What are SegWit and Bitcoin Cash?Both SegWit and Bitcoin Cash are solutions to the infamous Bitcoin scaling problem, but the way they go about this differs substantially. Because the Bitcoin network has a maximum block size of 1MB, only a limited number of transactions can fit onto the next block and hence be confirmed. At this rate, the Bitcoin network was capable of handling around 7 transactions per second. Segregated Witness (SegWit) is a soft fork introduced in August 2017 that changed the format of bitcoin transactions, allowing more transactions to fit within each 1MB block while also opening the door to further scaling solutions — such as the lightning network. The limited throughput of the Bitcoin network saw it almost crippled in December 2017 when network load significantly spiked, causing the average transaction fee to spike as high as $55 due to transaction competition. The average Bitcoin transaction fee has drastically declined in tandem with SegWit adoption, to the point where it is currently a non-issue. Unlike SegWit, Bitcoin Cash is the result of a hard fork. The altcoin split off from the main Bitcoin chain on August 01, 2017. Bitcoin Cash attempts to address the Bitcoin scaling problem in a different way. Developers opted to increase the block size from 1MB up to 8MB, giving the Bitcoin Cash network much greater throughput than Bitcoin (BTC). Rather than being agreed on by a majority consensus of Bitcoin’s mining network, Bitcoin Cash was instead created by a group of miners and Bitcoin developers that felt SegWit did not adequately address the scaling issue. Given equal hash rate, it is expected that the BCH network is capable of handling 4x as many transactions as Bitcoin SegWit. Currently, the average BCH transaction fee sits at 15 cents, more than 2.5x lower than the average SegWit transaction. What is your opinion on Bitcoin Cash and SegWit? Which one do you think is best prepared for scaling and second layer solutions? Let us know in the comments!
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