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Why the Bitcoin Network Just Split In Half and Why It Matters (arstechnica.com)
In a report via Ars Technica, Timothy B. Lee explains why the Bitcoin network split into two and why it matters: On Tuesday, a faction of the Bitcoin community launched an audacious experiment: a new version of Bitcoin called Bitcoin Cash that's incompatible with the standard version. As a result, the Bitcoin network split into two mutually incompatible networks that will operate side-by-side. The confusing result is that if you owned one bitcoin before the split you own two bitcoins now: one coin on the original Bitcoin network, and a second coin on the new Bitcoin Cash network. The two coins have the same cryptographic credentials, but they have very different values if you sell them for old-fashioned dollars. On Wednesday morning, one standard Bitcoin was worth about $2,700, while -- on paper at least -- a unit of Bitcoin Cash was worth around $600. [...]
For over a year, the Bitcoin network has been bumping up against a capacity limit hard-coded into the Bitcoin software. Each block in the Bitcoin blockchain -- the network's public, shared transaction ledger -- is limited to 1 megabyte. That artificial limit prevents the network from processing more than about seven transactions per second. Technically speaking, it would be trivial to change that 1 megabyte limit to a higher value. But proposals to do so have faced opposition from traditionalists who argue the limit is actually an important feature of Bitcoin's design that protects the network's democratic character. To participate in the network's peer-to-peer process for clearing transactions, a computer needs a copy of every transaction ever made on the Bitcoin network, which adds up to gigabytes of data per month. This argument has dragged on for more than two years with no resolution. So instead of continuing to bicker, a group of big-block supporters took matters into their own hands. They forked the standard, open-source Bitcoin client to create a rival version of the software.
For over a year, the Bitcoin network has been bumping up against a capacity limit hard-coded into the Bitcoin software. Each block in the Bitcoin blockchain -- the network's public, shared transaction ledger -- is limited to 1 megabyte. That artificial limit prevents the network from processing more than about seven transactions per second. Technically speaking, it would be trivial to change that 1 megabyte limit to a higher value. But proposals to do so have faced opposition from traditionalists who argue the limit is actually an important feature of Bitcoin's design that protects the network's democratic character. To participate in the network's peer-to-peer process for clearing transactions, a computer needs a copy of every transaction ever made on the Bitcoin network, which adds up to gigabytes of data per month. This argument has dragged on for more than two years with no resolution. So instead of continuing to bicker, a group of big-block supporters took matters into their own hands. They forked the standard, open-source Bitcoin client to create a rival version of the software.
core bitcoin is also 'soft-forking' to get bigger block sizes a the same time.
This will in the next few hours / days activate a software update giving the official bitcoin chain bigger block sizes.
To see the activation status see: http://segwit.co/
Bitcoin cash does have some interesting ideas but i'd probably stick with bitcoin as they finally have gotten thair act together and implemented a solution to the problem.
Most on the mining power for 'Bitcoin Cash' aka 'BCash' was applied as a joke; they have less than 7% of the hashing power of BTC; and could be easily taken over with a 51% attack on mining.
https://bitsonline.com/hong-ko...
it's not split in half, it's split off a sliver.
Disclosure, I own one quarter of one Bitcoin/BCash.
There's an extra wrinkle: it's downright trivial to make your own new 'coin'(at least if it's a close clone of one of the existing ones; making more significant architectural changes would obviously be a bigger job). There are even handy web interfaces that will make them for you; just plug in your parameters and go.
However, creating a new variant doesn't affect the scarcity of the existing variant: there are more 'coins' in circulation overall; but 'coins' from one fork can always be distinguished from those of the other; so the scarcity of Fork X 'coins' remains the same; but now there are Fork Y 'coins' as well.
The really scarce resource is interest: as noted, having your own pet 'coin' and blockchain is extremely trivial; but also likely to be worthless because you can't pass it off as being the 'real thing'; and nobody else cares about it. This incident is somewhat notable not in that it's the creation of yet another cryptocurrency variant(which happens all the time); but that there was enough discontent with the existing arrangement that the fork has actually attracted some attention and isn't completely worthless.
So the main feature is that the block size is 8x the size of BTC's. So now instead of the entire network being able to only handle 7 transactions/second it can handle only 56? SWIFT handles ~350 transactions/second on a good day, for comparison. Furthermore, the entire blockchain at this point is currently ~126GB. That's enough to fill up most mobile devices by itself. So with 8x the block size, the blockchain will soon be in the terabytes? Storage isn't getting larger/cheaper at that rate any more. Sounds like someone needs to fix the "you need the entire history of the world's financial transactions" problem next.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
If you're like me, you do, but rejected the correct answer because it seemed so silly.
It's explained reasonably well by analogy with the Parable of the Ox Explained here on the BBC's excellent "More Or Less" radio programme/podcast, but if you prefer to read here's the author's post.
Your numbers are a little out of date. Visa last year alone averaged 4500 transactions a second.