Bitcoin Debate Heats Up, Split Coming
$BTCUSD at 3,952.73 Wednesday
Bitcoin is likely to split again this November, creating a 3rd version of the world’s largest cryptocurrency as miners and developers pursue separate visions to scale up its growing market.
Major industry players say consensus between opposing camps looked increasingly unlikely. That opinion was echoed by some of the biggest mining pool operators and also programmers who were instrumental to developing the infrastructure of the original Bitcoin network.
In recent weeks, a group of miners split off from the legacy Bitcoin to use a new version known as Bitcoin Cash.
Bitcoin’s popularity has led to congestion in trade, with transaction times and processing fees at one point soaring to records. Debate over how to deal with the problem has divided the trading community, with some proposing boosting the number of transactions in each block that has to be verified by miners, and others advocating for moving some information off the main network.
One faction of the community is pushing for a network upgrade in November, which could lead to a split if no consensus is made.
When the split occurred around the beginning of August, with Bitcoin Cash diverging from legacy Bitcoin, the digital currency initially slumped 6.8% in a 2-day dive as investors appeared to discount the value of the new coin.
But prices rallied, surging to a record 4,880.85 by 1 September before China announced a crackdown on cryptocurrency exchanges and initial coin offerings that drove prices plunging 20%. Today, Bitcoin Vs USD is trading at 3,952.73 as it taps at the 4,000 resistance mark.
If another tear occurs in November, it would create a 3rd version of the cryptocurrency and potentially further scatter capital and resources as 3 offshoots of Bitcoin emerge.
In August, miners agreed to implement the 1st phase of the proposal, or SegWit. They were expected to increase the blocksize to 2 megabytes around November in a 2nd phase.
Avoiding such a splinter requires miners to reach at least 92% consensus on supporting the 2nd phase of SegWit2x, but that’s becoming unlikely, according to Wang Chun, co-owner and chief administrator of F2Pool, 1of the world’s largest mining pools.
Even though SegWit2x garnered more than 93% support in July, miners and developers seem to be backing away from the proposal, a compromise that harbors characteristics disliked by extremists on both sides. Wang said he thinks the split will “happen, 100%.”
Many Core developers agree.
Several have said they would prefer to focus on writing code in the future for only the SegWit chain: currently the largest version of Bitcoin at about $64-B in market value.
Bitcoin Cash was split off so miners could boost the block size of transactions. It is more useful as it can be moved more quickly and cheaply than other cryptocurrencies. Some Bitcoin exchanges and wallets have said they will support the new coin, while others are uncertain whether Bitcoin Cash will have lasting market value.
Key players are warning investors to brace for more turmoil.
Core developers say the fork this time could be much more tumultuous, and could incur more user confusion of what version can be dubbed the actual “Bitcoin.”
What it looks like in here: a split is 100% guaranteed, and the split is likely to be more disruptive.
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