All About Bitcoin And Bitcoin Cash; Bitcoin is a worldwide payment system, like a currency we used, but the difference in bitcoin and a real currency is bitcoin is a digital currency which is not accepted by government and not accepted in many places, the system works without any central bank. Find latest Apps tips and tricks here on GeekyGoom.
Bitcoin is said to be invented by Satoshi Nakamoto or unknown group of people but the identity of these people remains unknown. Bitcoin is released in 2009 as a reward for a process called mining.
The process of finding new blocks to add to the blockchain by the miners is known as mining. It is used to keep the record continuously through use of some software.
Miners are the normal people who used there computer processing power to find new blocks and add the transaction, sent by someone to someone, to the blocks in the chain. Minors continuously verifying and collecting newly broadcast transaction into blocks and keep the blockchain consistent and complete.
Block and Blockchain
A block is a storage unit in which data belongs to a bitcoin saved, every transaction regarding the bitcoin is saved in it. At the start, a block has a size limit of 1 MB but now the size is increased to 8 MB. Each block link to the previous block by a cryptographic hash contains in it of the previous one and so giving the blockchain its name.
A blockchain is a continuous linking of the new block to the previous one that records the bitcoin transaction, simply a public ledger which records the transaction of bitcoin.
Transaction and transaction fees
Consider a transaction between A and B. A send some bitcoins to B, this transaction consist some input and some output. Output simply consist amount of bitcoin have to send to B and address designated of B by A Input consist a digital signature, it is too important because it verifies that the sender has the required amount of fund needed to get the transaction done, and a cryptographic hash to link it to previous blocks and other details. Any input money(digital one)which is not accounted for in the transaction output become the fee for the minors who find these blocks and link it to the previous ones, these fees are said the transaction fees and it is optional. But minors prefer those transactions to process that pays higher fees.
But a problem occurs since the block size is limited to one Mb so only so many transactions that can go at once, the only 5-7 transaction can go per second. so the people have to wait for the new blocks to be created which creates many problems.
To solve the problem the block size has to increase, Dr. Peter Wuille has come up with an idea for this, he proposed Segregated Witness or Segwit.
According to the idea, once Segwit is activated, signature separated from the other details and transferred it into a new block called the ” Extended block”. The signature is one which transferred because it takes the most of the space (about 60 percent). This will create more space in blocks, the block size increases to 1.8 MB, so more transaction occurs. But it creates a fork in the system, what if someone does not use the new update and use the block with 1 MB.This problem is also solved in Segwit, the person who wants to use the one MB block gets only input and output without any digital signature and other can get the whole data with signature. This still split the system its a type of Soft Fork, in which the older version can use the data of new version but not every application of new version it is called backward compatible.
The new system Segwit increases a number of transaction that a block can take, it reduces the size of the individual transaction and decreases transaction fees, transaction now be confirmed faster. But the developers decided to activated Segwit only when it has 95 percent approval from miners since it is a huge change in the system. However, most miners do not want Segwit to be activated. they are afraid of reduction of transaction fees that they can get. As a result, Segwit stalled. To Motivate the miners to put Segwit activation, in the blocks that they mine, the full nodes in the network reject any and all blocks that are being created without Segwit ingrained in it. This is the soft fork that has been activated by users which are called BIP 148.
But what if minors more than 50 percent minors do not start using Segwit then the chain will split, this issue is raised by the mining company Bitmain. And proposed a UHAF ( User Activated Hard Fork) if BIP 148 do not get success.
UHAF and Bitcoin Cash
UAHF is proposed by Bitmain. It constructs a whole new form of Bitcoin and the blocks with larger in size. This is a type of hard fork which means chain will not be backward compatible with rest of blockchain.
If someone does not like the BIP 148 proposal then they leave it and can be a part of this new chain. At the conference of “future of bitcoin” the upcoming hard fork is announced and the project “Bitcoin Cash(BCC)” was announced that came into effect on August 1, 2017.
Bitcoin cash is a lot like bitcoin but the block size is increased to 8 MB and does not have Segwit. The change in bitcoin block size limit of 1 MB to 8 MB is classified as a Hard Fork. Since it is a result of the Hard Fork, so anyone who has bitcoin got an equal amount of coin in bitcoin cash provided that they did not have their bitcoin in exchanges and were in control of their private keys at the time of Hard Fork.
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