The price of bitcoin took a big hit over the weekend, losing almost one-third of its total value. The price fluctuations may be the result of a contentious debate over the future of the cryptocurrency. A fundamental difference of opinion regarding the size of a “block” or group of transactions that is processed in the bitcoin network caused the divergence of two bitcoin “parties.” One group, called “Bitcoin Core”, wants to maintain this standard block size of one megabyte while the other group, “Bitcoin Unlimited” wants to increase the size, primarily because computing power is increasing and can handle larger block sizes. Bitcoin traders aren’t necessarily concerned with the fundamentals of the argument. Instead, they are concerned that if the conflict is not resolved (and there is no sign of a potential resolution), bitcoin will face a currency split, called a “hard fork” that could severely shake bitcoin markets and bitcoin confidence.
While the debate has been going on for some time, the consequences were made clear on Friday when several bitcoin exchanges made statements alerting traders that, in the event of a hard fork, they would support the new “unlimited” bitcoin currency. This news scared traders who sold off bitcoin as it fell to $970 from around $1250 just a few days before. To make matters worse, the security of Bitcoin Unlimited is in question after its software was hacked last week. Needless to say, bitcoin has been plagued with uncertainty recently, evidenced by the SEC’s denial of a Bitcoin ETF last week.
Bitcoin traders and advocates are unsure what the future of the digital currency will bring, but recent developments suggest that they are preparing for a hard fork that could dramatically change bitcoin markets.
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