Bitcoin, a popular cryptocurrency has garnered attention from every nook and corner of the world, after its price surged up to $7500 this November (2017). Bitcoin has been in news ever since, the discussion about cryptocurrency and digital cash flew in the market and people started investing in it like crazy. Speculations had it, that Bitcoin was just a bubble that will burst soon, and that the investors will lose all their money, when it touched $500, but nothing of that sort happened, and the price was rather swollen to touch heights, nobody had ever imagined.

Bitcoin and Blockchain

Bitcoin is a decentralized currency, which isn’t owned or controlled by a company or even a government. As democratic as it gets, it is completely in the hands of people and the people mine it, using the computing power of their computers. Now, mining has become hard, but trading and investments still happen and, continue to grow at a large scale.

Just like any processing any transaction, bitcoin runs on blockchain algorithm. But the transactions it processes every minute are really less. Consider VISA for example, it processes around 150 million transactions per day, narrowing down to as many as 24’000 transactions per second, while bitcoin is able to process only 7 transactions in one second, and one block is processed every ten minutes. Which means roughly 480 transactions in a minute. It is ridiculously slow, compared to other technologies, which are controlled and centralized.

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The Future of Bitcoin and Transactions

As the Bitcoin network will continue to grow, so will the transactions, and naturally, the waiting time will also increase. Therefore, the miners argued that there exists a dire need to scale the transactions, and also increase the speed of verification process. Right now, the amount of data that needs verification in one block is limited to 1MB. There are two proposed solutions to this underlying problem – either increase the block size, i.e. make the block accept 2MB of data in one go, or reduce the data that enters for verification, thereby making the transactions faster.

Now, since the number of people entering the cryptocurrency world is increasing ever since. The transactions are piling up. Imagine if no change is made, and the transactions sometimes take as long as an hour to be verified as valid, there will soon be piles and piles of transactions lying on the blockchain network to be verified, which will ultimately weigh down the entire system, and make it unsustainable.

What is SegWit2x?

In July 2017, miners of Bitcoin agreed to incorporate a technology called SegWit2x (segregated witness 2X), which removed the transaction signature from each block, hence reducing the block-size limit on a blockchain, to make the transactions faster and smoother. Segregation of the witness (transaction signature), also aimed at accepting the blocks of 2MB each, instead of 1MB, hence doubling the size of the block, which would further add to the speed of transaction verification process. It was proposed for November 14th, 2017, and it was much awaited and anticipated event in the history of cryptocurrency!

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But recently, it was cancelled. Let us know why, but before that, let’s also understand – what is Bitcoin cash?

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Bitcoin Cash

Bitcoin Cash is another story altogether. Miners and developers of Bitcoin, started Bitcoin Cash only because they did not believe that SegWit2x would bring much change in the transaction capacity or speed of bitcoin in the long term, because ultimately Bitcoin would need such segregations regularly to remain updated and maintain its speed of transaction verification. Bitcoin Cash was a result of Hard Fork of Bitcoin Classic that happened in August 2017 and Bitcoin Cash has block size of 8MB, along with many other features that Bitcoin does not have.

But why the Resistance?

Now, whenever a hard fork happens, the bitcoin community is split into two. Like earlier, Bitcoin split into Bitcoin and Bitcoin Classic, which gave birth to Bitcoin Cash. Ethereum too split into Ethereum and Ethereum Classic. This creates ruffle in the community and miners do not welcome this change. They believe that a hard fork will give more power to bigger mining pools, and subsequently it will make the currency centralized in a way, which is totally against the ground rules of cryptocurrency. Increasing the block size also means reduction in the fees that miners get to verify a transaction, which again, isn’t something welcomed in the miners-community.

Moreover, whenever a fork happens, the coin owners also get equivalent amount of new coin currency, may it be Ethereum Classic or Bitcoin Cash, provided your coins are with you, and secured with a private key and not lying in some exchange. But, with a fork, also comes danger of security and attacks.

The recent cancellation of SegWit2x is seen in the positive light, since the miners-community views it as a restoration in the underlying principles of cryptocurrency. Of maintaining its status of decentralized money, and also securing miners’ right to getting paid for their work. They believe that forks can destroy the very essence of cryptocurrency and in the long run, it can make the money governmental too! Small miners are happy, as the cancellation has happened in their best interest.

Cryptocurrency is in every way – people’s money, and efforts are constantly being done to keep it that way. But the future always unveils great surprises! Whether Bitcoin is actually a bubble on the verge of bursting or, it emerges as one of the most powerful digital currencies of the future – is something that only time can tell.

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