What Happened to Bitcoin Price?
Bitcoin’s price went crazy last Wednesday after supporters for a new version of bitcoin, SegWit2X, suspended their plans to split. The ‘hard fork’ was called off as the group did not build up enough consensus from the community.
Bitcoin surged up to around US$7,700 after the announcement. That is almost US$1,000 over the amount it was trading a week before. It has since dropped and is now trading at around US$7,350.
In case you were not aware, the bitcoin community has been in the midst of a massive internal fight over how to update the software that runs bitcoin.
On one side there is the miners, who want to double the size of the bitcoin blocks. They argue the currency needs larger blocks to reduce transaction fees and times. Current blocks are 1MB in size and they are added every 10 minutes.
On the other side, there is the developers, who want to maintain the core fundamentals of bitcoin as they are.
Bitcoin has had many forks in its short history. Yet, what was different about this one was that if it divided, it would not have been clear which version would have been the official one.
What Now for Bitcoin?
Miners dropped plans for the split after fearing that continuing with the disagreement ‘could divide the community and be a setback to Bitcoin’s growth.’
The battle may be over…for now.
But as bitcoin keeps attracting more users, the controversy on how to accommodate new growth will likely come up again.
For Money Morning