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Bitcoin Cash Hard Fork Addresses Bottlenecks around Block Size Limits and Enables Smart-Contract Scripting

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It was another hard fork day on May 15! Bitcoin Cash is creating a new blockchain with 32MB block size limits and added smart-contract functionality. This is the third hard fork that the Bitcoin Cash community has undergone in under a year, and declares their undeterred commitment to change whatever necessary to grow their blockchain’s transaction abilities. Bitcoin Cash strives to provide an inexpensive and fast medium of exchange for everyday payments.

A ‘hard’ fork refers to software changes that require the creation of a new blockchain from a previous one, whereas ‘soft’ forks can impute software updates without the creation of a new blockchain. A hard fork, therefore, is only implemented when there need to be changes made at the most fundamental level of the blockchain architecture; the consensus protocol layer.

A Bit of Background on Bitcoin Cash

Bitcoin Cash was born out of a hard fork with Bitcoin’s blockchain last summer. After much debate amongst various parties of the Bitcoin ecosystem over how to scale the Bitcoin network, a group of developers organized under the name ABC Bitcoin, wrote the code for a hard fork to create a new blockchain with 8MB block limits. On August 1, this new code was implemented to copy the entire Bitcoin block history onto a new network to begin mining its own transactions separately, as a distinct currency and under different mining parameters. Bitcoin Cash promises to be a peer to peer cash system. This system should be popular in areas where the traditional financial system has been unable to reach the unbanked.

In the case of last summer’s hard fork, not only was a new blockchain created, but also a new coin was introduced to the market to represent value exchanged on this new transaction ledger. However, not all hard forks create new coins. For example, Bitcoin Cash hard forked again last November to fix their algorithm adjusting mining difficulty because the network was producing wildly fluctuating hash rates.

To patch the system, various developer teams running different clients on the Bitcoin Cash blockchain agreed to implement a hard fork where they all copied the old ledger onto a new chain, with the software updated, and abandoned the old chain. Although technically November was also a ‘hard’ fork, it was obviously very different than the previous split in community generating not only a new blockchain, but also a new network, and a new coin.

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