Bitcoin: mounting fears over possible August hard fork
Quebex Fintech Inc.
Jul 10, 2017

Investors and developers are hot under the collar thanks to the looming possibility of what’s known as a hard fork.

A hard fork occurs when a new rule or protocol is applied to the network that isn’t compatible with the previous software.

User-activated implementation of the SegWit protocol will reportedly take place in a few weeks’ time on August 1st following years of debate over how best to tackle bitcoin’s worsening scalability problem.

Bitcoin core developer Pieter Wuille first proposed SegWit in 2015 to solve issues unrelated to scaling; security was Wuille’s primary concern, at the time.

However, given Bitcoin’s meteoric rise in popularity over the past year or so, it has become clear that the 1MB block size is no longer sufficient to deal with the estimated 350,000 (and growing) transactions a day.

Back in 2012, the network confirmed a daily average of just 8,000 transactions.

This rapid increase in network activity has caused fees to increase and has slowed down transaction flow substantially, meaning trades can sometimes take hours to be successfully processed on the blockchain.

It is rumoured that miners may initiate a hard fork after 12 hours of SegWit in an act of rebellion or an attempt at self-preservation, depending on perspective; this could potentially wreak havoc on bitcoin’s underlying technology and even cast doubt over the coin’s future.

In the event of a hard fork, all nodes would be required to upgrade to the new version of blockchain technology or else risk being left with old versions of bitcoins which would most likely plummet in value.

Alternatively, investors could find themselves with two versions of their coins, old and new, which could lead to a battle for hearts and minds over which coin to favour going forward.

Either way, August 1st threatens to be a day of fear and confusion for the bitcoin community.

Some are warning long term Investors to move their bitcoins from exchanges to personal wallets, while for others suggest everything is business as usual.

Bitcoin is currently trading at $3,149.86 CAD as of 12pm, ET, Monday, according to price indexing data from CoinDesk – down 3.22% against the US dollar in 24 hours.

In other news, the entire cryptocurrency market has suffered terribly over the weekend with almost all coins showing red and total market cap down an eye-watering (approx.) $10 billion CAD since Friday to roughly $113.5 billion CAD, according to CoinMarketCap.