Bitcoin August 1st: Update on the Potential Split

If you’ve been listening to the Bitcoin community, you would know that in less than a week Bitcoin network will go through extensive protocol changes.

The majority of miners have agreed to implement the User’s Activation Soft Fork (USAF) which would open a whole new window for other improvements in the future and drove Bitcoin price up.

However, the opposition group just came out with a new hard fork plan which would fork the Bitcoin blockchain and create a new altcoin Bitcoin Cash.

If you cannot get your head around the Bitcoin commotion, here’s your Bitcoin August 1st update on the potential split.

Let’s start from where it all has begun- SegWit.

What Is SegWit

Otherwise known as Segregated Witness, SegWit is here to update the network’s code and open the doors for future improvements, such as transaction speed.

Without getting into too many details, the biggest plus side of SegWit is the flexibility. Users are not forced to switch to a new code from day one and it will be possible to continue with transactions that haven’t supported the code yet.

Sounds good, right? So what’s the problem?

Bitcoin’s blockchain needs an update as soon as possible and SegWit will take its time. The change will only be initiated on August 1st and it will take months by the time we see any improvements. The first upgrade should happen in November and size up the network to 2MB, eventually reaching 4MB in the future.

The old school Bitcoin team is formed of the core developers. They maintain the software behind Bitcoin. The biggest argument against them is that mining became unaffordable and unless you can invest in an insanely equipment – you will be lucky to make a profit from mining.

As a result, Bitcoin miners, who were frustrated with the sluggish pace of the cryptocurrency, formed a new team. They’re promising a larger increase of the block size and faster transaction time. But it would result in creating a new altcoin – Bitcoin Cash.

What is Bitcoin Cash (BCC)

Supporters of the new Bitcoin Cash want a larger data cap on blocks. This would mean more coins being mined and more transactions being processed in a short amount of time. The new team is largely made up of mining investors and entrepreneurs that are based mainly in Asia.

BCC is promising an immediate increase of the block size limit to 8MB, and like SegWit, it will leave room for future increase. The change will speed up the transaction time and solve the malleability issue that raised complaints in the community.

SegWit will be activated on August 1st, hence those who want to avoid the feature will have to split from Bitcoin.

But there’s a major issue – what will happen with all your Bitcoins after the currency splits into two?

BCC developers ensured everyone that everyone will be able to immediately convert their Bitcoins to BCC. But there’s a catch – not all exchanges agree with the Bitcoin split and won’t support BCC. So if you’re interested in BCC you would have to check if your exchange supports the new altcoin.

BCC will still carry the history of all transactions that happened on the Bitcoin network. The new currency will be a competitive currency to Bitcoin, just like any other altcoin.

Bitcoin Cash is currently trading at $461, meaning it’s worth 18% of the current Bitcoin price.

The attempts of breaking from Bitcoin were happening through the history of the coin, and so far, they’ve all failed. The difference is that this time the developers have a deadline – with less than a week away.

What’s Next?

bitcoin august 1 chain split

No one can really say for sure what’s going to happen to Bitcoin after August 1. If the split happens, it will be a first for Bitcoin. And with a tight deadline, BCC organisers might not gain enough supporters.

Bitcoin’s closest competitor, Ether, forked not long ago. Both Ethereum and Ethereum Classic prices have gone up than before the pre-fork price. A similar thing happened to Monero which forked off Bytecoin and became more successful.

There is a possibility of a disruption on August 1 on the Bitcoin network and it doesn’t mean you should be selling your Bitcoins as soon as possible.

But it means you have to take the necessary precautions and back up your wallet. Make sure you don’t keep any of your funds on the exchange and hold onto your private keys.

What do you think about the Bitcoin August 1 potential split? Do you think Bitcoin will split or there will be disruptions? Let us know in the comments below!

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Megan is a self-taught blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.