Why Cryptocurrency Is Fueling the Next Generation of Engineering Jobs

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Because of the increasing number of miners, the cryptocurrency network—depending on the chosen cryptocurrency—changes the mining difficulty to ensure equal opportunities for every miner. Mining one block in 2009 would cost 50 Bitcoin, in 2012, it went down to 25 BTC, and in 2016, it was halved to 12.5 BTC. (source)

In addition to the difficulty level in cryptomining, scalability of Bitcoin—and other cryptocurrencies—is also becoming a problem. The problem arises from the size of the blocks in the blockchain which determines the limited number of transactions it can contain.  The nature of the blockchain is to ensure a more secured transactions, but that slows down their speed.

Though they’re still faster than checks and other Credit/Debit card transactions, Ethereum manages just 20 transactions per second (tps), and Bitcoin processes only seven transactions per second—still way far from their great potential. Ripple, however, surpassed Visa with 24,000 tps and PayPal with 193 tps, and took the top position for the fastest transaction speed, with a whopping 50,000 transactions per second—giving us the example of what the future of transaction speed should be, and the hope for other cryptocurrencies with a scalability problem.

But as they say; when there’s a problem, there’s also always a solution. And there are some possible solutions or ways to address the scalability problem of the blockchain suggested by developers. Some of them include “Segregating Witness” or Segwit, an alternative solution proposed by Bitcoin developers to process more transaction without increasing the block size by moving the signature data to a separated block extension that would provide more space for more transactions in the original block. Another possible solution is Sharding, a decomposition of a database into smaller units that work individually and at the same time. This method allows nodes to store a subset of the blockchain and verify transactions to increase the number of transaction that can be processed in the blockchain. And “micropayments channels,” is also a possible solution. Instead of broadcasting every transaction, broadcasting just the net effect of the transaction would decrease the transaction cost and the number of transactions on the blockchain, without reducing or affecting the number of cryptominers.

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