Bitcoin Forks & Bitcoin Cash

The leading digital currency has officially forked today. Bitcoin power brokers couldn’t adopt a single solution which would have preserved the integrity of the famous cryptocurrency. Instead forcing it to split in Bitcoin and the newly created Bitcoin Cash. This causing BTC trade slightly lower this Tuesday morning.

Civil War: Miners and Developers

The civil war between developers and miners over Bitcoin’s future has caused the well-known cryptocurrency to fork today. Core developers wanted to keep bitcoin network’s blocks intact to protect it from hacks. Meanwhile, some miners have aggressively promoted their solution of speeding up the network by increasing the block’s size. This increases the risk of getting Bitcoin transactions stuck in limbo for hours or days. Therefore, it increases the next blocks’ cost. (since the miners’ fee will also get higher). It is determined the Bitcoin community come up with a new solution of speeding up the Bitcoin transactions’ approval process by forking the digital currency.

Bitcoin Fork

A fork is a "change to the software of the digital currency that creates two separate versions of the blockchain with a shared history." There were disagreements on whether to adopt a soft or hard fork. One is to create a new chain and ‘wipe out’ the weakest one. The second is to split the chain and create two Bitcoin versions permanently. In the end, the hard fork was the one adopted after Tuesday’s morning deadline. This generating a new Bitcoin – the Bitcoin Cash. The major difference between Bitcoin and Bitcoin Cash is the block size, 1MB vs. 8MB. Which, is a promise of a faster transaction approval.  The hard fork created an identical blockchain. So, it mirrors the people’s existing bitcoin wealth in Bitcoin Cash. The new digital currency is bootstrapping by in-built value. Futures for the new Bitcoin gave back all of an initial 48% hike to $422 but traded 12% lower near $255 as of 1:53 PM, ET. We see forks in cryptocurrencies before, like the Bitcoin's rival, Ethereum. Ethereum forked in 2016 and became the form of the digital currency we know today. Bitcoin miners have been able to mine for new bitcoins since this morning. Yet, the first Bitcoin cash was reportedly mined at about 2:20 PM. Some analysts noted that Bitcoin Cash required the same amount of computational work as the original Bitcoin. However, a significantly smaller number of miners are trying to create the new cryptocurrency.  

Bitcoin Cash

Bitcoin Cash’s larger block size may prompt investors to forsake Bitcoin in new currency’s favor. It might be negative for the price of the original Bitcoin. Since the Bitcoin Cash has drawn its initial value from Bitcoin's market capitalization, it caused the bitcoin's value slightly drop after its adoption. Though, the entire market is still keeping an eye on the Bitcoin Cash to see " how the situation evolves." Notable: Please keep in mind that if you want to buy gold with Bitcoin at Bullion Exchanges still accepts only the regular Bitcoin (BTC).