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Why was Bitcoin Cash created? Did you know?

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Bitcoin Cash was created to return the essential money features inherent in the original Bitcoin software. Over the years, these qualities were removed from Bitcoin Core and progress was slowed by several people, organizations and companies involved in the development of the Bitcoin protocol. The result is that Bitcoin Core is currently unusable as money due to the increasingly high transaction fees and transfer times that can take from hours to days. All this is due to the problems created by the fact that the Bitcoin Core blocks are full.

The Bitcoin Core developer and the Blockstream CTO is one of many "experts" who consider a slow and expensive network to be ideal.

Basically, "blocks" are groupings of new transactions that are added to the blockchain or blockchain. In Bitcoin, transactions are processed block by block. Bitcoin was designed to reach 6 blocks per hour, or one every ten minutes. Years ago, an artificial limit to the size of the blocks was added to the Bitcoin Core code to avoid a possible attack vector in which a massive number of transactions could weaken the network. At that time, the transactions were free, so an attacker could send a large number of transactions from their own wallets, forcing everyone else on the network to download and store large amounts of data. The block size limit was arbitrarily set at 1MB (that is, the storage size offered by a floppy disk since the mid-1980s). At that time, this was thousands of times higher than the actual use of the network demanded. It is clear that the block size limit was never intended to stifle network growth, but simply to defend against a theoretical attack vector.

Bitcoin adoption by users began slowly, and it was not until 2012 that the blockchain processed 250 transactions per block, or approximately 1,500 transactions per hour. This number took two more years to double, and in 2014 the Bitcoin network was processing 500 transactions per block.

Today, the Bitcoin Core network is at full capacity and processes approximately 2,500 transactions per block.

The artificially small size of the blocks caused network congestion as the demand for bitcoin transactions has continued to grow. Remember, to be verified and processed, a bitcoin transaction must be included in a block. If the blocks are full, your transaction must wait to be included in the next block, but the next block is already full because others who paid a higher rate than you. This congestion has led to a growing "rate market" in which users pay more to "cut the queues" and place their transactions at the top of the list of pending transactions, known as the mempool. At the time of publication, there are more than 280,000 unconfirmed Bitcoin Core transactions.

To make matters worse, Bitcoin Core developers did not want or could not increase the block size to scale Bitcoin with demand. In their own words, Bitcoin Core developers see this "tariff market" and the accumulation of transactions as a positive feature of the Bitcoin Core network.

This has caused many community members to create alternative cryptocurrencies as the frustration with Bitcoin Core increased due to increasing rates and transaction times, which are getting longer and longer. As a result, Bitcoin Core has gone from a market share of almost 100% in crypto space to less than 50% at the time of publication.

Bitcoin Cash appears: A community-activated update (also known as a Bitcoin hard fork) that increased the block size to 8MB, solving the scaling problems that affect Bitcoin Core today.

A misunderstanding of the economy led to the failure of Bitcoin Core and the birth of Bitcoin Cash.

Block size? Again what is that?

To describe how the block size limit affects the speed and cost of transactions in the blockchain, let's use the following example:

It's Saturday night and you're about to visit the coolest club in the city. Before this club became a great event, it was a small place with a small audience, good music and drinks at reasonable prices in a small place.

Suddenly, people started talking about this place and telling their friends, and now everyone wants to enter. The problem is that the club is in a building that can only accommodate 2,500 people. In this analogy, think of the club as a "block", with limited storage capacity or size, and think of each customer as a bitcoin transaction.

When the club (block) is filled with 2,500 people (transactions), the bouncer / goalkeeper is instructed to form a line and start charging an increasingly high fee (transaction fees) for entry. More and more people keep coming to the club, and as of today, the situation has become so bad that the line of people waiting outside is approximately 270,000 people and the average entrance cost is up to $ 140. You have been waiting patiently for hours to get in, but people willing to pay more keep jumping in front of the line and keep the club full. Worse, each person (transaction) is only allowed to bid once for that rate. When you first got in line, you thought paying $ 20 would be enough to get in quickly, but now several thousand more people have joined the line and said they would pay more than you. There is nothing you can do except wait until everyone pays until you get to the front of the line and the gorilla lets you in.

Despite this situation and the many complaints of the community, the club management has stubbornly refused to move or build a larger building, and insists that a full club and ten times more customers queuing outside is not only good for the business, but it would be impossible to expand your building to accommodate more customers, even if they wanted to.

In Bitcoin Core, the mempool is the line of people waiting to enter the club and the transaction fees are the rates that the gorilla asks you to enter the club with a capacity for 2,500 people.

At an average cost of up to $ 140 per transaction and a line of more than 270,000 unconfirmed transactions, Bitcoin Core, a system that was created to be explicitly an “electronic P2P cash system,” has become unusable for merchants and has left most users in developed countries out of the game, not to mention the totality of users in smaller developing countries.

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Comments

It is a thing of habit and habit and break with the traditional and common in the systems of payment and use of the currency. Here in Venezuela it is being commercialized with cash dollars and it is something new among us

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