Hi everyone.
As you probably all know there has long been a division in the Bitcoin community as to how to keep it useful as a currency and not just as a store of value. There are currently high transaction fees that make microtransaction unfeasible.
There are (probably) many ideas how to solve this problem. Currently 2 ideas of how solve the problem stand out: Bitcoin Cash opted for a larger block sizes thus allowing more transactions per block, while Bitcoin core (Bitcoin) opted to wait for the lightning network.
Picture: from Wikipedia
Bitcoin Cash
Bitcoin Cash was forked from the original Bitcoin blockchain in the late summer of 2017, due to a dispute about how to handle the increased number of Bitcoin transactions. This is because the blocks of 1MB size in Bitcoin core got clogged with transactions, and the ensuing bidding war to get one’s own transactions done first led to rising fees per transaction. A solution to this was to simply increase the block size, allowing each to contain more transactions and thus end or at least decrease the fees dramatically. Bitcoin Cash currently has an 8MB block size (8 times that of Bitcoin). The reason Bitcoin core was against this, was the fear that the entire Bitcoin blockchain would become so big (with multiple increases in block size), that only few could store it, thus ending the decentralization. One argument against this was that the entire blockchain wouldn’t increase that much in size with each increase in block size.
Picture: from Wikipedia
Bitcoin core (with lightning)
The lightning network on the other hand, will take the transactions off of the blockchain almost entirely, by opening channels between networks, that can remain open and continually be used to make secure transactions. As a result, transactions would happen at normal internet speed (almost lightspeed) and the fewer updates to the blockchain resulting from the transactions taking place away from the blockchain would lessen the strain on the system and reduce the fees. This would finally make Bitcoin microtransactions viable.
My take?
Oh crap! Because of the (for me) many unknown variables this is quite a pickle. If pressed I’d say Bitcoin Cash clearly has the edge right now as a currency (with the massive caveat that it depends on how many places accept it as payment).
The lightning network holds a lot of promise, but I really have no idea as to when broad usage is realistic or what kind of time frame we’re talking about. However, if the lightning network lives up to its potential, I’d think it holds more potential in the long run.
What solution do you think will eventually win out?
Or do you think the solution lies at another cryptocurrency entirely?