitcoin blockchain, which brought Bitcoin Cash into life following new rules. From that moment on, Bitcoin and Bitcoin Cash parted ways and carried out transactions that were independent of each other as two separate currencies.
Concerns were circled around Bitcoin Cash’s fork for a few reasons.
Firstly the increased size of each block makes the mining more intensive, which could price some of the lower yield miners out of the market. This could lead to larger corporations controlling the mining of Bitcoin Cash as only the larger operations would be able to make mining profitable, which goes against the theme of a blockchain being a decentralised network if corporations are able to dominate it.
Bitcoin Cash solved some of the issues that still plague Bitcoin to this day, although with the promised Lightning Network coming to Bitcoin at some point this year – Bitcoin’s ability to scale may well be vastly improved.
The cryptocurrency space is growing an evolving almost by the day, so it’s almost impossible to tell what will happen tomorrow, let alone next year. Bitcoin Cash has a solid foundation though, and currently sits as the fourth largest cryptocurrency by market cap at $1,265.78 per coin.
With newer technology emerging by the day that promises to compete heavily with Bitcoin Cash such as Nano (XRB), Ripple (XRP) and projects that are further out still such as Request Network (REQ) – it may start to fall behind. However, it still carries the Bitcoin name and the importance of branding and market recognition can’t be overstated.