In this beginner’s guide, I will tell you about Bitcoin Cash and all the incidents that have led up to the creation of this cryptocurrency. Was created in 2009 by Satoshi Nakamoto and is without a doubt one of the most incredible innovations in the recent past. However, as use of the network has increased, the Bitcoin blockchain has started running into scaling issues. The main reason for these issues is the limited number of transactions that can fit into each 1 MB Bitcoin block.

More How Much Processing Power To Mine Bitcoin Cash BCH videos. Why Bitcoin Cash Will Be MUCH Faster than Bitcoin after SegWit Activation. The Bitcoin Cash mining difficulty. Than mining BCH with the same hash power.

This has given rise to a lot of debates which are politically as well as ideologically motivated. Finally, Bitcoin went through a hard fork on August 1, 2017, which gave birth to Bitcoin Cash. In this guide, I am not going to be telling you which side is right and which side is wrong, I will leave it to you to decide. How Do Bitcoin Transactions Work? Bitcoin was introduced by an anonymous person or group with the assumed name Satoshi Nakamoto in their, now legendary, research paper “Bitcoin: A Peer-to-Peer Electronic Cash System”. What Bitcoin provided was a peer-to-peer decentralized, digital currency system, which did for money what email did for written communication. The entire system of Bitcoin functions due to the work was done by a group of people called “miners” who perform complex computations that lead to the creation of new links in the Bitcoin Blockchain using computer hardware. For their work, miners are rewarded with a new Bitcoin token.

So what exactly do these miners do? Here are the two most important activities that they do: • Mine for new blocks. • Add transactions to the blocks. Mining for new blocks All miners use their energy/electricity and computer power to look for new blocks to add to. The process follows the “” (PoW) protocol. Once a new block has been discovered, the miners responsible for the discovery get a reward, currently set at 12.5 Bitcoins (it is halved after every 210,000 blocks). However, this isn’t the only incentive that the miners have. Adding transactions to the blocks When a miner or a group of miners discover and mine a new block, they become temporary dictators of that block.

HTMLCOIN HTML Mining Rental. Suppose Ann has to send 5 Bitcoins to John. However, she isn’t physically sending him any money, and the miners have to actually add this transaction to the blocks in the chain and only then is this transaction deemed complete.

The miners can charge a fee. Also, you can give the miners a higher fee if you want your transaction to be added quickly to these blocks. A transaction must be added to a block in the chain in order to be valid. However, this is when a problem arises. A block in the chain has a size limit of 1 MB and the Bitcoin blockchain can only handle 4.4 transactions per second compared to a peak of. This was manageable before. However, something happened that made this a huge problem – Bitcoin became famous!

The Bitcoin Scalability Problem became extremely popular and with that popularity came its own series of issues. Check this graph below to see the number of transactions happening per month: Image source: Wikipedia As you can see, the number of monthly transactions is only increasing and Bitcoin can only handle 4.4 transactions per second with the current 1MB block size limit. When Bitcoin was first created in January 2009, the developers put the 1MB size limit by design. The reason for that was that they wanted to cut down on the spam transactions which may clog up the entire Bitcoin network. However, as the number of transactions surged, the rate at which the blocks filled up were increasing as well. The network could not process as many transactions per second as was demanded.

As a result, the transaction processing time rose from a couple of minutes, to hours and – in the most drastic scenario – days. 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 incentivise miners to add your transactions into the next available block. As of December 2017, if you decide not to pay the fees, your transaction takes on average a to get confirmed. This introduced a feature called replace-by-fee (RBF), which allows for low-fee transactions to be rebroadcasted and include a higher fee.

This is how it works. Nexus NXS Miner Mac Download. Suppose Ann is sending 5 Bitcoins to John, but because of a backlog, the transaction is not going through. As you already know, Bitcoins once spent can never come back so she can’t “delete” the transaction.

But she can do another transaction of 5 Bitcoins with John. However, this time she will do it with transaction fees that are high enough to incentivize the miners. As the miners put Ann’s transaction in the block, it will also overwrite the previous transaction. In the end, this will make the previous transaction null and void.

As you can see, the “replace-by-fee” system is profitable for the miners. However, it is pretty inconvenient for users who may not be that well to do. In fact, here is a graph of the waiting time that a user who pays the minimum possible transaction fees will have to go through: Image courtesy: Business Insider People who pay the lowest possible transaction fees will have to wait for a median time of 13 minutes for their transactions to go through. In order to repair this inconvenience, it was suggested that the block size should be increased from 1MB to 2MB, which would allow more transactions to fit into a block. As simple as this suggestion sounds, it is not that easy to implement. This has given rise to many debates and conflicts with team 1MB and team 2MB ready to go at each other with pitchforks.

As already mentioned, I would like to present the arguments made by both sides and I want to take a neutral stance in this whole debate. Here are some of the arguments against block size increase: • Transaction fees will decrease so miners will lose incentive – Since the block sizes will increase, transactions will be easily inserted. This will significantly lower the transaction fees. Some people also fear that this may disincentivize the miners and they may eventually move on to greener pastures.

Decreasing the number of miners will also decrease the overall hashrate of Bitcoin. • This may split community – A block size increase will inevitably cause a fork in the system. This will make two parallel Bitcoins and hence split the community in the process, which may eventually destroy the harmony in the community. • Bitcoins shouldn’t be used for regular everyday transactions – Some members of the community feel that Bitcoins have a higher purpose than just being regular everyday currency and they don’t want Bitcoin to be used for everyday purposes. • This will cause increased centralization – The network size will increase, which means that the amount of processing power required to mine will also increase. This will take out all the small mining pools and give mining powers exclusively to the large scale pools, which will in turn increase centralization.

The problem is that centralization goes against the very essence of Bitcoins. Here are some of the arguments for the block size increase: • Bitcoin needs to grow more and to be more accessible for the “ordinary man” – There is a very real possibility that the transactions fees will go higher and higher if the block size doesn’t change. When that happens, Bitcoin will be used exclusively only by the rich and big corporations and the ordinary man will never be able to use it.

As you already know, that has never been the purpose of Bitcoin. • The block size increase works to the miner’s benefit – Increased block size will mean increase transactions per block. This will, in turn, increase a number of transaction fees that a miner may make from mining a block. • The changes will gradually happen over time, they won’t happen all at once – When it comes to the block size change, the biggest fear that people have is that too many things are going to be affected at the same time and that will cause major disruption. However, people who are “pro block size increase” think that that’s an unfounded fear because the changes won’t happen all at once, they will gradually happen over time. • There is a lot of support for block size increase already. This means that people who don’t get with the times may get left behind.

Two suggestions were made in order to solve the scalability issues: • • A hard fork. Let’s first understand the fundamental difference between a soft fork and a hard fork before we go into any of them. Not like the kind you would find on a table, on a blockchain, a fork is a change to the software of the digital currency that creates two separate versions of the blockchain with a shared history. What Is A Soft Fork? There are two ways of updating a chain – a soft fork or a hard fork. Think of soft fork as an updated version of the protocol which is backward compatible with previous versions. What does this mean?

Suppose you want to open a spreadsheet built in MS Excel 2015 but you are running MS Excel 2005 in your laptop. However, you can still open it because MS Excel 2015 is backwards compatible. BUT, there is a difference. All the updates that are available to you in the newer version won’t be visible to you in the older version. Going back to our MS excel analogy again. Suppose there is a feature that allows to put in GIFs in the spreadsheet in the 2015 version, you won’t see those GIFs in the 2005 version. This basically means that you will see all text but you won’t see the GIFs.

What Is A Hard Fork? A hard fork is not backward compatible and that is the primary difference between a hard fork and a soft fork. Once it is utilized there is no going back. You don’t get access to any of the new updates and you can’t interact with users of the new system if you don’t join the upgraded version of the blockchain. Suppose you have PlayStation 3 and PlayStation 4. There is no backwards compatibility for games, which means that you can’t play PS3 games on PS4 console and you can’t play PS4 games on PS3 console.

Image courtesy: Blockgeeks.com However, the system needs to come to a consensus for any major changes to happen in Bitcoin. So, how can a decentralized economy reach an agreement on anything? The two biggest ways that are currently achieved are: • User Activated – Basically, changes which are voted on by people with active nodes. • Miner Activated – Changes which are voted on by miners. We first need to understand what Segwit is before we go on any further. What Is Segwit?

We won’t go very deep into what segwit is. However, it is important to have an idea of what segwit is in order to get why Bitcoin Cash came about. Just to reiterate what we have mentioned before, we are not going to be telling you which side is right and which side is wrong, that is totally up to you. This is what a block looks like when you closely examine it. Before deciding to create a new currency, the people behind Bitcoin Cash appealed to the original Bitcoin community for an increase in block size and they cited greater accessibility and room to grow for the burgeoning Bitcoin user base.

However, there were many opposed to the increase, including miners who would miss the fees for transactions. This lead to a decrease in overall mining on the blockchain and, as a result, lowered security. The two teams did reach a small compromise in the form of and, upgrades targeted at reducing the amount of information needed inside the block. However, the argument over increased block size dragged on for and ultimately the two teams decided to part ways in the form of a hard fork on the Bitcoin network. Bitcoin Cash (BCH) is a lot like Bitcoin and they are technically almost identical. However, Bitcoin Cash has some very noticeable differences: • The blocksize is 8 MB, which will allow many more transactions to be processed in one block.

• It does not support the implementation of SegWit. • Bitcoin Cash does not have the “replace by fee” feature. • It has an emergency difficulty adjustment algorithm (EDA). • Bitcoin Cash will have replay and wipeout protection.

• Bitcoin Cash also offers a way to adjust the proof-of-work (PoW) difficulty faster than the normal 2016 block difficulty adjustment interval found in Bitcoin. Also, from an ideological perspective we can say that the key differences between Bitcoin Cash and Bitcoin are that: • Bitcoin Cash acts as electronic cash. It enables fast, cost-effective and direct payments between two parties over the Internet. • Bitcoin, on the other hand, is now being viewed rather as store of value. It is perfect for those who don’t want to use it for simple everyday transactions that require speedy settlement.

BCH is a result of a hardfork, which means that anyone who possessed BTC got the equal amount of coins in BCH PROVIDED they were in possession of their private keys and didn’t have their BTC in exchanges at the time of the hardfork. How Does Bitcoin Cash (BCH) Prevent Replay Attacks?

One of the most important features of Bitcoin Cash is how it circumnavigates the replay attack, which is one of the biggest problems that any can face post-forking. What Is a Replay Attack? A replay attack is a form of network attack in which an attacker detects a data transmission and fraudulently has it 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, for example Ann is sending 5 BTC to John, and under a replay attack she will send him 5 BCH as well, even though she never meant to do that. So, how can Bitcoin Cash prevent replay attacks? • By using a redefined sighash algorithm – The sighash algorithm is used to find both duplicate blocks and important blocks, and it is only used when the sighash flag has bit 6 set. The different sighashing algorithm will result in invalid transactions, which means that these transactions would be invalid on the non-UAHF chain.

• By using OP_RETURN output that has the string “Bitcoin: A P2P Electronic Cash System” as data – Any transaction that contains this string will be considered invalid by bitcoin cash nodes until the 530,000th block, which basically means that before that block you can split your coins by transacting on the non-UAHF chain first with the OP_RETURN output, and then transacting on the UAHF chain second. How Does Bitcoin Cash (BCH) Attract Miners? Just like other notable cryptos such as Ethereum and Litecoin, Bitcoin Cash depends heavily on its miners to run smoothly.

Bitcoin Cash has attracted many miners lately and this has significantly improved its hash rate. And here is how they did that.

Bitcoin Cash has a set rule as to when it decreases its difficulty, but before we see the rule it is important to understand what Median Time Past (MTP) is. MTP is the median of the last 11 blocks that have been mined in a blockchain and it helps us determine the time at which future blocks can be mined as well. Below, you can see a chart of the MTP of various blocks: Image courtesy: Jimmy Song Medium article. Here is the rule for difficulty adjustment in Bitcoin Cash: If the MTP of the current block and the MTP of 6 blocks before is greater than 12 hours, then the difficulty decreases by 20%. This means that it becomes 20% easier for miners to find newer blocks, which gives the miners some power to adjust difficulty, e.g. Checkout the 13-hour gap between blocks 478570 and 478571. The miners do this to make the blocks easier to mine.

One more important thing to note is when and how the difficulty rate can adjust in a cryptocurrency. Below, you can see a graph which tracks the difficulty rate of BCH. Image courtesy: Bitinfocharts.com The difficulty rate adjusts according to a number of miners in the system, so if there are fewer miners, then the difficulty rate goes down because the overall hashing power of the system goes down. When Bitcoin Cash first started, it was struggling a bit to get miners. As a result, its difficulty dropped down drastically, which in turn, attracted many miners. Some of these miners were idealists, dedicated to the idea of Bitcoin Cash’s scalability solution, while others were only interested in acquiring Bitcoin Cash as an investment vehicle, with prices expected to rise. This caused an exodus of miners from Bitcoin so much that the hashing power of Bitcoin halved, increasing the fees and decreasing the transaction time.

BTC transaction was taking hours and sometimes even days to complete. The graph below shows the drop in hash rate of BTC: Image courtesy: Investopedia The Value of Bitcoin Cash At the time of writing this article, BCH is the second most expensive cryptocurrency in the world behind BTC at $3,328 per BCH (its value once surged over $4,000) with a market cap of $39 billion. Check the graph below for more details: Image Courtesy: Coin Market Cap What Is the Driving Force Behind the Value of Bitcoin Cash (BCH)? Reason #1: Due to an increase in value and consumer demand, more and more exchanges are agreeing to take up Bitcoin Cash.

When it first started many of the most prominent exchanges were hesitant to support Bitcoin Cash, but now more and more exchanges are accepting it. This gives it credibility, which, in turn, increases its value. The following are the exchanges and wallets that support BCH: Image courtesy: Coinsutra Reason #2: More and more miners migrate from mining Bitcoin to Bitcoin Cash. As explained above, Bitcoin Cash is currently very lucrative for miners. That’s the reason why many of them are coming in and giving their hashing power which in turn increases its value. At the same time, by increasing block size from Bitcoin’s 1MB up to 8MB, Bitcoin Cash allows many more transactions to be processed in one block, which will generate more transaction fees for the miners.

What Is the Future of Bitcoin Cash (BCH)? Predicting or commenting on the future of Bitcoin Cash is impossible because we are not fortune tellers who can look into a crystal ball and predict what is going to happen in the future. The future of Bitcoin Cash remains unclear and we have no idea how Bitcoin Cash is going to turn out in the future nor do we know the long term repercussions that it will have on Bitcoin.

What we do know is that this is a very interesting experiment that will teach us a lot of lessons moving forward. This is the first time that anyone has successfully hardforked from Bitcoin whilst keeping the records of the existing transactions.

At the same time, the 8MB block size is definitely a very alluring aspect. However, it remains to be seen how this affects the miners in the long run.

Can Bitcoin Cash really address all the scalability problems? Can Bitcoin Cash overtake Bitcoin and become the primary chain? All these questions are mere speculations for now, and the only thing that we can say for sure is that we are experiencing some very exciting times in the cryptocurrency community.

Bitcoin Cash LIVE February 1st NEW Internal Conversion Tool Bitcoin Gold wallets are LIVE GPU Expansion Plan and Repurchases Ethereum Payments – Paid up to date New Mining Power Update BitClub moving to Bitcoin Cash starting February 1st As mentioned in our last update BitClub is moving exclusively to accept Bitcoin Cash (BCH) for all invoices starting February 1st. We are also moving all commission payments to BCH and will no longer be accepting Bitcoin Core (BTC) for any mining packages or other products. Before making this transition the current invoicing platform will go offline for about 12-24 hours. During this time you will not be able to pay for any new invoices (including pay it forward) until the new platform launches. Once the new platform goes live we will ONLY be accepting Bitcoin Cash, which means any Bitcoin (BTC) you send to a BCH address will be lost forever. This is very important so please remember not to do this! To make the process easier we have created our own internal conversion tool so that you can easily convert your BTC to BCH with no fees.

All you have to do is click on the new conversion link under your wallet page and decide how much you want to convert. This works both ways BTC –>BCH and also BCH –>BTC. IMPORTANT NOTE: You can still deposit Bitcoin (BTC) into your BitClub Credit Wallet by using the Deposit tab under your wallet page. This will allow you to send any amount of BTC into your BitClub Credit Wallet and then convert the BTC to BCH and pay for mining packages or any other invoices. New Internal Conversion Tool We have built a very robust backend conversion tool that will allow you to swap your tokens from one to another based on the current market rate at the time.

Right now we are only going live with the BTC/BCH pair but we will soon offer more tokens for you to convert. This feature will allow you to take advantage of your own balances to get whatever tokens you would like to hold or withdrawal. For example if you are mining Monero and Ethereum Classic you don’t have to set up external wallets in order to withdrawal, instead, you could just convert them internally to Ethereum (ETH) or BCH, or whatever you wanted and then make a single withdrawal to your wallet. We are really excited about this new feature however, we also want to be very clear that we are not becoming an exchange.

This is not intended for any trading or high volume swaps. In fact there will be strict limits on how you can use this and if you are found to be abusing this feature we will disable it from your account without warning.

Also, important to know that we are not charging any fees for this service, it’s purely for your convenience and to help you maximize liquidity in whatever token you desire to hold. Bitcoin Gold Wallets Bitcoin Gold wallets will go live right after the new invoice platform goes live with Bitcoin Cash. You will be able to add your BTG withdrawal address and request your funds just like all of the other tokens we currently support.

We are planning to add the option to mine Bitcoin Gold using your GPU shares within the next 30-60 days, so if you want to start accumulating more BTG you will have the option to do this very soon with our mining pool. GPU Expansion Plan and Repurchases Starting February 2nd we will be adding partial share repurchases to all of our GPU mining contracts. All new shares purchased will default to a 30% repurchase rate and you can change this to go higher or lower from 0% up to 100% just like our Bitcoin mining contracts. The repurchases work based on whatever coin you are mining and this will pay commissions to your upline in that same token when you make a purchase. For example, if you are mining Monero and you set repurchases at 50% then each day 50% of your daily earnings will be held for a future repurchase. The repurchase will happen on the 1st day of each month no matter what your balance is you will see a repurchase happen for whatever token you mined during the month. So let’s say you had 5 shares of the GPU pool and you had 1 share of each set at 50% (ETH, ETC, XMR, ZEC, and soon to be BTG).

At the end of the month whatever balance you have in your held commissions will be used to purchase a partial share for each token. These repurchases would all create upline commissions that would be paid in each token that is used. This is different from BTC repurchases and we think its even better. We are not relying on a certain amount before doing a repurchase, instead, we are doing 1 partial share repurchase per month for each token no matter the balance in the wallet. Doing this will force repurchases each month and we believe this will be a great way to accumulate all of the tokens each month.

Just imagine knowing that each month you will earn a commission on whatever your team members are mining and repurchasing through the same compensation structure you have already built. When you combine this repurchase model with our new swap feature it means you can convert your tokens into other tokens for free and have full control over your crypto portfolio. This could be very lucrative for those members with large teams who are doing repurchases and we believe it makes GPU pools even more attractive than BTC pools.

*A Big Change to GPU Contracts Based on the current market conditions and our new repurchase model we are dropping the total amount of days in the mining contracts from 2,000 down to 1,000 starting on February 2nd. This only applies to new shares purchased after February 2nd and for all partial repurchases made. Also, we are excited to announce a massive expansion in our GPU mining operation. We’ve been purchasing a lot of GPU rigs over the last 90 days in anticipation for the increased demand in the market and also the increase demand from our members with the new repurchase model. Currently we have purchased over 14,000,000 MHs with about 5,000,000 MH still waiting to be deployed between now and the end of March.

Our team is deploying rapidly in multiple locations and we have built up a very strong supply chain that will allow us to add a lot more power as we grow. Ethereum Payments – PAID!

We had some major issues with our Ethereum payment scripts and we apologize for the delay in sending out withdrawal requests. As of today this has now been completed and by the end of the day we will be 100% caught up. This new system comes with an audit model for checking correct payments and it will allow us to diagnose any issues with the gas limits and any other issues that may trigger a partial payment instead of a full payment. Due to the backlog please give us 48 hours to be sure you received your Ethereum withdrawal.

If after 48 hours you are not seeing anything please open a support ticket or respond to an existing ticket if you already have one open. We have been working to improve our withdrawal scripts for all tokens and soon we will have every withdrawal for every coin paid within 12-24 hours after being requested. Thanks for your patience while we get this upgraded! New Bitcoin Mining Update There have been some delays in getting our latest rounds of power. Mainly because of the Chinese new year and some other supply chain issues that have been causing unexpected delays. The good news is we should see the total power nearly double to around 800 PH within the next 7 days and we have a lot more power being added in February. To date we have already paid for 2,037 PH in total and we are placing another order at the end of this month for even more.

Unfortunately, with the current market conditions anything we buy today has a target deployment date of around May. This is due to the huge demand and even with our connections with Bitmain and Bitfury it’s just a crazy market right now and all we can do is keep buying more and adding power when it becomes available. We should see all of this power hit our pool between now and April, which will give each share a nice boost! Overall, it’s a very exciting time to be a member of BitClub Network because not only do we continue to expand our Bitcoin mining and GPU mining operations but we are also expanding our corporate team and we are currently doing a complete re-brand of our website, videos, content, and all landing pages. You will begin to see a lot of these new changes going live in February and there is much more you haven’t heard about yet that we plan to announce in the coming months.

It’s going to be an incredible year and we are dedicated to helping you build a crypto empire! Thanks for being a member of BitClub Network! Sincerely, -BCN Support Team.