Bitcoin completes split into two currencies
Written by Chris Lemmon
Following a period of ideological debate over the future of Bitcoin, the crypto-currency has now split into two separate entities with the new ‘Bitcoin Cash’ being mined for the first time.
The new currency has been developed as a measure to increase the capacity of Bitcoin’s blockchain, as it could previously only have one megabyte of data added to it every 10 minutes – which ultimately slowed the transaction process for users.
Bitcoin Cash blocks are capable of adding up to 8MB of data in the same period of time, which users hope will help speed up the processing of transactions. The larger block size also means that those wishing to mine the new currency need much more computer storage space to take part, which some fear may squeeze out smaller players.
Data miners began switching to the new currency after it launched on Tuesday, with Bitcoin Cash trading above $400 around 12 hours after it was created. Bitcoin itself dropped in price and now sits at $2,719.
Stefan Thomas, chief technology officer at Ripple, commented: “Today’s outcome is good for Bitcoin users as it avoids potentially significant losses and market instability. That said, we think this agreement is only kicking the can down the road, because the fundamental governance issues beleaguering Bitcoin haven’t gone away.
“Even as early as 2011, it was apparent that as Bitcoin grew, it would become increasingly harder to get buy-in for important technical improvements. The “civil war” isn’t over. The root issue is the conflicting incentives between miners, developers and users of Bitcoin.”
Iqbal Gandham, UK managing director at eToro, added: “It’s been a slow start for Bitcoin Cash. The delay in the Bitcoin split could be a result of a lack of miner support for the new cryptocurrency. Everyone expected the split to happen at 1.30pm UK time, or thereabouts. What this really meant is that at some point after this time the very first block of the new chain supporting Bitcoin Cash would get mined. However the time it takes to mine that first block is all a function of how much computing power is thrown at mining this block.”