Bitcoin Cash is a cryptocurrency that came from the fork of Bitcoin Classic that was created in August 2017. Since its launching, Bitcoin faced pressure from community members on the topic of scalability. Especially, that the size of blocks — put at 1 megabyte (MB), or 1,000 bytes, in 2010 — could slow down trade processing times, hence limiting the currency’s potential, just as it had been gaining in popularity. The block size limitation was added to the Bitcoin code in order to reduce spam attacks on the community at a time once the worth of a Bitcoins had decreased. By 2015, the value of Bitcoins had increased and average block size had reached 600 bytes, creating a situation in which transaction times could encounter delays as more blocks reached maximum capacity.
A range of suggestions have been made to manage transaction processing over the years, frequently focusing on increasing block size. Because the Bitcoin code isn’t handled by a central authority, changes into the code require buy-in from programmers and miners. This consensus-driven approach can lead to proposals taking a very long time to finalize. This has caused groups to create separate blockchain ledgers employing new criteria, called a fork. Several forks, for example as Bitcoin XT and Bitcoin Unlimited, failed to be adopted by a wide audience. Bitcoin Cash, established in August 2017, is another branch from Bitcoin Classic.
Bitcoin Cash differs from Bitcoin Classic in that it increases the block size from 1 MB to 8 MB. It also eliminates Segregated Witness (SegWit), a suggested code modification designed to free up block distance by removing certain areas of the transaction. The objective of Bitcoin Cash is to increase the number of trades that may be processed, and supporters hope that this shift enables Bitcoin Cash to compete with the volume of transactions that PayPal and Visa can manage by raising the size of blocks.
Because the computer power required to process bigger blocks could price out some smaller miners, critics worry that adopting Bitcoin Cash’s strategy will cause power being concentrated in the hands of businesses which can afford more and better gear. Opponents to the fork stress that this will sabotage the consensus-driven strategy to Bitcoin, as a few companies can control Bitcoin and much more readily force changes on the community later on.
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