What is Bitcoin Mining? Bitcoins are a peer-to-peer technology to manage funds and transfer funds on a cryptographic protocol without the authority of central banks or businesses, similar to a transaction via PayPal. These transactions are recorded into a huge database known as the blockchain’ that is created by a proof-of-work system called “mining”.
Of late, there have been a few controversies with the Bitcoin miners, as many argue that the Bitcoin Blockchain needs to be upgraded for the chance of more transactions, as the popularity of Bitcoin Mining has grown exponentially in the past few years.
China Miners’ Conference
Over the past weekend, nearly 250 people, most of whom are miners themselves, filled a conference hall in Chengdu to capacity for an event, which was organised by one of the most prominent miners, Bitmain. The China Miners’ Conference focused on how the software needed to change and adapt with the popularity and number of people that the Bitcoin network is currently catering to.
Why Does Bitcoin Need to Scale?
According to information and charts provided from Blockchain info, in the last two years Bitcoin transaction growth has been on an upwards trend and then hit a hard limit in the past few months. The reason for this hard limit? The blocks are full. There is a technical limitation on the sizes of blocks and the transaction limit to each block, and this needs to be expanded in order to make room for more economical growth. However this presents some issues regarding fees.
The higher the fee of the service, the more lucrative the blockchains are for the miners, however this makes the service much less popular, and there is no real reason that people have to, or need to use Bitcoin.
How would Bitcoin Scale?
Huang Shiliang, a popular Bitcoin writer, suggested that the current 1MB limit on transactions to each block should be raised to 2MB, 8MG, or completely removed in order to allow larger chains, larger blocks, and larger blockchains. Hypothetically, this would mean that a daily transaction fee could be raised to 59,000 BTC, which will most definitely earn you a much higher transaction rate.
The Reaction of Bitcoin Developers
Shiliang’s comments and ideas have been criticised by the Bitcoin Developers, who claimed he was “misguided” in his valuation of bitcoins, as they are determined through a consensus of participants rather than the size and scale of the blockchains. If miners wanted to switch between blockchains they would need the consent of both full nodes and consumers, and this creates a risk of more than one chain developing. If this happens, the currency would be massively devalued and everyone would loose money.
The concensus of the meeting was that there does in fact need to be some form of scaling in order to allow BTC transaction to grow with the number of consumers it is attracting. However, it remains to be seen on how these advancements will take place. Top
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