Bitcoin Cash Series | Why was Bitcoin Cash created?

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The number of bitcoin transactions has been constantly increasing since its creation in 2009. Since 2017, the Bitcoin network has nevertheless had difficulty processing these transactions and finds itself regularly congested. During transaction peaks, it often takes several hours for a transaction to be confirmed or else pays high transaction fees to speed up the process. In December 2017, at the height of the last speculative bubble in cryptocurrencies, the median fees amounted to more than 30 dollars per Bitcoin transaction.

Why these slowness? By design, the blocks in the Bitcoin blockchain are limited in size to 1 MB. A block is mined every 10 minutes on average: if we neglect the impact of SegWit, this represents a transactional capacity of 7 transactions per second and that is generally not sufficient to meet the growing demand for use.

One of the solutions to this problem is to increase this limit value, as Satoshi Nakamoto predicted in 2010. However, over time, this change lost its approval in the community, because it led for some to a dangerous centralization of the network. A debate over scalability raged for years until it led to the irreversible separation between Bitcoin and Bitcoin Cash in 2017, which was really sealed by the cancellation of SegWit2X in November 2017.

The Bitcoin community is divided into 2 camps:

On the one hand, the proponents of Bitcoin (BTC) wishing to maintain a reduced block size, judging that an increase in this limit would centralize the network: for them, Bitcoin must operate on a commercially available computer with an Internet connection of base, so that everyone can have a complete node if they wish. Instead of increasing the block size limit, they prefer protocol optimization solutions like SegWit which would increase the number of transactions managed by the blockchain by around 70%, or second layer solutions like the network. Lightning or side chains.

On the other hand, supporters of Bitcoin Cash (BCH) wanting activity on the chain to develop naturally, advocating a gradual increase in the block size limit and judge that the transactional capacity provided by SegWit is not sufficient and that second layer solutions pose more problems than they solve. They think that all users should not have to maintain a complete node, this task should be carried out mainly by miners and by big traders. So that the network remains sufficiently decentralized despite the increase in load, they count on an optimization of the propagation of the blocks as well as on Moore's law, which stipulates that the computing power increases exponentially and that their cost decreases in the same proportion. Before Bitcoin Cash, this part of the community had made several attempts to increase the block size limit (through Bitcoin XT, Bitcoin Classic, and Bitcoin Unlimited clients), but without success.

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