Bitcoin will probably see another splintering off in November as miners and developers debate how best to scale the cryptocurrency’s rapidly growing marketplace, says investor Roger Ver, CEO of Bitcoin.com.
In recent weeks, a group of miners — people who crunch complex maths problems to generate and transact the digital currency — have split off from the legacy bitcoin to use a new version known as bitcoin cash. Ver, who has been widely dubbed “Bitcoin Jesus” for his proselytising on behalf of the cryptocurrency, is moving some of his funds into the new offshoot as he anticipates what would be the second split in the currency of 2017.
Bitcoin’s popularity has led to congestion in the trade, with transaction times and processing fees at one point soaring to records. Debate over how to deal with the problem has divided the trading community, with some proposing boosting the number of transactions in each block that has to be verified by miners, and others advocating for moving some information off the main network.
When the split occurred around the beginning of August — with bitcoin cash diverging from legacy bitcoin — the digital currency initially slumped 6.8% in a two-day slide as investors appeared to discount the value of the new coin. But prices subsequently rallied, surging to a record US$4 880.85 by 1 September before China announced a crackdown on cryptocurrency exchanges and initial coin offerings that sent prices plunging 20%.
“Bitcoin cash is much more in line with the original vision of bitcoin, I’m a much bigger fan,” Ver said. “There’s probably going to be another split between bitcoin legacy and SegWit2X version of bitcoin but that just gives me more coins that I can sell for the bitcoin cash version.”
If that split occurs, it would create another version of the cryptocurrency and potentially further scatter capital and resources as three offshoots of bitcoin emerge. SegWit2x refers to a compromise proposal developed to deal with the surge in transactions.
Bitcoin cash
Bitcoin cash — which was split off so that miners could boost the block size of transactions — is more useful as it can be moved more quickly and cheaply than other cryptocurrencies, Ver said. Some bitcoin exchanges and wallets have said they will support the new coin, while others won’t amid uncertainty over whether bitcoin cash will have lasting market value.
While an early adopter of bitcoin, Ver has also attracted controversy for his embrace of bitcoin cash, which some developers criticise for giving too much power to miners.
On Beijing’s moves to crack down on cryptocurrency trading, Ver was sanguine, saying the industry will just move elsewhere. China is home to the most bitcoin miners in the world.
“The only way to stop bitcoin is to turn off the entire Internet in the entire world and keep it turned off,” he said. “Even China can’t do that.” — Reported by Eric Lam and Lulu Yilun Chen, with assistance from Yuji Nakamura, Kana Nishizawa and Stephen Engle, (c) 2017 Bloomberg LP
