Bitcoin split creates new crypto-currency
A new form of Bitcoin has been unveiled and will be mined separately for the first time in the crypto-currency’s history.
Bitcoin Cash has broken away from Bitcoin, following a long period of discussions and disagreements over the development of the currency.
As yet, there has been no large swings in the value of Bitcoin, but the market is still adapting to the creation of the new crypto-currency.
One expert has said that the creation of this currency has been smooth thus far, saying that the trade in Bitcoin Cash has been “robust”.
Bitcoin Cash has been created in attempt to increase the maximum capacity of Bitcoin’s technology, the blockchain. The blockchain is a digital ledger that records all bitcoin transactions. These transactions are usually processed at a slow rate as only on megabyte (MB) of data could be added every 10 minutes.
Bitcoin Cash has the capability of adding blocks as large as 8MB, which supporters hope will fix the issues caused by slow transactions.
Bitcoin Cash officially came into existence when block number 478559, which was a shade under 2MB in size, was mined.
Dr Garrick Hileman, research fellow at the Cambridge Centre for Alternative Finance said: “a market seems to be emerging for Bitcoin Cash that looks to be relatively robust.”
The new crypto-currency was trading above £300 around 12 hours after its creation, while Bitcoin saw a slight fall in price but was still trading about £2,000.
Due to its larger size, Bitcoin Cash takes up more storage space from those who wish to take part in mining. This mining involved computers being used to solve mathematical problems to authorise transactions, which in turn gives the miner bitcoins as a reward.
“Bigger players with access to server farms and big budgets will have no problem running bigger nodes, but smaller operators could be squeezed out,” said Dr Hileman.
“Will companies dominate Bitcoin Cash more than Bitcoin? We’re going to see this in the flesh now, how this will play out.”
Vili Lehdonvirta, of the Oxford Internet Institute, has suggested that the creation of a new currency could split the userbase and make it harder for either currency to go mainstream.