Bitcoin, the world’s most famous digital currency, split in two on Tuesday (01/08/2017). So now there are two versions: The original Bitcoin and a new type called Bitcoin Cash, which is now being bought and sold at online exchanges.
Bitcoin Cash, a new cryptocurrency, was created when a group of miners “branched” from the main bitcoin blockchain, in English, they switched to a new, incompatible software that changed the rules by which the network would function.
Annoyed by what they see as a harmful lack of development toward increasing the number of transactions the Bitcoin system can handle (seven per second, compared with thousands handled by conventional systems like MasterCard and Visa’s. It’s meant to run just like Bitcoin, but no one knows if the mining community will buy into the newly created currency.
Over the course of the day, miners backing the project succeeded in formally branching off, ultimately adding blocks to the separate blockchain, and in the process, building what they believe could come to be a growing economy centred on its development.
The new currency, Bitcoin Cash, needs to attract miners. Miners are what make the Bitcoin world run. Their computers process the digital transactions people make using Bitcoin and add them to its cryptographic account book, known as the blockchain. In return for this effort, miners are rewarded in Bitcoin.
Owners of pre-split Bitcoin will be recorded as owning cryptocoins on both blockchains. Some Bitcoin exchanges, where owners transact and store cryptocurrency have said that they will support the new currency and credit customer accounts with Bitcoin Cash when it appears. But others will not.
Bitcoin Cash was trading at about $466.02 today and it’s surprising that its arrival has not undercut the value of the original version. As of this morning, the price of Bitcoin classic was around $2700.35 not far below its all-time high of just above $3,000.
Despite Bitcoin Cash’s confusing origin and name, it seems the new cryptocurrency is gaining wider acceptance. Bitcoin Cash’s value, and its effect on cryptocurrency’s place in the world will be determined by how many investors and users switch from traditional Bitcoin.
Support by Bitcoin exchanges will enable the use of Bitcoin Cash.