Everything You Need To Know About The Bitcoin Fork

first_imgStay on target Cops Raid Suspected Pot House, Find Cryptomining Operation InsteadBitcoin Bomb Threat Scam Disrupts Businesses Across US, Canada Cryptocurrency is one of the most exciting developments in the world of finance in recent years, but it’s also a complete disaster that has led to innumerable scams and rip-offs. Funny how that works. The big daddy of them all, Bitcoin, just made a major decision that could change the way it works in the future and reshape the whole landscape of distributed money. Let’s dive deep into the Bitcoin fork and why it’s important.First, a little background. Bitcoin was invented by a programmer (or team of such) who went by the name of Satoshi Nakamura. The real identity of the creators has been in dispute for some time, with several individuals taking credit and then being exposed as fakers. It was first released in 2009 and over the last few years has become the industry leader in cryptocurrency.Unlike traditional currencies, which are backed primarily by governments or physical exchange, cryptocurrencies have no innate value. They’re considered valuable because people ascribe value to them. It’s basically a huge trust exercise. What makes them interesting is that they can be both secure and anonymous. When Bitcoin is exchanged, it’s done through something called a blockchain – a distributed database that can be securely read and written to by multiple users. The blockchain update is timestamped and linked to all previous updates, meaning you can’t forge a past transaction without altering all subsequent blocks.Because control of the system is decentralized, it prevents manipulation of the currency’s value by the powerful. That’s definitely a good thing, but Bitcoin and other cryptocurrencies have also found themselves the victim of a bunch of scams and hustles. In 2014, Bitcoin exchange Mt. Gox – a site where people traded real currency for Bitcoins – collapsed, robbing users of $460 million after being hacked. While that was happening, the value of the currency dropped 36%.The process of updating the blockchain is done by “miners,” individuals who dedicate the processing resources of their computers to the task in exchange for Bitcoin, which are added to the miner’s wallet and thus the economy. In 2010, about four hours of time for a single Intel G4 processor was required to generate a single coin. Now it takes one of the most advanced dedicated mining rigs on the market about a month to make one bitcoin.The issue here is that the Bitcoin blockchain was just getting too big. The time it’s taking to process transactions gets longer and longer with each new addition, and if you’re hoping to make your crypto currency a general public thing, it can’t take hours to buy a cup of coffee. For larger, less frequent transactions it’s not a big deal, but the infrastructure hasn’t scaled with the volume, and something has to give.Over the past few weeks, the maintainers of Bitcoin have been deliberating about what to do. One group wants to stay the course and essentially make Bitcoin only usable for high-value transactions, while another is in favor of splitting the currency’s value into multiple “forks” and handling the growth through different processes. The argument was contentious, and it came down to a deadline last night, where the second group emerged victorious.Bitcoin has now split into two products: Bitcoin and Bitcoin Cash. Bitcoin will continue as normal, but Bitcoin Cash will increase the size of blocks in the chain to 8MB, compared to 1MB for traditional bitcoin. This new block size should theoretically make the processing of smaller transactions faster and more financially feasible while leaving mainline Bitcoin intact for larger transactions.Unfortunately, several major exchanges such as Coinbase have already announced that they won’t support the split and leaving Bitcoin Cash out in the cold. Right now it’s up to the miners – if they find they can generate new blocks profitably, the cryptocurrency will thrive. If not, we’re in for a lot of volatility. That’s something that crypto fans are unfortunately all too familiar with. The price of bitcoin has already started to drop following the announcement.If you’re not already invested in cryptocurrency, this won’t have much of an impact on your life. But if you’ve considered investing in Bitcoin – or a competing currency like Etherium – you’re coming into a market that’s as unpredictable as it’s ever been. Before you invest hard currency into Bitcoin or Bitcoin Cash, consider if you can afford to lose that money and proceed with caution.We want nothing but the best for Bitcoin or whatever cryptocurrency manages to make the model work. But today’s split is a great illustration that the technology still has a long way to go before it replaces the old-fashioned dollar.Let us know what you like about Geek by taking our survey.last_img read more