OPINION: Fork Me? Fork You!
It finally happened to Bitcoin: A portion of the bitcoin community decided to fork Bitcoin’s code and created a new digital currency, bitcoin cash (BCC)
The fork occurred at 8:20 am ET on August 1, but it likely will take a bit of time for BCC miners to unearth new BCC tokens given their relatively small numbers compared to the number of Bitcoin miners.
This is the first time that coders have forked the bitcoin code, but it is likely not to be the last.
When Satoshi Nakamoto published his white paper, which eventually became Bitcoin, I doubt that he consulted any technologists who are responsible for the development and maintenance of electronic currency-trading platforms.
If he had, he would have spent far more time working on bitcoin’s scalability.
Having the network update a block approximately once every 10 minutes may be sufficient for a proof-of-concept, but bitcoin has become a victim of its own success regarding transaction volumes.
Anyone who has made a recent bitcoin transaction realizes how long it takes a transaction to post to the blockchain and it is only going to get worse.
Nakamoto limited the eventual number of bitcoins that will ever be in circulation to 21 million. Once those are circulation, their value likely will be so high to make them impractical for all but the largest transaction.
Most bitcoin transactions will move to be fractional transactions. And unlike most modern currencies, Bitcoin is not a decimalized currency. Nakamoto designed it so that its smallest sub-unit, nicknamed the satoshi by the bitcoin community, is one hundred millionth of a bitcoin.
Imagine the potential transaction volume that will enable.
The Bitcoin community has been discussing ways to address this. In May, a portion of the community floated the idea of adopting Segregated Witness code optimization that, among a few things, would double the size of bitcoin’s block size to 2 MB and improve the blockchain’s efficiency.
While the community held a lively debate over whether to implement SegWit2x, the backers of Bitcoin Cash swooped in and developed a code change that increased bitcoin’s block size to 8 MB.
It’s too early to determine whether the new digital currency with gain traction. Some in the industry estimate that based on the futures contracts that traders already have written against it, bitcoin cash will trade between $200 to $400 compared to the approximate $2,770 at which bitcoin trade currently.
However, if bitcoin cash winds up as successful as the original bitcoin, it will eventually wind up with similar scalability issues, which will lead to yet another fork.
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