BITCOIN IS SPLITTING IN TWO. NOW WHAT?

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IMAGINE LOGGING ONTO your checking account and seeing that you now also have a second account stocked with an equal amount of a newly created currency. It could happen this morning to many people who hold cryptocurrency bitcoin.

Not long after 8am EDT, a new currency called Bitcoin Cash is due to appear, split from bitcoin in a technical maneuver called a “hard fork.” It’s the project of a group that says bitcoin’s keepers are limiting its reach by resisting change.

The creation of Bitcoin Cash is the most striking result yet of a two-year-old feud over bitcoin’s future. Bitcoin is collectively valued at $47 billion, but remains a niche product. Backers of the new currency say it’s necessary if bitcoin is to make a real mark on how the world uses money.

Bitcoin Cash’s confusing origin—and name—risk making it harder for cryptocurrency to gain wider acceptance. “Bitcoin’s an incredibly well-known brand and to the extent it’s fracturing into various pieces, that’s confusing to regulators and consumers,” says Dan Morehead, founder and CEO of Pantera Capital, which invests in bitcoin and digital-currency startups. Morehead says he’s neutral on the dispute. “It just sounds bad; we’re not used to currencies that split into two.”

Adding to the confusion: Not everyone who holds bitcoin will get an instant stash of Bitcoin Cash today. Some leading bitcoin-storage services have said they won’t recognize the new currency, forcing people to move their business if they want to claim the new variety of cryptocoins.

Bitcoin was created by a pseudonymous coder (or coders) known as Satoshi Nakamoto, who released the software that powers the currency in 2009. It relies on a network of computers linked over the internet that collaborate to process and record all transactions in a digital ledger called the blockchain. Computers dubbed “miners” keep the ledger updated by adding to the sequence of “blocks” that make up the blockchain as new transactions take place. Proponents say this system creates a trustworthy currency free from political oversight, and capable of faster, cheaper digital transactions than possible with conventional currencies.


Read more: https://www.wired.com/story/bitcoin-is-splitting-in-two-now-what/

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