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    Thread: The Rise And Fall Of Bitcoin, And Bitcoin Cash

    1. #1
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      Default The Rise And Fall Of Bitcoin, And Bitcoin Cash

      A Little Sort Of History If You May

      Bitcoin as the crypto-currency of the year, is a domineering crypto-currency, which was recently crashed that only manages to get back on top with it's price back just last December, which simply means bitcoin as top and leading crypto-currency is still quite profitable compared to it's few years ago. Yet bitcoin, hidden to many users, suffers some serious flaws, from volatility to it's core algorithms.

      Volatility Of Bitcoin

      Last November, Bitcoin broke the floor and went below the U.S.$6k limit, it also has broken the U.S.$5k and U.S.$4k lines. Inadvertently some speculations and some specialists trusted and hoped that that crypto-currency will reach U.S.$25K last December, but the market for bitcoin is currently considered "bearish" and slow.

      Here are some speculations why Bitcoin took it's dive, someone said because of it's massive obvious sell-offs, while others still speculated that Goldman Sachs abandoning plans to launch a crypto currency trading desk, some still pointed out that since majority if not all bitcoin investors are young adults, they want to cash in before college. Another theory is the fear of huge capital gain taxes, still others say it's because of the bitcoin cash split. To simply understand about the splits, one has to understand and know how bitcoin "upgrades".

      Bitcoin’s Evolution

      Unlike the normal, regular centralized sofware like for example Playstore that has a central place to automatically upgrade and we could tell it's because of Google's doing that is centralized to the obvious upgrade of Playstore, most gadgets will just automatically download the upgrades from a centralized system set up by Google.

      But decentralization added to the difficulty of bitcoin upgrade since bitcoin because of it's decentralized protocols and decetralized software relies heavily on several thousands of nodes, each of them having a version of that bitcoin software piece installed. This process is called "forking" where a new version of software is created and installed on all thousands of nodes. For this simple reason, all nodes containing the piece of software of bitcoin must agree on the best way to go forward.

      Out Comes Bitcoin Cash

      And if the so-called "forking" resulted in incompatibility issues, with the old one, this will result in a new coin, thus what happened to bitcoin cash.

      Not to mention that bitcoin cash was a fork from bitcoin itself, the main reason for this hard forking issues is because of bitcoin's limited algorithms. For example of bitcoin's limitation, Visa can do 24,000 transactions per second to serve it's credit card users, while bitcoin can only do 7 transactions per second. Due to the quick bitcoin adoption, and it's increasing, the scability issues has to be resolved.

      Bitcoin uses a CPU-intensive “Proof of Work” algorithm which requires the miners to spend a lot of time and resources on computing a hash value that verifies the transactions. In return, the one who solves the algorithm is rewarded in bitcoin.

      Solutions Found

      To increase the chances for reward, GPU mining, ASIC mining and mining pools were created, with Bitmain currently being the largest. But the increased hashing power of these pools (with a majority of them residing in China) also increased the worries of a 51% attack, where one pool could overwrite the entire history of bitcoin and redefine the contents in all wallets.

      To solve the problem of scalability, the community had to make a choice. The problem could be solved by increasing the “block size” (limited to 1 MB) which would allow a lot more transactions to be processed per second, but this meant that smaller and slower devices would have no way or chance to compete with the bigger shark players. It was an issue of centralization vs. decentralization. The community could not agree, and bitcoin cash was born as the alternative which could process more transactions per second.

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