So, What is Bitcoin Mining? Well, 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.
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 organized 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.
According to information and charts provided from Blockchain info, in the last two years, Bitcoin transaction growth has been on an upward 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 economic growth. However, this presents some issues regarding fees.
The higher the fee of the service, the more lucrative the blockchains are for the miner. However, this makes the service much less popular, and there is no real reason that people have to. Also, some need to use Bitcoin.
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. Ultimately, this will most definitely earn you a much higher transaction rate.
Indeed, Shiliang’s comments and ideas are interesting. However, many people and Bitcoin developers criticize them. Furthermore, experts say “he misguides” in his valuation of bitcoin. Also, 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. Additionally, this creates a risk of more than one chain developing. If this happens, it can devalue the currency. As a result, everyone would lose money.
The consensus 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.