August 1st will forever be remembered as one of the most crucial points in the history of Bitcoin, the day a new cryptocurrency was created after the much anticipated ‘hard fork.’
After weeks of speculation, the disagreement about how to operate the popular Bitcoin cryptocurrency has finally led to a ‘hard fork’ that divided the digital currency and gave birth to a new one.
Yesterday, Coindesk reported that a subset of Bitcoin miners already began operating a different software to create a competing cryptocurrency known as Bitcoin Cash.
The fork came after news that Bitcoin has been struggling to cope with its surge in popularity broke out. Apparently, Bitcoin’s value, which suddenly spiked from over $900 USD per at the beginning of the year to a staggering $2700 USD per now, was too much for the company to handle.#Bitcoin hard fork has began. #BitcoinCash now a new cryptocurrency.Click To Tweet
The spike in its value led to a boom in Bitcoin transactions that the cryptocurrency’s decade-old system struggled to cope with.
What is Bitcoin Cash?
According to Bitcoincash.org, Bitcoin Cash is the continuation of the Bitcoin project as a peer-to-peer digital cash. It is a fork of the Bitcoin blockchain ledger, with upgraded consensus rules that allow it to grow and scale.
Since Bitcoin Cash is a fork of the ledger, all Bitcoin wallet owners will have the same amount of Bitcoin Cash as they did in Bitcoin at the time of the forking.
However, if their Bitcoin funds are stored in third party company’s like an exchange, they must inquire about their cash on the said exchange. It appears that not all exchanges support the new cryptocurrency–yet.
It was also explained that the fork was a necessary move to resolve the issue regarding Bitcoin’s maximum limit of data per block that has been a subject of debate within the Bitcoin community for years.
According to the developers of Bitcoin Cash, the 1MB blocksize of the legacy Bitcoin has already hit an ‘invisible wall’ this year and has resulted to Bitcoin becoming unreliable. Add to that all the sudden increases in transaction fees.
To resolve the matter, Bitcoin Cash increased its blocksize to 8MB as part of a massive on-chain scaling approach. Also, unlike the legacy Bitcoin, Bitcoin Cash has no single development team. Instead, it adopts a decentralization development scheme that has multiple teams of developers.
Right now, the future of Bitcoin and Bitcoin Cash is still bleak, with each side vying for the support of pool miners and exchanges.