Genie released from the bottle / SurprizingFacts

Source: Thomson Reuters

On July 14, SurprizingFacts published quite extensive material assessing the development of Bitcoin infrastructure. Then it was said that since August 1, the crypto currency can be divided into two branches that will evolve independently or almost independently of each other. One of the problems that led to the separation was the increase in the time for confirmation of the transaction in the bitcoin network.

Prior to the separation, the block size was 1 megabyte, and the transaction processing speed was no more than 7 units per second, while in the Visa network This speed is much higher – tens of thousands of units of transactions per second. In general, as expected, August 1 division took place. There was a new crypto currency, which was called Bitcoin Cash.

Why did the division take place

Around mid-July, the developers agreed on the need to update the bitcoin protocol using SegWit2x technology (Segregated Witness). This is the solution suggested by the Bitcoin Core development team, it was supported by the largest mining pools from China. The new technology has allowed to remove from the block a certain amount of information, including transaction signatures, while increasing the bandwidth of the entire chain.

Most of the miners agreed to update the protocol, which promised an increase in the performance of the entire network. But some of the large companies that are engaged in mining, supported the division. Most supporters of this position – from China, we can say that the Chinese miners and caused the appearance of the Bitcoin fork (by the way, not everyone agrees that this is exactly the fork). But, in general, this is really so. So, on August 1, the light appeared Bitcoin Cash with a block size of 8 MB. The division occurred on block number 478558. Accordingly, both versions of bitcoin have common old transactions, but all new operations are different. The block size of the new currency is 8 MB. Interestingly, the first to conduct operations with this crypto currency was also the Chinese.

"A group of miners who did not like the option using SegWit2x decided to increase the size of the crypto currency unit from 1 MB to 8 MB," commented Charles Morris, representative The investment company NextBlock Global.

Catastrophe or not?

No, except for the "redistribution of spheres" of influence and changes in some of the principles of infrastructure operation in the world of crypto currency, nothing has happened. In principle, the separation was expected for a long time, and they were preparing for it. Here already the words "who did not hide, I'm not guilty of fair to the full. Not in vain prior to the separation of users of the network, Bitcoin was asked not to accept or send payments on July 31 and August 1. No one knew exactly what could happen – perhaps, when sending a certain amount of money, she simply would not have reached the addressee, or had reached, but then disappeared right from her purse.

Before the separation, the bitcoin rate reached $ 2,900, although then it fell slightly. The volatility of the crypto currency was very high, the rate of both units remains not very stable, and so far. The same Bitcoin Cash initially cost $ 300, then its rate rose to $ 700 and again fell, though not to its original position, but to about $ 500.

At the time of August 2, Bitcoin Cash climbed to third place among the crypto currency. At the first and now is bitcoin (original), on the second – Ethereum.

The course of bitcoin before separation. Source: Bloomberg

"The bitcoin rate rose before dividing on the expectation of receiving additional profits by the holders of the crypto currency," says one market participant. "This has already happened before in other lock-ups. This is a usual market phenomenon when you Expect some extra money. "

Some exchanges before Bitcoin's cleavage, mindful of the problem described above, ceased to perform operations with crypto-currency, including freezing to accept and issue deposits, but quickly resumed all operations (lit On the day after the separation, as already mentioned, some of the Chinese exchanges immediately began operations with a new crypto currency. Cash is supported by companies such as OKCoin, Huobi, BTCCPool, Bitmain, F2Pool, BTC.Top, ViaBTC, BiXin, BW , 1Hash, Canoe, BATPool, Bitkan, etc. On the other hand, there are as many as those who decided not to work with Bitcoin Cash until the situation stabilizes, including the Coinbase exchange – a fairly large player in the crypto currency market.

"On the eve of the division on August 1, we say that we will support only one version. We do not intend to work with forkkoin fork, "said the head of Coinbase.

It should be noted that after the separation of bitcoin, all the owners of classical crypto currency became the owners of Bitcoin Cash. And since there were 16.48 million bitcoins in circulation, the amount of new crypto currency became similar. According to Kathy Wood, representative of ARK Investment Management, the new and old crypto-currencies will get their destiny in the world of blockade, nobody will be left behind.

By the way, after the division a new software client was also introduced, which was named Bitcoin ABC. Some nodes will be updated, and use it, while others will remain "in their own". Each node will decide what to do, update or not, independently.

What's next?

Specialists on crypto currency believe that in the future the original bitcoin will develop faster than fork. This will mean that the "big brother" for a long time will be a more attractive object for investors than Bitcoin Cash. But if a sufficient number of miners and stock exchanges pay attention to the new crypto currency, then its development will also be rapid. Miners, before all other market participants, will determine the future of the new Bitcoin.

In addition, those who trade in virtual coins make their contribution to the development of new crypto currency. So, some Bitocin users buy Bitcoin Cash massively, in the hope of increasing the rate and earning potential, and not bad.

The number of market participants that support Bitcoin Cash is growing. So, if immediately after the division the new crypto currency was supported by 3% of the miners, now they are already about 10% or even more.

Nevertheless, at the moment, not just dozens and not hundreds, but units of large pools are engaged in the mining of the new cryptonet. There are three in total. Two are ViaBTC, plus ViaBTC. But the third one is still unknown. The share of the third pool accounts for more than 77% of the total network hash.

According to data published by representatives of Bitcoin.com, representatives of the MC Pool company from Hong Kong are undergoing a new crypto currency. They themselves say that they do it more for the sake of entertainment than for profit. In addition, the pool itself is located in the building of the Kwong Wah Mansion in Hong Kong.

Next to this building is a new shopping center owned by MC Pool, so the company is mined Bitcoin Cash Also for the sake of advertising. A few days after working with Bitcoin fork, MC Pool management stated that it is not profitable to mine this crypto currency, because the complexity of the network is the same, but the reward is less. "The fee here does not correspond to the complexity of mining," said the owner of MC Pool. He also added that he completely admits that the fork will exist without any problems, gradually developing. "Yes, something similar has already happened to other crypto-currencies. They are quite able to coexist, "he said.

As far as can be judged, it is here that the lion's share of Bitcoin Cash is extracted

Accordingly, the miners are more profitable To extract the original bitcoin, which, moreover, is trusted by the majority of companies that work with the blockbuster. This is one of the problems that stand in the way of the development of Bitcoin Cash, and it is quite serious.

As far as we can judge, in the near future Bitcoin Cash will be weaker than the main crypto currency, but still there is nothing threatening the existence of an alternative. If the miners support Cash, then everything will be fine. And the same company MC Pool, despite the management's statement about the termination of the news of the news, apparently continues to carry out this work, and is clearly not for the sake of advertising, since all operations are conducted without publicity.

However, the genie has indeed already been released from the bottle, there is no turning back.

About the author


Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *