Bitcoin Improvement Plan 91 has locked in this week. That is great news, right?!?
You are probably asking what the heck is BIP91 and why should we care…
There has been a struggle over many months as the companies, miners and engineers that work to make improvements to the Bitcoin network and technology have been “negotiating” the next code upgrade for the Bitcoin network. BIP91 is the set of code/rules proposed by engineer, James Hilliard, of Bitmain Warranty.
How does BIP91 become locked in across a decentralized network?
The threshold to lock in this set of rules/code was that 80% of miners had to place a “signal bit” in their software to show they support BIP91 and in the future would reject anything that is not compatible with the BIP91 standard.
BIP91 met that 80% threshold on 07/20 and this happened as the people rejoiced!
Well that does sound great…why is that important again?
The BTC network has grown over the last few years and the number of transactions per day have increased significantly. This has caused slower processing and verification of transfers at a higher cost per transaction (still much lower than what your average financial institution will charge). BIP91 is the first step of future improvements (Segregated Witness or SegWit) that will increase the size of the blockchain, will increase the speed of transactions and make way for the Lightning Payment Network. SegWit is already activated on LiteCoin (another digital currency).
What would have happened if the miners and engineers could not come to an agreement and the 80% threshold could not be met for signaling of the code upgrade?
Let’s say that only 50% of the Bitcoin Miners signaled support for BIP91 by August 1, 2017. This would cause what is known as a hard fork of the BTC blockchain as 50% used the old (non BIP91 blockchain) and the 50% used the new code and ignored any transaction that did not support BIP91. This would create 2 blockchains that would not share information and miners could continue to process transactions on both blockchains (think of the US Civil war when there was a US currency and a Confederate currency) and this would split the network into 2 different types of currency. It does not appear this will be an issue though as the Miners and Engineers were able to come to a compromise and have met the 80% threshold for BIP91. This will allow the BTC network to continue to grow and increase features to prepare for mainstream use and rapid development.
Comments or questions, post in the comments sections.
There is a limit to how many Bitcoin (BTC) exist today and how many can exist in the future. The current amount of BTC in circulation today is around 16,451,000 as of July 15, 2017.
The max BTC that will ever be produced/mined is 21 million. 21 million may not sound like a lot when you consider it may one day replace Gold as the store of value globally but this has been solved by allowing each BTC to be broken down into parts of a coin. Think of this as the same as having 1 x $100 dollar bill versus 100 x $1 dollar bill. The current price of 1 full Bitcoin as of July 17, 2017 is around $2160 US.
With the current exchange rate I could send you a full Bitcoin worth $2160 or I could send you .1 BTC worth $216, or .001 BTC worth $2.16. You can see by this example that you can send and receive any comparable denomination with the feature of fractional coins or parts of coin.
The main point you should take from this post is that there is a limit to how many BTC can be produced and this can help to solve the problem of governments printing money at will which causes the money in your bank account, your life savings and your retirement to have less purchasing power as new dollars are printed and pumped into the market. This also reduces the impact of counterfeit currency as Bitcoin is nearly impossible to counterfeit.
The Oxford dictionary describes Cryptocurrency as “A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.”
You may have heard of Bitcoin, Ether, Litecoin or any of the other lesser known coins. Bitcoin was developed in 2009 and has grown significantly since that time. Bitcoin was created as a form of currency that is not controlled by any one government or bank. The decentralized nature of the payment network is what makes it so powerful. No single bank, government or group controls the currency since all transactions that occur with Bitcoin are shared on a ledger that is shared with many nodes in the network that spans the globe.
This global, decentralized feature allows the currency to be used and accessed by all. This is very attract to the citizens of many countries that have an unstable currency due to political agenda or social issues. The benefit of removing banks from banking gives more power back to the end user and will allow for a lower cost to use and transfer money in a global market.
If you have ever purchased items overseas or attempted to transfer money between accounts you may have noticed it can take several days to complete the transaction and the risk for fraud/scams are very high. Cryptocurrency plans to solve many of these issues by making this process faster, transactions cheaper to process and stopping fraud.
Welcome to ProtectingCoin.com. This site is dedicated to helping the average user understand and follow the world of Cryptocurrency. This technology is still an infant just learning to crawl but over the next few years it will seep into everyday life and become a mainstream technology. The goal of any great technology is to enhance the user experience and complete tasks while the underlying technology becomes invisible to the user. Think of how the infrastructure of delivering electricity to your home and the internet to your hand has become all but invisible to the end user. Over the next few years Cryptocurrency will go the same route and the final products of Cryptocurrency will become a part of your daily life to order products, purchase services, store data and any other tasks that require a high level of security and reliability.
This site will focus on Cryptocurrency but will also cover some other happenings in the Cyber World to help you stay informed and to protect yourself. We are all inhabitants of this Cyber World and the changes and risk are increasing daily. Information is the most powerful tool to protect yourself from these risk as you can no longer only rely on someone else to protect your interest online. You must be informed and follow best practices to protect your accounts, finances and identity online. As our tag line says “It’s dangerous to go alone, take this!”…the “this” is this site and the tips and information that will be shared.
Thank you for checking us out and feel free to comment any suggestions or feedback for information you would like to see on the site.