July 25, 2024

Essential Crypto Selling and Buying Choices for You

Each cryptocurrency has a protocol, some rules of operation inherent in its blockchain. The continuation of the blockchain, that is, the production of successive blocks requires the consensus of the complete nodes. An entire node stores the entire blockchain and just archives the new blocks miner-generated that are consistent with the determined protocol specifications of a blockchain. Ask the Bitcoin Dealers and they will show you the right way.

Simplified Payment Verification

Not all wallets (the software that allows you to access the blockchain and “store” your cryptocurrencies) need to be complete nodes; they can simply guarantee that your transfers are in a block by connecting to multiple nodes that accept the same protocol, without having to store all the blockchain. Currently the Bitcoin Blockchain weighs about 185GB. This way, other nodes confirm your transactions. The popular Electrum wallet, like most wallets, uses this system called SPV (“Simplified Payment Verification”). The Bitcoin consensus works in such a way that if 51% of the complete nodes take something for granted, it is true, that is, if 51% of the blocks accept a protocol, this protocol is considered valid in this blockchain.

Soft fork & hard fork

When there is a protocol update, it must be accepted by most complete nodes. A soft fork supposes an update of the protocol that the node community accepts and is implemented as the new protocol of that same blockchain. In the case of the soft fork, the nodes that have not implemented the update can continue using the blockchain but without benefiting from the update, however the mined blocks from that moment on must update their mining software so that their blocks are accepted. It is a soft fork that implements a code improvement to reduce the weight of transactions in blocks so that each block can validate more transactions.

A hard fork, on the other hand, generates a new blockchain, where the old protocol is not valid. In case a hard fork occurs, the blockchain branches off, giving rise to two blockchain, two protocols and therefore two currencies. This is the case of Bitcoin Cash, a hard fork that was produced on August 1, 2017 by the community that did not agree and created this fork that expanded the block size from 1MB to 8MB. It should be noted that when a hard fork occurs you do not lose your coins, they are replicated in the new blockchain, so that with your keys you will have the same units in the new blockchain as in the original one at the time of the fork.

Bitcoin Cash in a nutshell

Along with Bitcoin Unlimited, Bitcoin Classic and Bitcoin XT, it is one of the alternatives to the Bitcoin cryptocurrency. Supported by a few platforms including Bitfinex, Bitcoin Cash was born out of a divergence that took place within the Bitcoin community. BCH supporters believe that BTC should allow everyone to conduct day-to-day transactions. This means that the network must be able to support more transactions, hence the need to increase the size of the blocks.

Differences between BTC and BCH

The fundamental difference between Bitcoin and Bitcoin Cash is in the size of the block. While Bitcoin currently has a block size of 2 MB, Bitcoin Cash is currently 32 MB after a hard fork on May 15 that increased it from 8 MB. The reason for this difference lies in the scalability of the cryptocurrency; those who operate with Bitcoin when its price was skyrocketing will surely remember the high commissions. These work so that miners include the highest commission transactions first.