Bitcoin Forks Into Two Currencies As Coinbase Disables Withdrawals
Bitcoin has split into two digital currencies, the old bitcoin and the new bitcoin cash. Digital currency miners and developers could not reach an agreement and so now there are two bitcoin currencies.
The new bitcoin currency called Bitcoin Cash has all the characteristics of bitcoin but with the added advantage of a larger block size.
Anybody who holds the original bitcoin will have the same amount of Bitcoin Cash as long as they take the steps needed to convert.
A transaction of bitcoin happens when a block is added to the blockchain database. The problem is that blocks are limited to 1MB every 10 minutes or about seven transactions per second. That means that bitcoin transactions can take hours or even days to occur. In comparison, Visa allows for about 2,000 transactions per second.
Segwit2x versus Bitcoin Cash
Segwit2x will move some of bitcoin’s transaction data outside of the block and on to a parallel track to allow more transactions to take place now. Then in November Segwit2x will push for doubling the block size to about 2MB around November 2017.
Bitcoin Cash instead increases the block size to 8MB or about 56 transactions per second. Those pushing for Bitcoin Cash are sceptical that Segwit2x plan of doubling the block size in November will actually happen or even be enough.
Segwit2x has been adopted by enough of the bitcoin community to proceed, but more in leaning towards Bitcoin Cash saying that Segwit2x proposals do not go far enough to fix the transaction time issue.
Coinbase turned me off of buying bitcoin when they used a Latvia bank for clearing transactions which was blocked by my US bank. It comes as no surprise to learn that Coinbase said it will not support the new Bitcoin Cash and it said in an email alert that it has temporarily disabled bitcoin withdrawals and deposits.
Stay out of bitcoin right now. Let all the drama play itself out before you consider taking a long entry in bitcoin.
Do you have any thoughts on bitcoin splitting into two digital currencies? Leave your comments below.
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