The Problems That Expected to Arise With the Latest bitcoin Cash Development

In a recent blog post, Chainalysis analyst, Luke Nosek, raised a question as to whether or not developers should "use their money" to work on open source software such as bitcoin cash. Nosek's answer may be surprising to some who are only just learning about the bitcoin technology. He explained that he believes that developers should not "be penny pinching" but rather develop a community of contributors that can work together on solving important problems. Nosek went onto explain that this idea is similar to the way PayPal works, which is not to "buy something in someone else's name and hope you make money", but rather to contribute your ideas and work to create a product that you believe in.

Many people are familiar with the concept of PayPal, but not as familiar with its close relative, the bitcoin cash system. Basically, it is a payment system that is used on a peer to peer basis, through an online network. Similar to how a music band would record and upload their own songs for sale to the internet, bitcoin cash allows everyday people to transfer money from one place to another using their computer. The difference is that instead of dealing with financial institutions like banks, or the government, users themselves act as intermediaries between buyers and sellers. Instead of asking for permission to transfer money, users receive confirmations from the networks of both parties before proceeding with the transaction.

Like PayPal, this online transaction protocol is backed by the cryptography that goes along with the bitcoin ledger, known as the "blockchain". This is a public database that is accessible by anyone who wishes to take advantage of it for any reason. Just like with the traditional Internet, there are no charges for transferring money to a person or organization outside of any particular exchange. Users of this new currency can use their computer to conduct financial transactions just like they would with any other service, like a credit card or a debit card.

Since this technology is still in its earliest stages, the potential for abuse is very real. Because most users do not understand the privacy and safety issues that surround the trade, many developers have been waiting for the right moment to come forward and provide oversight. As of late, there have been some signs of progress, though. One of the most significant developments to come out of the bitcoin cash development is the implementation of what is called "Zerocash". This upgrade provides users with an enhanced level of protection against hackers, making transactions safe from identity theft and fraud.

However, one of the biggest concerns about this emerging medium of exchange is the concern over transaction fees. Since a majority of the network is driven by miners that control a great majority of the overall supply, they are able to increase transaction fees in order to earn profits. If the network starts to experience a large amount of traffic, this new incentive for miners can easily backfire. In addition, there is currently no option for users to reduce transaction fees. Until the bitcoin cash developers can develop ways to motivate miners into submitting more block transactions, this problem will remain unchanged.

Another issue that arises is the question of what will happen to the existing miners that are currently running on-chain without the full upgrade? Since the bitcoin cash development has so far focused on providing an improved product for users, those miners that are on-chain now may be forced to upgrade to the second-layer protocol. The developers have indicated that this will be done gradually and will take some time to reach normal operation. This could be a problem, however, as some have predicted a catastrophic event may occur that would permanently shut down the bitcoin network. The outcome of any of these events is unpredictable, but the recent string of bad news has certainly caused worry among traders. While some have taken precautions and left the markets to ride out the storm, others believe that the worst is behind them.