Everyone has turned skeptical on how to scale the bitcoin cryptocurrency since the chances of a “hard fork” have arisen within the market.
Bitcoin seems to be in a crisis and everyone in their community is suffering along with it.
Stakeholders and developers stuck in a heated argument over “hard fork”
What is the issue?
Basically, Bitcoin is so well-known that it isn’t able to handle the weight of all the transactions. Transactions are processed in “blocks” that include complicated cryptography to verify and set. But, with the currency growing exponentially and the number of transactions increasing, the 1MB size limit of the block that is built into the system is becoming an issue, causing delays in processing transactions. Thus, purchases would take a long time to confirm.
The time taken for a virtual currency bitcoin transaction has been gradually increasing. The median currently sits at 13 minutes.
What are the alternatives?
The split is leading to two possible solutions: “Bitcoin Unlimited” and “Segregated Witness”. They obviously can’t exist together, they’re software updates to the bitcoin network that would change how it works. This “hard fork” would split the chain of transactions in two, producing another chain splitting from the original one.
BU vs SegWit
Starting off with Bitcoin Unlimited, you must understand the concept of bitcoin mining. Miners sift through and verify transactions using computers in order to get rewarded with newly issued bitcoins. Professional miners with computers having specialized hardware do the majority of the mining by performing mathematical tasks.
Miners are in favor of BU because it would give them control over the Bitcoin network.They would be able to increase the block size when required and effectively give them control to set the transaction fees.
On the other hand, to keep the cryptocurrency more decentralized rather than giving additional work to miners, bitcoin developers, and enthusiasts are in favor of SegWit.
SegWit would double the transactions per second capacity of bitcoin by juggling the makeup of transactions, stripping out some details such as signatures. It would also add some extra functionality, including possibly moving some transactions off-chain in a way that might not benefit the miners. This solution would keep control over the network dispersed (decentralized).
Although, SegWit is just a temporary solution. It only doubles the network’s bandwidth, while BU allows miners to vote to increase the capacity when required with no upper limit.
Who’s the winner?
It is possible that bitcoin value will fork and then the two opposing currency will co-exist and compete for users and legitimacy. It is up to the users to choose sides and it isn’t simple to predict the future of the BTC world.
What does this mean for the value of bitcoin?
Bitcoin is hitting high records currently and if the fork conflict’s solved in a timely and satisfactory manner, it would make the market even more powerful.