- Thomson Reuters
Bitcoin power brokers were unable to come behind a single solution that would have preserved a unified cryptocurrency by Tuesday morning’s deadline.
As such, the digital currency has officially forked and split in two: bitcoin cash and bitcoin.
Bitcoin cash is a fork of the bitcoin system: It’s a new software that has all the history of the old platform, but instead of 1-megabyte blocks, it will have 8-megabyte blocks.
Miners have been able to mine for bitcoin cash since Tuesday morning, but the first mine was at about 2:20 p.m., according to CoinDesk.
But some bitcoin enthusiasts think this is only the first split of the cryptocurrency.
To recap, bitcoin power brokers have been squabbling over the rules that should guide the cryptocurrency’s blockchain network.
On one side are the so-called core developers. They are in favor of smaller bitcoin blocks to protect it against hacks. On the other side are the miners, who want to increase the size of blocks to make the network faster and more scalable.
Until last week, the solution known as SegWit2x, which would double the size of bitcoin blocks to 2 megabytes, had nearly universal support. Those miners who did not participate in the fork began implementing part of SegWit2x on Tuesday.
According to Charles Morris, a chief investment officer of NextBlock Global, an investment firm with digital assets, since SegWit2x is not fully implemented – the block-size increase isn’t expected to happen for months – another fork is on the horizon.
“Hardliners who don’t want to see the size of blocks increase could spark another fork down the line,” he said.
Peter Borovykh of Blockchain Driven, a blockchain technology company, told Business Insider that Tuesday’s split set a precedent.
“Bitcoin is no longer immutable,” he said. “If one fork happens, then it could trigger an avalanche.”
Arthur Hayes, the CEO of BitMex, a bitcoin derivatives exchange, told Business Insider that there could be up to four iterations of bitcoin, and that one version could rise above the rest and possibly reach $5,000 a coin.
“There are people with billions of dollars of skin in the game, and they will ultimately go with the superior bitcoin network, and then the market will follow,” Hayes said.