During August of 2017, we saw a hard fork in Bitcoin’s network. The new protocol and cryptocurrency tat split apart is named Bitcoin Cash, which is now the fourth largest by market capitalization. Since the introduction of Bitcoin Cash, the community has been divided now more than ever with even Microsoft taking part in the discussion.
The supporters of Bitcoin Cash believe it to be the answer to the numerous Bitcoin scaling problems, with its principal solution increasing the size of the block. This is in contrast to the Bitcoin’s community idea of the Lightning network, which would solve the scalability issue but using a different method. So far, Microsoft appears to stand behind the implementation of the Lightning Network by the Bitcoin community.
This means that Bitcoin Cash, which is a cryptocurrency proposed by Roger Ver, did not receive the same backing or approval. In a statement released by Microsoft, it stated that changes to the original blockchain typically reduce the quality of the network. Additionally, these solutions are not as scalable, which can be a problem for growing it to an international scale.
Microsoft’s statement reads as follows:
“While other blockchain communities have increased their transaction capacities (block size increases), this method can degrade the quality of decentralization for the network and is not as easily scaled compared to other solutions.”
In its statement, Microsoft goes a step further by making a vocal support for the Lightning network protocol that Bitcoin developers proposed and are in the process of rolling out. Microsoft is working alongside the original Bitcoin developers to make the network reach a global scale.
“To remove these technical barriers, we are working on decentralized Layer 2 protocols that run over these public blockchains to help it scale, while at the same time preserving its critical decentralized attributes.”
Microsoft Develops Digital IDs
For the time being, Microsoft is developing an identity system that is wholly decentralized. The idea behind Microsoft’s centralization is to give people the ability to control their identities and private information. As it stands, private data is managed and controlled by centralized figures. Through the use of various decentralized blockchains, Microsoft aims to improve the lives for people all over the world.
Microsoft’s intentions are summarized by a statement made by Alex Simmons, who is the Director of Program management from the Microsoft Identity Division:
“To reach this goal, Microsoft believes that it is a requirement for people to control each and every aspect of their digital identities. Rather than allow for abroad consensus for phone apps and services that have its owners identities spread across the broad, individuals require an encrypted hub where they can store their data and have control and control access.”
To get this job done, Microsoft is in the process of developing an off-chain solution. This is would allow for a massive amount of private information to be stored and processed without clogged up the primary blockchain network. In addition to this initiative, Microsoft is also working alongside the Decentralized Identity Foundation (DIF). At present, Microsoft and DIF are working on a demonstration for these ID solutions.