What happened to the bitcoin price overnight?
After a strong rise last Thursday on news that a hard fork had likely been averted for now, bitcoin has reversed some of those gains and is sitting at $3,217 at time of writing.
Why did it reverse?
The most likely explanation is that another proposal, Bitcoin Cash (BCC), made a sudden announcement that they are still planning to go ahead with a fork on 1 August.
This caught lot of people by surprise and dampened the renewed enthusiasm that had arisen when the initial fork fears seemed to have passed.
What’s Bitcoin Cash?
As a fork of bitcoin, it’s based on the same principles and shares a transaction history up until the time of the fork.
That means if you own Bitcoin (BTC), you will hold the same amount of Bitcoin Cash (BCC) after the split.
The main differences between the two is that Bitcoin Cash is implementing three main features which it says will strengthen bitcoin’s use as a means of exchange.
First it offers a much larger block size of 8MB. Secondly, it looks to generate blocks quicker by adjusting the difficulty level faster. And lastly it offers something called ‘replay and wipeout’ protection. This refers to protections to ensure transactions on each chain remain valid only on the intended chain.
What should holders do?
The easiest thing to do, is to do nothing. As long as you control your own private keys then you will have coins in both BTC and BCC.
As always, there’s no guarantee that this fork will actually occur. And if it does, there is no guarantee it will be a success, or have enough backing to remain viable long term.
But it will be a free punt for current holders anyway.
Crypto Analyst, Money Morning
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