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Bitcoin’s Fork And Its Security Implications

Stroz Friedberg is a specialized risk management firm built to help clients solve the complex challenges prevalent in today’s digital, connected, and regulated business world

Despite the fact Bitcoin continues to be the most followed fork, numerous relevant yet controversial updates took place in the code base. Due to an arbitrary limitation in the block size to 1Mb, the number of transactions that can go inside a block, and the time it takes to generate a new block in the blockchain, Bitcoin is able to process about 3 transactions per second. Although Bitcoin could theoretically process up to 7 transactions per second, this number is never being reached. Compare this number with Visa’s 24,000 transactions per second and it quickly becomes obvious that Bitcoin desperately needed changes to improve scalability. Effectively Activated on August 23rd with block 481,824, BIP 91, better known as Segregated Witness (SegWit) doubled the maximum number of transactions on the Bitcoin network to 6 transactions per second. While not an impressive number, it accomplishes this improvement maintaining backward compatibility without touching the hard-coded 1-megabyte limit. If current investment in Bitcoin hardware is maintained, it becomes easy for the majority of miners to endorse the change.

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