Bitcoin Cash Wallet

Bitcoin Cash Wallet

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Bitcoin Cash is a peer-to-peer electronic cash system. It's a permissionless, decentralized cryptocurrency that requires no trusted third parties and no central bank.

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What Is Bitcoin Cash?

Its history is also the history of Bitcoin, because, until August 1, 2017, they were the same cryptocurrency: Bitcoin Cash is the first fork of Bitcoin. This means that the original code of the first blockchain and its transactions were cloned to some extent-specifically, up to block number 478,558. Since that time a new blockchain with different rules was created, and a new digital currency apart from (and not in place of) Bitcoin.

The main offer of Bitcoin Cash is written in its name (cash): to be a much faster payment method than the original Bitcoin. In order to fulfill this goal, the developers decided to make a significant increase in the size of the original network blocks, from 1 MB to 8 MB and from there to the current 32 MB.

In order to understand why exactly this was the choice and why new crypto had to be created instead of implementing the same measure in Bitcoin, we must review the background that led to this result.

Bitcoin History

Satoshi Nakamoto built the first blockchain with 1 MB of capacity per block, which would allow only about 7 transactions per second. From the beginning, it was known that this would be a rather temporary capacity, as more people used the network in these conditions, the speed would decrease and fees would skyrocket. And that's exactly what happened.

In 2016, the scalability (growth) problems in Bitcoin became more and more noticeable. The adoption of the currency began to multiply, resulting in a significant slowdown in the network. During one of the busiest weeks in its history, there were tens of thousands of transactions pending confirmation. This gave rise to the so-called "commission market": many users had to pay a higher amount of commission to the miners, in order to see their transaction confirmed as soon as possible. If they decided to pay the lower amount, the transaction could be put on hold for days. One thing was more than clear: Bitcoin had to scale up, its capabilities had to be improved as soon as possible in order to continue operating with a larger number of users. The whole community agreed on this, but soon it was divided up.

Is BTC The Same As Bitcoin Cash?

Two groups emerged in 2017 with the same objective, but with different proposals to achieve it: those who wanted to increase the size of the blocks and those who preferred a different alternative, which would improve their operation without increasing their size.

In the first group were the supporters of Bitcoin Unlimited, the organization that maintains Bitcoin client of the same name, led by the entrepreneur Roger Ver. His proposal was to perform a hardfork to remove the limit on the size of the blocks: this would be adjusted according to the needs of the network.

The second group was led by the developers of Bitcoin Core, Bitcoin's main client. The solution they presented was Segregated Witness (SegWit), a method through which transaction signatures were relocated within the block, optimizing space and allowing a capacity of up to 2 MB. To activate it, only a softfork would be needed, less drastic than a hardfork because it maintains compatibility with previous versions of Bitcoin clients. However, in order to carry out either option, it was necessary to reach a consensus in the community, made up of the nodes and the miners. The controversy then began.

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Bitcoin Cash Fork Blocks Explanation

The developers of Bitcoin Core maintained their position, mainly due to two factors: the flexible blocks proposed by Unlimited had not been sufficiently tested, so implementing the proposal would not be very safe for the network, and increasing the size of Bitcoin blocks would lead to greater centralization since more sophisticated equipment would be needed to support them. In that way, a few companies could come to control the cryptocurrency.

For their part, Unlimited also stood firm, claiming that SegWit would only be a temporary solution and not a permanent one. Everything pointed to a hardfork that would divide the network, the miners, and Bitcoin nodes, creating an additional cryptocurrency with which price, community, and credit would be shared, as happened with Ethereum.

To avoid that scenario, about 58 companies in the ecosystem, including such big names as Blockchain, Bitmain, Coinbase, and Circle, reached a new agreement in May 2017: to activate SegWit, but followed by a hardfork that would increase the block size to 2 MB. This proposal was SegWit2x and, in the end, would not happen.

Bitcoin Cash Development

In July, perhaps suspicious of the outcome, a group of investors and entrepreneurs, mostly Asian and led by the exchange house and mining group ViaBTC (with Bitmain being the largest investor in that company), decided to carry out an independent hardfork to Bitcoin community to create a new cryptocurrency based on the same code, but which would have the substantial differences that the Core team was not allowed.

The first implementation of this protocol, called Bitcoin ABC (for Adjustable Blocksize Cap), was presented by its lead developer, Amaury "Daedal Nix" Séchet, during the "Future of Bitcoin" conference held in Arnhem, the Netherlands, in early July.

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Accusations Of Centralization

Not all cryptocurrencies are decentralized and, although it is an ideal feature, it is not mandatory either: each user can decide what he likes or suits him best. However, the aim of Bitcoin is to eliminate all intermediaries and allow person-to-person transactions in a secure way, without anyone being able to completely control the network, and therefore modify it or set rules to the detriment of the users. Bitcoin Cash, considered by some to be the "true" continuation of that ideal, should certainly be decentralized.

Despite all this, Bitcoin Cash, along with its supporters and developers, has been repeatedly accused of centralization on the web, which means that, contrary to what is stated on its website, a few groups and projects may be controlling it. This was the main reason the developers of Bitcoin Core refused to increase the size of the blocks: since they needed more advanced equipment to mine, this task would fall to only the most resourceful miners. Mostly companies.

Among the most serious accusations is that of the Bitpico group of developers, who have been conducting stress tests on both Bitcoin and Bitcoin Cash. According to their findings in July 2018, up to 98 percent of the nodes associated with this network were physically very close to each other, and 49 percent of them were operating within the facilities of the Chinese conglomerate Alibaba. This could allow the entity owning these nodes to attack the network. Although these results were controversial, it has also been theorized that Alibaba has a certain partnership with Bitmain, a company strongly related to Bitcoin Cash.

Other accusations include that of cryptographer Nick Sabo, who has been suspected of being the creator of Bitcoin, and who went so far as to call Bitcoin Cash network "a centralized puppet.

The future vision of Bitcoin Cash as a cryptocurrency, according to Bitcoin ABC group of developers, is to be massified around the globe, with almost immediate and free transactions, and, additionally, to have its own economy of tokens created within the same blockchain; something very similar to what is offered by Ethereum.

To achieve this, they have planned a series of updates that would be given every 6 months, in each of which they would include new features such as adjustable blocks of up to 1 TB, fractional satoshis, improvements in the commissions, a pre-consensus function, the activation of operation codes (opcodes) to allow more advanced qualities and a new transaction format.

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