One of the main reasons why a miner decides to work a currency is short and medium term profitability and for now is what is happening with BitcoinCash. Let’s see a few technical details of this chain.
The Bitcoin Cash difficulty
Since August 1 of this year we have seen how Bitcoin chain called BitcoinCash that is maintaining the essence of Satoshi Nakamoto caused a great stir because of the size of the blocks and the number of miners who are migrating and supporting in large Measure to BCH, surprising to many by the great unexpected rise of price although to day of today already can be seen to the low and recovering the fourth market position by capitalization.
There are still many of the blocks that have not yet been extracted, but if they were extracted instantly, we would have 6 difficulty settings in blocks 478577 to 478582. This will reduce the difficulty 20% each so we will have blocks that are 0.8 ~ 0.262 of difficulty to mine. Thus the miners will have to work about 1/4 of the hash power to extract a new block
The big question now is whether the miner who devotes all his hash power makes it more profitable to mine BCH in the short term and get more coins for less processing time which now results in 20% easier than BTC and sell on rising days. If the hash power is increased, confidence in this currency will increase and so will continue to rise in price and more and more miners will find it more profitable to continue working with BCH.
Bitcoin Cash has a very particular rule about when the difficulty can be adjusted downwards and thus process the blocks more quickly, something very interesting.
I think that BitcoinCash is confirming blocks very quickly and this is exactly what it gains in confidence while BTC continues to suffer delays as a result of the abandonment of certain miners going to the chain of blocks possibly more profitable.
But what differentiates Bitcoin Cash from Bitcoin and how does it affect the community?
To maintain its independence and the anonymity of its users, Bitcoin has a complicated operation.
Each currency is a computer document that is stored in a kind of “virtual purse”.
Each transaction between wallets is registered in a list that is public.
But for all this to happen, you need a “mine-worker” who solves difficult mathematical problems.
Miners are volunteers who receive bitcoins as a reward each time they process a block of coins.
This new version is considered the basis for the next stage of growth of the crypto coin.
Bitcoin has become so popular that the 1MB limit every 10 minutes has made it necessary to wait hours and even days to complete a transaction or have to pay high fees to accelerate the transaction.
Evolve to cover the need
Bitcoin was the first to arrive and be known and as all technologies are updated and advanced should improve and here is the discussion if you should increase the size of the blocks to expedite all transactions are recorded in a registry of free access. That the miners are in charge of supervising these tasks and are the ones that perform the operations themselves, those that monitor the nodes and work 24 hours a day, seven days a week, to solve computer problems in return for a fee in Bitcoins can decide now with Bitcoin Cash if a capacity per block of 8MB is much better and faster retaining the original chain.
The problem with this technology is that it is slow. Like, especially compared to banks that deal with credit card transactions. Visa processes 150 million transactions per day, with an average of approximately 1,700 transactions per second. And its capacity far exceeds that, at 24,000 transactions per second.
How many transactions can the Bitcoin network process have per second? Seven. Transactions take about 10 minutes to process. And as the Bitcoin user network grows, waiting times will be longer because there are more transactions to process without a change in the underlying technology that processes them.
BitcoinCash hopes to solve this problem with its memory increased by blocking 8MB, so it needs more support from more miners to strengthen the network and streamline the transactions, it really is very interesting.
The main solutions to this problem are either to make smaller the amount of data that must be verified in each block, to make faster and cheaper transactions or to make the blocks of data bigger, so that more can be processed Information at the same time.
The difference between Bitcoin and Bitcoin Cash
By mid-July 2017, mining groups and companies representing approximately 80-90% of Bitcoin’s computing power voted to incorporate a technology known as a segregated witness, called SegWit. SegWit makes the amount of data that needs to be verified in each block smaller, eliminating the data of the signature of the data block that must be processed in each transaction and placing it in an extended block. It has been estimated that the data of the firms represent up to 65% of the data processed in each block, so this is not an insignificant technological change. They are talking about doubling the size of the blocks in November, also, from 1Mb to 2Mb, which can improve Bitcoin’s scalability. SegWit was expected to run later this month. That is the course of Bitcoin.
Bitcoin Cash is a different story. Bitcoin Cash was started by Bitcoin miners and developers alike worried about the future of crypto conversion, and its ability to scale effectively. However, these individuals had reservations about adopting segregated witness technology. They felt that SegWit did not address the fundamental problem of scalability in a meaningful way, nor did it follow the roadmap initially outlined by Satoshi Nakamoto, the anonymous party who developed the blocking chain technology behind the crypto coin. In addition, the introduction of SegWit as a way forward was somewhat less transparent, and it was feared that its introduction would undermine the decentralization and democratization of the currency.
BitcoinCash wants to remain totally decentralized, something very important in the ecosystem “crypto” and the base of Satoshi Nakamoto. If we were to leave Bitcoin centralized this would lead to the dominant model of the economy controlled by only a few, which no one at this point wants. Mind you this is what we need, decentralization always retaining security with strong mining processing.
Many other altcoins are working to see who is faster processing their transactions and which are much faster processing blocks of information. But like everything else, not always the fastest is better. As there is a variety of uses in different blockchain fields, we will still have to wait a bit for the miners to finish deciding or to continue alternating between BTC and BCH to determine the best work option.
The issue is serious since it raises several options and the strongest chain is the one that will win, giving options in turn to new HardFork.
While we wait for everything to happen, we can take advantage of and put our saved miners to work and get the performance out to our teams and dust off those we thought was already obsolete.
Long live our miners!