Will Bitcoin handle the Pressure from Ethereum, Bitcoin Cash and all these seemingly better AltCoins?
Jan 22, 2018 Posted / 7440 Views
Currently it has gotten so expensive to transact small amount of money in the Bitcoin blockchain because of the very high transaction fees charged. LocalBitcoin for example also charges for transactions entering your localBitcoin wallet. Transactions lower than $30 is almost impossible to execute via local bitcoin at the moment since transactions fees could cut as much as $22 meaning just $8 remains from the funds.
Transactions that take three days to confirm is very far from what bitcoin users expect from the bitcoin network. A number of projects are being initiated to try to solve the catastrophe that has befallen but the major question remains ‘How many times will bitcoin have forks and create new (altcoins). A consensus between the Bitcoin stakeholders remain the only best option to carefully revise the Bitcoin algorithm and allow far affordable and convenient usage of Bitcoin.
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Majority of Bitcoin users are now holding their hopes on the lightning network, proposed solution to the Bitcoin scalability problem which would use an off-chain protocol and is still under development to dae. The lightning network would use a P2P system that would enable it to make micropayments over a scale-free network of bidirectional payment channels. This new approach would handle all the tasks without delegating custody of funds or trust to third parties.
Lightning network protocol was develop after the segregated witness softfork on the bitcoin mainnet was activated. The lightning network protocols are currently being developed by several parties. The bitcoin community would vote for the most optimal software to be use as an update on the bitcoin blockchain when development and testing os complete from all the parties working on the lightning software.
Could Ethereum Be the Cryptocurrency to supercede Bitcoin
Ethereum is another interesting cryptocurrency which has gained a lot of fame majorly because of the problems that bitcoin uses faced. Ethereum charges far less transaction fees and takes just a short time for a transaction on the ethereum network to confirm.
The ethereum network has a lesser fee because it is less congested meaning it has more space available to store transaction records. It is possible that with increase in the number of daily transactions on the ethereum network more transactions fees would be required to be paid in order to process on-chain transactions on the ethereum network.
Compared to Bitcoin capacity limit that is permanently fixed, ethereum capacity limit called the Block Gas limit is scalable. Fees on the ethereum network is currently very low because there exist a significant gap between the Block Gas limit and the current transaction population. Sometimes ethereum fees occasionally increase due to increase transaction volume generated during Crowd-sales based on the ethereum network but would stabilize after those activities finishes.
However one of the few advantages of the ethereum Block Gas Limit to its Bitcoin counterpart is that it could be raised dramatically by miners voting for an increase. As long as the Block Gas Limit clearly stays ahead of demand fees will still be low. But it's possible for miners to choose not to vote for an increase or technical limitations will make it impractical to raise the Block gas limit any further. At that point ethereum may see very high fees, as we have all witnessed on bitcoin or worst. So it is safe to say both Ethereum and Bitcoin are trapped in the same cage.
Bitcoin Cash increase in value at a rather very rapid rate majorly due to the unpopularity bitcoin was receiving and the much media attention and investors dollars being poured on to it. Roger Ver, an early investor in Bitcoin and a Bitcoin cash advocate through his website Bitcoin.com and many other partner sites single handedly contributed to the price boost of Bitcoin Cash through giving it more media attention and soliciting for heavy investments for BCH based projects.
In Terms of transaction fees Bitcoin cash charges more than what ethereum charges although by only a small margin. The other problem with Bitcoin cash is the absence of adequate infrastructures to enable its exchange into other currencies or fiat money although this is just a temporary problem.
Litecoin, IOTA, Stellar and other small cryptocurrency might be having high transaction propagation rate and low fees simply because they only have a few thousand users. The fuse with emerging cryptocurrencies is that the developers might turn not to be fully trustworthy. In the worst instance some developers may abandon the projects and escape into thin air with user deposites.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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