BITCOIN RETREATS AFTER SPLIT CREATES RIVAL BITCOIN CASH, ETHEREUM HIGHER
BITCOIN RETREATS Bitcoin traded lower on Tuesday, after the blockchain supporting the cryptocurrency split into two, creating a new competitor, Bitcoin Cash.
On the U.S.-based Bitfinex exchange, bitcoin fell to $2,751, down $131 or 4.55%.
Bitcoin’s blockchain – the digital ledger which records every bitcoin transaction – split into two at 08:20 ET Tuesday, in an event know as a ‘hard fork’, creating a competing currency, Bitcoin Cash.
The ‘hard fork’ comes after weeks of optimism that Bitcoin would avert a split, after bitcoin miners signalled support for SegWit2X, a software upgrade aimed at resolving bitcoin’s scaling problem.
Bitcoin transactions are limited to 1-megabyte every 10 minutes – or seven transactions per second. This compares to 2,000 per second for Visa and means that at peak times bitcoin transactions can take hours to be fulfilled, inhibiting the currency.
Some members of the bitcoin community, however, failed to signal support for SegWit2X, on the back of concerns that the proposed software upgrade doesn’t adequately addressed the scaling problem.
The two rival proposals – Segwit2x and Bitcoin Cash – are attempting to solve this problem in different ways.
Bitcoin Cash seeks to increase the block size to 8-megabytes whereas SegWit2X proposes moving transaction data outside of the block on a parallel track with plans to increase bitcoin’s block size later in the year.
Bitcoin Cash, however, is likely to be worth only a fraction of bitcoin, as some of the biggest bitcoin wallet providers don’t have immediate plans to support Bitcoin Cash.
“As of today, we have no immediate plans to fully support the Bitcoin Cash fork within our main product. Blockchain’s Alsyon Margaret said on Sunday.
Meanwhile, Ethereum, rose to $229.07, up 14.82%.
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