Since Bitcoin has been created, its underlying protocol has been subjected to several modifications and entirely new projects have been forked out of the original protocol. Litecoin, Dash, Bitcoin Cash, Bitcoin Gold are just a few of the coins that are based of the protocol, with each off them claiming they bring some improvements from Bitcoin.
The Bitcoin blockchain is currently facing a number of weaknesses that have put the most popular blockchain under fire. This is unsurprising as the creator himself, Satoshi Nakamoto, made it clear from the start that he was open to discussion upon his idea. The identified weaknesses in bitcoin have ignited predictions that the cryptocurrency will not be the no1 cryptocurrency for long.
Problems with Speed
Transactions on the Bitcoin blockchain are now confirmed at considerably slower speed that it was two years ago. Delayed transactions are now of common occurrence on the blockchain, leading to a lot of frustration from the users. This has been considered the primary reason why the digital coin isn’t efficient for transaction purposes, another being the high rate of volatility. To encourage mainstream adoption, the value at the time of execution of a transaction should not be different from the time of receipt. This is not the case when it comes to Bitcoin transactions, taking up to several hours, or sometimes days before being confirmed. This weakness has led to the innovations such as SegWit and the Bitcoin Cash fork which all have been based on the efficiency of the network.
Transaction fees are often very high in the Bitcoin ecosystem. Transaction fees are determined based on the number of transactions and the kilobyte size of each transaction. These fees do not go to any central authority, but to the miners as a reward for transaction confirmation. Therefore, transactions that have higher inputs will need more work, so during increased market volatility, miners will present more interest in transactions with less input. This means less work for them, hence transactions that have a higher number of inputs will need to pay higher fees to make them more attractive to miners.
These fees make invalid the assumption that peer-to-peer transactions a a cheaper payment method.
Not so Decentralized
The bitcoin blockchain was designed to be a decentralized platform. But the recent restructuring of the system distributed the majority of mining powers to only a handful of individuals. These means that these few miners that control most of the hashing power will always make the decisions. Many argue that this looks like a centralized system and functions like one.
Bitcoin Atom, a new hardfork
The Bitcoin blockchain will soon have another hardfork by an anonymous team that claim to adhere to the original principals of Satoshi Nakamoto as they will create Bitcoin Atom (BCA).
According to the mysterious leader of the team, the protocol will use both on-chain and off-chain mechanisms, to improve the problem of speed and cost. He noted that even though centralization is the least of Bitcoin’s problem, the way exchanges transaction thus cryptocurrency poses a risk for the industry.
“Centralization is less obvious but the problem with main transfer of value in crypto world is exchanges. Centralized exchanges can be hacked or disappear or shut down by the regulators, and decentralized exchanges such as Etherdelta don’t trade bitcoin and only trade ERC-20 tokens. Even at that, they can get hacked”, he says.
The team behind Bitcoin Atom claim to include exchange functionalities at protocol level on the nodes of Bitcoin itself, therefore nobody controls the exchange as only the system can do that.
The protocol is a combination of proof of work and proof of stake that will be based on the old Bitcoin code, in contrast to other similar implementation before it.
The fork is expected to occur between January 24th and 25th 2018 at Block 505 888.