Will the Bitcoin Fork Continue to Boost the Cryptocurrency’s Value? – TheStreet.com

It is now just over two weeks the Bitcoin split happened creating a new currency – Bitcoin Cash. To make intelligent decisions on where Bitcoin may be headed, it’s imperative to take a look at how this historic fork has impacted the cryptocurrency landscape.

Trace Schmeltz at Barnes & Thornburg LLP explains what is crystal clear: the Bitcoin market has become more valuable than ever.

“By all accounts, this new currency is now the third most valuable cryptocurrency in the world, despite a slow start out of the gate,” Schmeltz says. “The Bitcoin market both BTC and BCC – is more valuable than ever before. It would appear that the market has reacted favorably to this early test of currency run by the masses — what appears to be democracy in action.”

Schmeltz explains the recent fork demonstrates that a currency without a central governing body can survive controversy. “Here, of course, a large number of BTC community-members firmly believed that the ‘segregated witness’ methodology some members wanted to adopt to expand Bitcoin violated core principles of the first cryptocurrency,” Schmeltz says. “So, they ‘split off,’ or created a fork in the distributed ledger, to form BCC — Bitcoin Cash.”

Ryan Radloff, head of investor relations at XBT Provider, explains there have been multiple forks in Bitcoin’s history. “In a funny way, it’s a feedback mechanism or voting system by the community to choose which version of a protocol upgrade they believe is best for the coin,” Radloff says. “The strongest and most fit will survive, just like anything in life.”

But the reasons for the fork, of course, are complex. Radloff explains it happens when a suggested protocol upgrade (code-base update) is not supported by the entire network and thus, the entire network does not upgrade or implement the change.

“At this point, there are two versions of the codebase, with a shared history that diverges at a specific point in time –at which point all future transactions are unique to each codebase and recorded on a different blockchain,” Radloff says. “With respect to the recent Bitcoin fork which resulted in Bitcoin Cash: a rule in the original protocol limited the number of transactions per second.”

This has created drawbacks as the scale of the network has grown larger. As a result, a group of developers who maintain the network, alongside the core Bitcoin developers, created a rival token known as Bitcoin Cash, designed to allow more transactions per second.

“The core development team also implemented a solution which makes it easier to build protocol on top of the Bitcoin network which allows faster transactions,” Radloff says. “This approach has seen widespread adoption and is allowing the network to scale up – likely a partial driver of the most recent rally.”

All is not hunky-dory in the Bitcoin world and we must acknowledge prepare for further problems.

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Aaron Lasher, co-founder and CMO of Breadwallet, noted thatBitcoin has a scaling problem and can only clear about three transactions per second.

“Due to its popularity, it’s operating at max capacity,” Lasher says. “The fork was the culmination of almost three years of heated debate about how to scale bitcoin so that it can process transactions more quickly. Two sides had very different solutions, each with trade-offs that require deep knowledge in computer science, technology, and economics to fully comprehend.”

Lasher explains that, ideally, the community of developers, miners and users would have come to a consensus and preserved the network as one Bitcoin, but that didn’t happen and the network split in two. The landscape has changed, because now neither scaling solution is hypothetical; they are both in the wild, where they will compete for dominance in the marketplace.

This is what a top bitcoin player is doing right now.

Is another Bitcoin fork for possible?

“Regarding another split or fork for Bitcoin – generally speaking spin-off’s are good for both entities – old one and newly created,” says Krzysztof Kolaczynski, the founder of STABLE, a company which aims to reduce the inefficiencies existing in cryptocurrency markets and stabilize them. “But inthe nearest future, I don’t think that another fork would be good for Bitcoin.”

“The worst possibility for me at this moment is arranging in the near term another fork – that could put the trust under the danger and I am afraid that it would trigger a cascade reaction of new forks and we don’t know what would be the consequences,”Kolaczynski adds.

Kolaczynski explains we should wait at least couple of months in order to see if Bitcoin and Bitcoin Cash benefited both entities arranged into this deal.

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Will the Bitcoin Fork Continue to Boost the Cryptocurrency’s Value? – TheStreet.com

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