Albert Einstein once said: “if you can’t explain it simply, then you don’t understand it well enough”. That is the goal I intend to achieve in the post; to explain the reason behind bitcoin cash creation in simpler terms. Let’s get right into it.
INTRODUCTION
Bitcoin cash was created on august 1st, 2017, close to 3 years now and since its creation till date people don’t know the MAIN reason why it was created including some of the BCH community enthusiasts. They are just only aware of the fact that there is existence of a cryptocurrency called bitcoin cash in which they have interest in. they invest in it.
They purchase it, earn it from tipping, and earn it from faucets and what not. They also use it for business transactions due to the fact that it is faster and cheaper. As a matter of fact, they like the fast feature relative to other features that bitcoin cash possesses.
I think that knowing what causes this fast feature will enables us all (especially those that are unaware) to appreciate bitcoin cash more and contribute relentlessly to the growth of the bitcoin cash ecosystem like never before.
The events that led to the hard fork
BITCOIN MINING
The reason for bitcoin cash creation hinges on the mining of bitcoin. Bitcoin miners earn bitcoin by verifying transactions and clumping these transactions in “blocks” and adding them to the blockchain. In order for bitcoin miners to earn bitcoin from verifying transactions, two conditions have to be satisfied;
1.They must verify 1 megabyte (MB) worth of transactions, which theoretically may be as small as 1 transaction but are more often several thousand, depending on how much data each transaction stores.
2.In order to add a block of transactions to the blockchain, miners must solve a complex math problem also known as “proof of work”. What they are actually trying to do is trying to come up with a 64-digit hexadecimal number, called a hash that is less than the target hash. This in itself is a difficult exercise. Read on…. We are almost there!
Emphasis will be on the 2nd condition above.
As an analogy, say I tell two colleagues of mine (lets label them, colleague A and colleague B) that am thinking of a number between 1 and 90, and I write that number on a piece of paper and seal it in an envelope. My colleagues don’t have to guess the exact number, they just have to be the first person to guess any number that is less than or equal to the number I am thinking of. And there is no limit to how many guesses they get.
Let’s say I am thinking of the number 25. If colleague A guesses 27. He lost because number 27 is greater than 25. If colleague B guesses 13, then he has arrived theoretically at viable answers.
Now imagine that I pose the “guess what number I am thinking of” question, but in this case I am not asking just two colleagues and I am not thinking of a number between 1 and 90.
Rather, I am posing the question to millions of would-be miners and I am thinking of a 64-digit hexadecimal figure. You would agree with me that it is going to be extremely difficult to arrive at the correct answer. This is the task that miners face daily.
The problem at the centre of the bitcoin ecosystem is that known as “scaling” scaling is just the ability of bitcoin to rise above the difficulty level in mining operations. Two major solutions were however put forward to trash this scaling problem. Developers had reasoned to;
A.Decrease the amount of data needed for the verification of each block and
B.Increasing the number of transactions that each block can store.
BITCOIN CASH WAS FORKED/CREATED
In July 2017, mining companies and bitcoin miners representing roughly 80% to 90% of the bitcoin network’s computing power voted to include a program that would function to decrease the amount of data needed for the verification of each block. That is, they settled with solution A.
Less than a month later in august 2017, a group of bitcoin developers and miners initiated a hard fork (a bitcoin hard fork in simple terms basically refers to the improvement on bitcoin’s protocol in terms of transaction speed, security etc. summarily new functionality to the bitcoin protocol).
This hard fork left the bitcoin network to create a new cryptocurrency. The new currency however uses the same codebase as bitcoin. Having settled for solution a, the group advocating for solutions to the scaling problem realized that solution A (Decrease the amount of data needed for the verification of each block) wouldn’t solve the scaling problem completely and so they settled for solution B (Increasing the number of transactions that each block can store)
The resulting cryptocurrency called bitcoin cash, increased the block size to 8 MB in order to accelerate the verification process to allow a performance of around 2 million transactions per day.
Thus making solution B a welcome development and a great solution. So in the most summary sense of it.
Bitcoin cash makes use of same technology as bitcoin but we can just say it is the reinforced version of bitcoin. I day trade bitcoin cash and I must say that the speed of the transactions beats my imagination especially when I request withdrawal on trading platforms.
Last night at exactly 8:45 pm, I requested a withdrawal of dogecoin and as at the time of writing, I am yet to receive the coin in my dogecoin wallet. The website had already sent it to my wallet but it is yet to be confirmed on the doge blockchain. WTF!
What can I do? You guessed right! Exchange the doge to bitcoin cash before requesting for withdrawal.
That way I am saving myself the stress from waiting time and also contributing to the growth of the bitcoin cash ecosystem. I hope you learnt one thing or two from this article. Did you feel I left anything out? Let me know in the comments section.
Thanks for reading.