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The Bitcoin network can barely process five transactions per second, compared to more than 20,000 on the Visa network. The cost of a bitcoin transaction can fluctuate significantly and is typically much higher than a debit card," Berezin explains.
The slowness of the Bitcoin network is inherent in how it was designed. Due to their decentralized nature, blockchains must rely on elaborate procedures to prevent bad actors from taking control. Bitcoin and other popular cryptocurrencies such as Doge use the so-called proof of work algorithm, a tedious system that has been superseded by the new mechanisms used by other cryptocurrencies.
The BCA Research expert explains that to see how this algorithm works in simple terms, you have to imagine that a spam email arrives. One way to eliminate spam is to require all my contacts to waste $10 worth of electricity to send a single email. This is effectively how bitcoin works. It's safe, but it's also very clumsy.
An alternative to proof of work is proof of stake or PoS or 'proof of participation'. Smaller cryptocurrencies like Cardano and Solana use this algorithm, and Ethereum is in the process of migrating. From Bit2me they explain that the nodes that mine in PoS are called validators. The decision on which node has to validate a block is made randomly, but giving greater probability to those who meet a series of criteria. Once the selection process is over, the chosen nodes will be able to validate transactions or create new blocks.
The slowness of the Bitcoin network is inherent in how it was designed. Due to their decentralized nature, blockchains must rely on elaborate procedures to prevent bad actors from taking control. Bitcoin and other popular cryptocurrencies such as Doge use the so-called proof of work algorithm, a tedious system that has been superseded by the new mechanisms used by other cryptocurrencies.
The BCA Research expert explains that to see how this algorithm works in simple terms, you have to imagine that a spam email arrives. One way to eliminate spam is to require all my contacts to waste $10 worth of electricity to send a single email. This is effectively how bitcoin works. It's safe, but it's also very clumsy.
An alternative to proof of work is proof of stake or PoS or 'proof of participation'. Smaller cryptocurrencies like Cardano and Solana use this algorithm, and Ethereum is in the process of migrating. From Bit2me they explain that the nodes that mine in PoS are called validators. The decision on which node has to validate a block is made randomly, but giving greater probability to those who meet a series of criteria. Once the selection process is over, the chosen nodes will be able to validate transactions or create new blocks.
