The power brokers behind Bitcoin were trying to bring all parties involved to a single solution which would have allowed for the continuation of a unified digital currency. They weren’t able to do that by the deadline this morning as a result of which Bitcoin has now split into two: Bitcoin and Bitcoin Cash. This begs the question, what now?
The Bitcoin split, or “fork,” has been discussed at length in the days leading up to August 1st. Despite the split, there’s nothing fundamentally different about how the digital currency will operate now.
As many of you would know, Bitcoin was the first digital currency built on blockchain technology. What that means is that there’s no middleman like a bank to verify transactions, they’re done independently by the network. Bitcoin Cash will operate in the same manner as it has been built on the same blockchain network as Bitcoin proper.
The split does increase the size of the blocks that make up the entire Bitcoin network which means that the network can now process more information much faster. Those who have been backing this fork believe that it’s good that Bitcoin Cash has been created and that it’s going to address some issues related to the Bitcoin network that people have been facing, such as very slow transaction speeds.
The fork marks the end of a long argument between developers that favor smaller Bitcoin blocks in order to protect against hacks and miners that want to increase the size of blocks so that the network is more scalable and faster.
Even though Bitcoin Cash is a reality now, only a handful of bitcoin exchanges and miners are supporting it so far. People who owned Bitcoin prior to the fork on exchanges or in wallets will see their holdings increase as they will receive one unit in Bitcoin Cash for every unit they hold.
This obviously doesn’t mean that their money will double. The value of Bitcoin will see a decline equal to the value of a unit of Bitcoin Cash.
Once word was out that the fork had taken place, Bitcoin started trading down almost 6 percent at $2,715. There’s likely going to be volatility and confusion in the short term but it should all sort itself out in the days to come.
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