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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.
Wow. Someone's bitter they missed out on a making a lot of money.
Actually, it does not matter. Bitcoin Cash is redundant. They may be correct as to the technical merits of why a change is needed regarding maximum block size but their fork is unnecessary. Ordinary Bitcoin may adopt a larger block size or some other remedy at any time in the future. The argument is only over whether something needs to be done today. Well that and internal developer politics.
Regular Bitcoin is not locked into some doomed course. They can make a block size change on the timeframe they think appropriate; or if Bitcoin Cash does enjoy increasing popularity they can make the change to put an end to the defections to the other side. Either way Bitcoin Cash seems doomed. Although I'm sure some speculators will find a way to make money off the hype.
Some people, like the owner of this address https://bitinfocharts.com/bitc... got $43million richer overnight, if they could cash out all of their bitcoin cash holdings right now.
FTFY
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.
Its my understanding that bitcoin is not a fiat currency there is no proclamation from anyone with authority claiming its value, as well its not a currency backed by a commodity or good, so controlling the scarcity seems to be an incredibly important factor.
If I understand it correctly, previously the rate was limited to a linear function of time, but now this appears to be very broken as it can be doubled at any time?
And lastly I haven't even looked to see how the market for the currency has been affected but I would assume that it has to decrease as people come to understand the total amount of currency can be doubled or more at any time?
Except, for the moment, there is nowhere to cash them out.
Now both projects are exactly half as relevant to their purpose. Good job guys.
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.
Let's add it.
What I read was that that block limit is a hack and could be and should be done away with, that the effect of hitting the limit has been to drive up transactions costs. The cost of a transaction should be some microscopic fraction of a cent, but now it's 5.50 USD.
The people who are raking in the money are the huge (and I hate to say it) Chinese mining pools. And *these* people, I read, are launching DDOS attacks on anyone trying to increase the block size.
Finally, I've also read the guy in the charge of the source base is a complete no-hoper, which is why there's finally been a fork - people are trying to get BitCoin out of the pit it's fallen into.
And as soon as they attempted to, the value of them would plummet.
If they were to "cash out" all their bitcoin holdings the price would plummet before selling even more than 1000 btc. Try to cash out and see what happens in a market with no volume.
Seven puppies were harmed during the making of this post.
The enduring contribution of Bitcoin appears to be the blockchain idea, which is being tested in a number of applications the Bitcoin developers never envisioned:
http://www.huffingtonpost.com/...
These would enable such things as personal identity to be managed without a central authority.
The BTC split subjects Bitcoin users to an involuntary A/B test of a change to the original blockchain that could support faster transaction processing. Let's see whether the winner is A, B, or none of the above.
Over $400million in volume yesterday. Not exactly "no volume".
Seems like the people on the exchanges got their BCC/BCH and the price actually went up.
Transaction volume within a currency isn't the same thing as transfer in/out volume. Bajillions of dollars worth of transactions are conducted in USD every day. If suddenly everyone who had USD tried to sell it for some other currency, the price of USD would plummet.
The fact that lots of transactions fly back & forth within BTC doesn't mean you'd find the equivalent in value of people willing to give you fiat currency for your BTC. The guy with $43mill? That's over 10% of the daily volume. Try to shift 10% of a currency's daily volume into sales to another currency. You're in Zimbabwe territory at that point.
It was the first but that doesn't mean it should stay on top. There is no value to it other than what we give it in our minds. There is no reason to stay with it as it does have problems. Both groups should stop using the name "bitcoin". There is room and a need for multiple digital currencies.
Bitcoin is simply not good for consumer transactions. If you can wait 15 minutes to an hour to complete transactions like stock purchases use to take in 1901 then it's viable. If I am dealing in large amounts of money then I prefer bitcoin and can wait.
For more information, see FlappyCoin and MoonCoin.
#DeleteFacebook
When you consider Bitcoin to be a similar value proposition to a stock market, then you understand Bitcoin value better.
And the fork is a unique event, probably causing more trouble than it solves. But value? If Bill Gates liquidated his Microsoft shares, would he impact the price, and therefore his value? Yup. Bitcoin holders are sort of trapped in their market.
deleting the extra space after periods so i can stay relevant, yeah.
If I understand correctly, the owner of a pre-fork bitcoin can now sell it twice, on standard bitcoin and on bitcoin cash.
That is not a huge problem, except for platforms that pretend to handle both bitcoins. I assume they will need to consider them as two distinct currencies.