The Bitcoin Fork Explained
LONDON – Those who have been following the exceptional rise of bitcoin over recent years will have heard of the bitcoin fork, which occurred in the first week of August this year. As with most things to do with the cryptocurrency, prior to the fork nobody knew quite what was going to happen and what it would mean for the value of bitcoin. By all accounts, it turns out that the recent development was a good move for the e-currency, and it has opened up a whole new dimension to how it can be used.
The reason for the bitcoin fork was to create bitcoin cash, which is a totally separate entity to the well-established e-currency and will have its own blockchain. The fork means that there are now two separate currencies; bitcoin on the original blockchain and bitcoin cash on the new one. Those who held bitcoin prior to the fork were duly rewarded, as they kept onto their bitcoin but also received bitcoin cash. Dr Garrick Hileman, a researcher at the Cambridge Centre for Alternative Finance, tried to describe the fork in more simple terms and compared it to a tree. He said that “[the] bitcoin tree is going to grow like nothing happened today. It’s like a shoot has dropped off and is growing into a new tree.”
Trading in bitcoin cash is at the moment certainly seen as more of a gamble than sticking with its parent currency, which has a stronger foothold in international markets. But with it being just a tenth of the price of bitcoin on the day of the fork, if traders and companies take to the currency it could very well be the prime time to invest. If traders were able to jump on bitcoin at that price knowing what they know now, they would have gone wild for it. Therefore it may be sensible to invest some money in bitcoin cash, but no more than you are prepared to lose. Or, alternatively, you could trade bitcoin rather than holding it. Sites like ForexBonus detail how it’s easier and safer to trade the e-currency using contracts for difference. This is basically the same as betting on price changes in the e-currency.
Many thought that the fork would lead to a crash in the value of bitcoin, but the original e-currency has prevailed yet again. Earlier in 2017, the currency which was established in 2009 by the mysterious Satoshi Nakamoto, rose to record highs of around $3000 as Japan began to embrace it. After the fork, though, it soared even higher, and peaked at a value of $3,360.67. With bitcoin proving the doubters wrong time and time again, it seems like it’s time for the whole world to get serious about the currency that has the potential to take over the world.
Now that the fork has happened, and there is a clearer picture moving forward, it could be a great time to invest or trade in bitcoin and bitcoin cash. Those who ignore it now could be kicking themselves years down the line.