The fourth largest digital currency by market cap has just undergone a major change as the newly-activated upgrade has taken place on May 15th. The so-called “hard fork” aims to improve the functionality of the Bitcoin Cash (BCH) network by making two notable changes: increasing the maximum block size from 8MB to 32MB and adding or reactivating several bitcoin operation codes.
BCH came into existence almost a year ago when it split from the original Bitcoin (BTC), following another hard fork. The reason behind it was the scalability problem, as the original Bitcoin code had a limit of 1MB per block or around only 3 transactions per second. While it was not difficult to raise the limit from a technical standpoint, Bitcoin aficionados started prolonged and heated discussions and still could not compromise.
The most eye-catching change of the current hard fork is the block size quadrupling, which BCH enthusiasts believe will increase its value and appeal to the general public. The average size of BCH transaction is approximately 200 bytes, which means that the 8 MB block could support 40,000 transactions on average every 10 minutes, for a total of 5,760,000 per day. In contrast, 1 MB blocks of BTC can each only support 5,000 transactions of the same size, for a total of 600,000 per day.
While this sounds impressive, it is actually not that spectacular, given the actual number of BCH current transactions. Currently, the number of BCH daily transactions usually hovers around 20,000 per day, which is a measly 0.4% of the total volume it can support. Actually, there are more daily transactions of Dogecoin, than of BCH. Therefore, the decision the further quadruple the total capacity seems curious to say the least. Samson Mow, one of the head officers at Blockstream, slyly summarized this upgrade with the following tweet:
— Samson Mow (@Excellion) May 8, 2018
The fork will also reinstall some pieces of the original Bitcoin code, including opcodes ‘OP_GROUP’ that could be used to create tokens on BCH network and ‘OP_RETURN’, which allows users to store additional data on the blockchain, thus possibly paving way for BCH smart contracts.
If successfully implemented, these functions would expand the scope and usability of BCH by a significant margin, similarly to Ethereum smart contracts and ERC20 tokens that helped to skyrocket ETH to a second-largest cryptocurrency. However, making it work not only on testnet but under real market conditions is a whole different matter.
After the hard fork of August 2017, BCH prides itself in being the original Bitcoin and the only one of no less than 8 Bitcoins currently circulating the crypto market that is following the vision of its creator Satoshi Nakamoto. Following the hard fork of yesterday, BCH was removed from several exchanges, including BL3P, the only Dutch exchange to be licensed by the central bank of the country.
Image Source: “Youtube”