What is mining bitcoin cash

Personal Finance. We have gathered some of the best picks in the following table:. This makes ASIC mining equipment the best and most profitable way to mine Bitcoin Cash, as ASICs are capable of executing trillions of hashes per second, significantly outperforming other equipment, and leading to more profits for miners. Retrieved 21 August

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Traditional currencies—like the dollar or euro—are issued by central banks. The central bank can issue new units of money ay anytime based on what they think will improve what is mining bitcoin cash economy. The issuance rate is set in the code, so miners cannot cheat the system or create bitcoins out of thin air. They have to use their computing power to generate the new bitcoins. Because only a when a transaction has been included in a block is it officially embedded into Bitcoin’s blockchain. Distributed hash power spread among many different miners keeps Bitcoin secure and safe.

What is Bitcoin Cash?

Bitcoin cash is a cryptocurrency created in August , from a fork of Bitcoin. Bitcoin Cash increases the size of blocks , allowing more transactions to be processed. As proposed by Bitcoin inventor Satoshi Nakamoto , Bitcoin was meant to be a peer-to-peer cryptocurrency that was used for daily transactions. Over the years, as it gained mainstream traction and its price surged, Bitcoin became an investment vehicle instead of a currency. Its blockchain witnessed scalability issues because it could not handle the increased number of transactions. This was mainly due to the 1MB block size limitation for bitcoin.

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In this guide, we are going to be telling you about all the incidents that have led up to the creation of Bitcoin Cash. This is purely for educational purposes. If you want to buy Bitcoin Cash quickly and easily with your credit card check out the Blockgeeks Exchange!

Bitcoin Cash BCH is a cryptocurrency that was created on August 1,when a section of the Bitcoin community decided to fork away from the main protocol. Bitcoin has been riddled with a bunch scalability issues and according to these community members, the problem could be solved by just increasing the block size.

After a long stand-off, they finally decided to create their own cryptocurrency with a block size that had an upper limit of 8 MB as opposed to the original what is mining bitcoin cash MB.

According to them, the increased block-size will allow for more transactions to be processed. We are not going to be telling you which side is right and which side is wrong, that is totally up to you. What bitcoin provided was a peer-to-peer decentralized, digital currency. All the miners use their computing power to look for new blocks to add to the blockchain. When a group of miners discover and mine a new a new block, they become temporary dictators of that block.

In order to add these transactions to the blocksthe miners can charge a fee. For a transaction to be valid, it must be added to a block in the chain. However, this is when a problem arises, a block in the chain has a size limit of 1 mb and there are only so many transactions that can go at.

This was manageable before, but then something happened which made this a huge problem, bitcoin became famous! Yes, bitcoin became popular and with that came its own series of problems.

In this graph you can see the number of transactions happening per month:. As you can see, the number of monthly transactions is only increasing and with the current 1mb block size limit, bitcoin can only handle 4. When bitcoin was first created, the developers put the 1mb size limit by design because they wanted to cut down on the spam transactions which may clog up the entire bitcoin network.

However, as the number of transactions increased by leaps and bounds, the rate at which the blocks filled up were increasing as. More often than not, people actually had to wait till new blocks were created so that their transactions would go. This created a backlog of transactions, in fact the only way to get your transactions prioritized is to pay a high enough transaction fee to attract and incentivize the miners to prioritize your transactions. Basically, this is how it works.

Suppose Alice is sending 5 bitcoins to Bob, but the transaction is not going through because of a backlog. However, she can do another transaction of 5 bitcoins with Bob but this time with transaction fees which are high enough to incentivize the miners. As the miners put her transaction in the block, it will also overwrite the previous transaction and make it null and void. In fact, here is a graph of the waiting time that a user will have to go through if they paid the minimum possible transaction fees:.

If you pay the lowest possible transaction fees, then you will have to wait for a median time of 13 mins for your transaction to go. To repair this inconvenience, it was suggested that the block size should be increased from 1mb to 2mb. As simple as that suggestion sounds, it is not that easy to implement, and this has given rise to numerous debates and conflicts with team 1mb and team 2mb ready to go at each other with pitchforks.

As already mentioned, we want to take a neutral stance in this whole debate and we would like to present the arguments made by both sides. A fork is a condition whereby the state of the blockchain diverges into chains where a part of the network has a different perspective on the history of transactions than a different part of the network.

That is basically what a fork is, it is a divergence in the perspective of the state of the blockchain. Whenever a chain needs to be updated there are two ways of doing that: a soft fork or a hard fork.

Think of soft fork as an update in the software which is backwards compatible. What does that mean? Suppose you are running MS Excel in your laptop and you want to open a spreadsheet built in MS Excelyou can still open it because MS Excel is backwards compatible. BUT, having said that there is a difference. The primary difference between a soft fork and hard fork is that it is not backwards compatible.

Once it is utilized there is absolutely no going back whatsoever. If you do not join the upgraded version of the blockchain then you do not get access to any of the new updates or interact with users of the new system whatsoever. Think Playstation 3 and Playstation 4. Andreas Antonopoulos describes the difference between hard and soft fork like this: If a vegetarian restaurant would choose to add pork to their menu it would be considered to be a hard fork.

However, for any major changes to happen in bitcoin, the system needs to come to a consensus. So, how does a decentralized economy come to an agreement upon anything? Right now the two biggest ways that is achieved are:.

Before we go on any further, we need to understand what Segwit is. And along with the block header there is the body, and the body is full of transactions details. So, what does a bitcoin transaction consist of? Any transaction consists of 3 elements:. The digital signature is extremely important because it is what verifies whether the sender actually has the required amount of funds needed to get the transaction done or not.

As you can see in the diagram above, it is part of the input data. Now, while this is all very important data there is a big big problem with it. It takes up way too much space. Space that already is in limited availability thanks to the 1 mb block size.

Peter Wuille has come up with a solution for this, he calls it Segregated Witness aka Segwit. So what this will do is that it will create more space in the blocks for more transactions. When the developers built SegWit they added a special clause to it.

After all, it is a huge change in the system and they figured that getting a super majority was the way to go. However, this caused a disruption in the. They are afraid that since the available block space will increase, it will drastically reduce the transaction fees that they can. As a result, they stalled segwit which in turn infuriated the users and businesses who desperately want segwit to be activated. BIPs or Bitcoin Improvement Proposals is a design document which introduces various designs and improvements to the bitcoin network.

There are three kinds of BIPs:. The BIP is a user activated soft fork i. What it states is that all the full nodes in the bitcoin networks will reject any and all blocks that are being created without segwit ingrained in it. The idea is to motivate the miners to put segwit activation in the blocks that they mine for it to be part of the.

Have more than half of the miners to the other side will greatly reduce the hash rate of the legacy chain i. Going by the co-ordination game-theory, the miners will be compelled to come over to the other side with the majority. This however raised a serious concern. This could spell disaster and this is the exact issue raised by the mining company Bitmain.

The User Activated Hard Fork is a proposal by Bitmain which will enable the construction of a whole new form of bitcoin and blocks with larger sizes. Since this is a hard fork, the chain will not be backwards compatible with the rest of the bitcoin blockchain. The biggest reason why this looks so appealing is because the hard fork does not require a majority of hashpower to be enforced.

All nodes who accept these rule set changes will automatically follow this blockchain regardless of the support it gets. Bitmain visualizes this as a voluntary escape for everyone who is not interested in following up with the BIP proposal. It is fully decentralized, with no central bank and requires no trusted third parties to operate.

One of the best features of Bitcoin Cash is how it circumnavigates one of the biggest problems that any cryptocurrency can face post-forking, the replay attack. A replay attack is data transmission that is maliciously repeated or delayed. In the context of a blockchain, it is taking a transaction that happens in one blockchain and maliciously repeating it in another blockchain. So, how does bitcoin cash prevent replay attacks?

Any cryptocurrency depends heavily on its miners to run smoothly. Lately, bitcoin cash has attracted a lot of miners which has significantly improved its hash rate. Here is how they did. Bitcoin cash has a set rule as to when it decreases its difficulty. It is the median of the last 11 blocks that have been mined in a blockchain. Basically, line up the last 11 blocks one after another and the time at which the middle block is mined is the median time past of the set.

The MTP helps us determine the time at which future blocks can be mined as. Here is a chart of the MTP of various blocks:. This gives the miners some power to adjust difficulty, eg. The miners may have simply been doing this to make the blocks easier to. Another interesting thing to note is how and when the difficulty rate can adjust in a cryptocurrency.

This is a graph which tracks the difficulty rate of BCH:. The difficulty rate adjusts according to the amount of miners in the. If there are less miners, then the difficulty rate goes down because the overall hashing power of the system goes.

When bitcoin cash first started it was struggling a bit to get miners, as a result its difficulty dropped down drastically. This in turn attracted a lot of miners who found the opportunity to be very lucrative. This caused an exodus of miners from BTC so much so that the hashing power of BTC halved, decreasing the transaction time and increasing the fees.

Reports on social media stated that BTC transaction were taking hours and even days to complete.

What is Bitcoin Cash? — A Beginner’s Guide

What is Bitcoin Cash?

Mining software image via Shutterstock This article has been updated for clarity. Categories : establishments Bitcoin Bitcoin clients Cryptocurrencies Digital currencies. Which miners are used to mine Bitcoin Cash? Cloud mining whqt another way of obtaining Bitcoin Cash, without the need for buying hardware and configuring it. List of bitcoin companies List of bitcoin organizations List of people in blockchain technology. It depends on i ASIC hardware you chose. If you see accepted ccash and actual hash rate, congratulations — you are mining now! According to stats site Coin. The Telegraph. Just like Bitcoin, a block of transactions is confirmed by the Bitcoin Cash mining community what is mining bitcoin cash 10 minutes. Should you decide to jump down the rabbit hole and start mining, you can calculate your potential profits with the help of our Bitcoin Cash mining calculator. Dec 6,