Taylor Johnson
Jul 27, 2017 · 2 min read

The Bitcoin community has developed two factions over how to fix the current scalability issues.

Bitcoin Scalability Issues

As the hype behind Bitcoin has grown, so have the transactions being processed on it’s network. The network is processing so many transactions that it is slowing down the processing time. This makes it more difficult and time consuming to transfer coins and confirm transactions went through the network.

The issues lie with the fact that the Bitcoin blockchain has a block size of 1 Megabyte (yeah, not so large). It is also programmed to process, on average, 1 block every 10 minutes. Developers and cryptocurrency enthusiasts have been debating for years on how to solve this issue and some changes will start to take shape August 1.

SegWit vs. Block Size Increase

The main Bitcoin community has rallied behind the SegWit proposal. This will keep the 1 Megabyte block size, but reduce the amount of data per transaction. SegWit will just about double transaction capacity.

However, some in the crypto community believe this proposed method is only a short term solution. A group has rallied behind the idea that the block size should increase to 8 Megabytes. This faction within the community has decided to call the new blockchain based currency Bitcoin Cash.

Effects of the Split

Bitcoin as we know it will continue moving forward and will most likely activate SegWit. Once SegWit activates, there will be some very short term instability in the market. Most exchanges will halt trading during this period until the changes hold.

Bitcoin Cash is setting to hard fork from the Bitcoin blockchain August 1. This will essentially spin off a new currency from the existing one. All transaction history and previous data will persist, however any future transactions of Bitcoin Cash will solely live on that specific blockchain.

Some of the community believe that this split will devalue Bitcoin. The real question that remains to be answered is will they get enough support from the miners to maintain the separate chain.

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