Bitcoin’s falling back from record highs

Bitcoin has fallen back from its latest record high after plans to split the cryptocurrency were suspended.

It surged past $7,800 late on Wednesday evening, a fresh all-time high, when it was revealed that there was not enough backing for the so-called fork known as Segwit2x that would have increased transaction capacity.

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“When 2x was called off, it became immediately clear there’s greater consensus for a single bitcoin blockchain and therefore there is greater value retained in the bitcoin ecosystem," said Ned Scott chief executive of Steemit, a blockchain-based social network.

That surge quickly fell back, with bitcoin now at $7,201.53 at pixel time.

"Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together," said Peter Smith, co-founder and chief executive of bitcoin wallet Blockchain in a blog post, along with several others involved in the split.

"Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x."

The group, which also included Mike Belshe of BitGo, Wences Casares of Xapo, Jihan Wu of Bitmain, Jeff Garzik of Bloq and Erik Voorhees of Shapeshift, indicated they believe the fork will happen at some point out of necessity, however.

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"As fees rise on the blockchain, we believe it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase," they said.

Two previous forks of the bitcoin blockchain have been successful, but they must have majority support among the community due to the de-centralised nature of cryptocurrencies.


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