Bitcoin technology has been under discussion around a core issue, namely scaling up and speeding up the transaction verification process. In the early days of Bitcoin, the block size was limited to 1MB. At first, this restriction guaranteed that personal computers could participate in it, and also prevented the attacker from overloading the Bitcoin network. Under the 1MB limit, a block can hold up to 2000 transactions in 10 minutes, which is also the number of transactions 7 tps (transaction Counts / second). As bitcoin gets more and more attention, the limitations of bitcoin's throughput rate become increasingly prominent.
BCH derived to solve performance problems
Developers and miners have proposed two main solutions to this problem. The first voice is from mainstream miners. They asked the Bitcoin network to modify the block size from 1MB to 8MB blocks to improve the current bad transaction situation. The second voice is mainly from the core developer Core A small number of community members who advocate the Segwit + Lightning Network proposal proposed by Blockstream. On August 1, 2017, Bitcoin Cash (BCH) performed a hard fork at a block height of 478558 and distributed according to Bitcoin 1: 1, with a total of 21 million. Compared to Bitcoin, it expanded the block size to 8MB, and further hard-forked to 32M in May 2018. Bitcoin and Bitcoin Cash have the same ledger before the fork. Those who own Bitcoin before the fork will receive BCH 1: 1.
Although BCH has expanded the capacity of the block, it still needs to face many problems. The forked BCH needs to modify the difficulty adjustment algorithm in a timely manner, because the BCH's block production speed standard setting and the encryption algorithm used in the proof of work and the halving mechanism still follow the BTC rules. Both use the same type of mining machine. Share common computing power. If the difficulty is not adjusted, the higher difficulty and the difficulty of BCH to produce blocks will definitely introduce a death spiral. BCH's EDA adjustment mechanism and the later optimized DAA adjustment mechanism are to solve this problem, making BCH's difficulty adjustment more flexible to ensure that it can survive.
The imbalance between the balance of the coin price and the computing power of the machine gun pool
The mining power and profit of BTC and BCH are directly proportional . The current BCH currency price is 3.3% of BTC (March 11, 2020), so the computing power of BCH is also 3.3% of BTC. The ratio between the two cannot always be balanced, and when there is an imbalance, the miner only has an optimal mining option, and the machine gun pool is born. The machine gun pool is a type of mining pool. It determines the most profitable currency based on computing power, mining difficulty, and the current price of the trading platform. It can quickly smooth this spread. If the computing power ratio of BCH does not reach 3.3% at this time, the computing power will flow to the BCH mining with higher returns until the computing power ratio reaches 3.3%.
Can BCH halving in advance still ensure safety?
BCH is expected to be halved one month ahead of BTC. Will the network be secure by that time? First, let's take a look at BCH's current DAA difficulty adjustment algorithm, which has the following characteristics: 1. Adjust the mining difficulty block by block; 2. The mining difficulty of each block is adjusted based on the calculation power of the 144 blocks in front of it; 3 When the computing power changes exponentially, the network will quickly adjust the difficulty to ensure fairness; 4. Avoid feedback oscillations caused by the mismatch between the current computing power and the target difficulty. The above characteristics of the DAA algorithm ensure that even if the computing power drops by 50% instantaneously, it will only have a short-term impact on the block output speed of the BCH. The DAA algorithm can quickly adjust the difficulty according to the actual computing power, so that the block output time returns to a normal level. After understanding the DAA mechanism, you can understand that the impact of halving on network security is minimal, but it only affects the block production time of the previous BCH. After the block is stabilized, a new balance will be generated.
Transaction fees are the foundation of the future
For miners, transaction fees are the future. The third halving is imminent, and the block reward will be 6.25 BTC. Satoshi Nakamoto had predicted that "Bitcoin will be dead in 20 years or the transaction volume will be very large." Now it is the eleventh year of Bitcoin's birth. In another ten years, Bitcoin's block rewards will become very small. By then, the fees for on-chain transactions will be the main source of income for miners. Regardless of BTC or BCH, for miners, transaction fees are a long-term measure.
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