August 1 of the current year, there was a branch of the largest cryptocurrency according to parameters such as capitalization and the exchange rate, which showed a new kryptonic – Bitcoin Cash. Despite the great success of Bitcoin, this currency had some problems that were supposed to be solved in several ways. In the end, it was selected to create a fork.
Prerequisite of Bitcoin Cash creation
As you know, for the functioning of bitcoin uses the technology of the blockchain – a sequential chain of blocks, in which “Packed” transaction records. The creators of bitcoin have introduced a limit on the size of the blocks is equal to 1024 KB. Initially, the number of transactions was relatively small, so no functioning problems did not arise, but the likelihood of DDoS attacks was very low. With the growing popularity of the currency has increased the number of transactions that no longer “fit” into the block and detained in the so-called “queue”. In late spring this year, the situation approached critical, many users had to wait a few days to complete the transfer of funds. To increase the priority of the transaction, you can increase the amount of the Commission, but this leads to inappropriate use of currency.
Experts have proposed two methods that could solve the problem with delayed transactions:
- To increase the block size. This initiative supported the miners, as it helped increase their profits (more transactions in the block the higher the fee). According to the developers, the withdrawal limits of 1 MB can lead to centralization and the need for a more productive computing.
- To bring some data outside the blockchain. Developers advocated for this initiative, because this way you can free up space in the unit, making it available for transactional records. Proponents of the first way believed that this decision will give only temporary results.
In trying to account for the needs and wishes of both users and developers, was established SegWit2x Protocol, according to which a certain amount of data must be stored outside the network, and the block size is doubled. More than 95% of miners supported him in the vote held on 20 July. According to the decision, it was assumed the introduction of a new Protocol on 1 August, however an increase in the size of the unit, it was decided to postpone. Some felt that this option will only postpone the problem and will only suit those who are interested in investing in cryptocurrency, and not use it to make payments.
The team led by Amaury Seceta (former engineer of the social network Facebook) refused to use the new Protocol and created a branch currency, called Bitcoin Cache. The structure of the blockchain, it was decided not to change, and the block size to increase in 8 times. New virtual currency appeared 1.08.2017 years and has a common history with Bitcoin, but since 478559 the transaction block is divided depending on the belonging to a particular virtual currency. Programs that handle transactions with both old and newly formed branches, support the previous formats of the blocks, however, do not accept the new each other.
The owners of the funds denominated in Bitcoin, kept his money, however, in turn they received the equivalent amount of Bitcoin Cache, and the possibility of double spending. The original value of futures new currency was 0.5 BTC, but a few days has decreased in 5 times.