Bitcoin was just too busy – it needed a bigger block size. That’s basically what all the fork talk’s about. Since humans tend to disagree on how things should be done, some people in the crypto community want to create their own version of Bitcoin – a “hard fork”. A few months ago it was Bitcoin Unlimited, now it’s Bitcoin Cash. But hang on, the core developers at Bitcoin have already doubled the block size with activation of Segwit. Sounds like another dash for cash.
With an average of 233,000 transactions per day, the blockchain is bustling. Bitcoin is now the digital reserve currency globally, meaning all other crypto transactions are backed out into Bitcoin. In fact, most of the major digital currency exchanges don’t even accept fiat anymore.
Because there’s an inbuilt cap on transaction volume (to prevent spam and DoS attacks), all the increased traffic caused trade delays and sometimes the blockchain just froze up from all the frenetics. Improvements were required.
Changes to Bitcoin code are called “Bitcoin Improvement Protocols” (BIP’s) and can only be implemented through consensus (90% of miners must agree). Individuals who pitch a new protocol and can’t get support split off, “hard fork” and create an alternate blockchain / coin, called an “alt coin”.
It’s already happened – Litecoin was the result of a Bitcoin hard fork in October 2011. How’d it go for Litecoin? At the split Bitcoin was $US5 and is now trading around $US3000. Litecoin is still at $US40.
Earlier this year a new camp calling themselves Bitcoin Unlimited pitched the idea of removing all limitations on block size – hence the “unlimited”. Now I’m not a programmer, but even as a civi I assumed this move would open the blockchain up to DoS attacks. Everyone knows the joy of Bitcoin is based on its hack-free history. Guess there was some merit to my musing because… well, it never happened.
Now it’s Bitcoin Cash. Who are they? Beijing-based mining firm BitMain, are the instigators. The rest of the world – bitcoin companies, mining pools, users and developers appear apathetic.
The fork debate is not new – neither is increasing the block size. The Bitcoin community has always managed scalability with security. Bitcoin Core’s solution was implemented: SegWit (BIP 91). Signature data from transactions were removed, freeing up space in every block.
Something’s got to be said for a company that only makes decisions based on consensus. Go Bitcoin Core. What do we say about all the forkers? My dad was no IT expert, but he did say, “Imitation is the sincerest form of flattery”.