Bitcoin faces split, clone digital currency a possibility
01 Aug 2017
Popular digital currency exchange, Coinbase, has drawn the ire of customers over its decision not to support a new version of bitcoin, a decision that could also make it vulnerable to "ruinous legal trouble," according to a prominent legal scholar, Fortune reported.
Coinbase's troubles stem from a breakaway faction of bitcoin miners, who are responsible both for generating new coins and for the software called blockchain that is used for recording transactions. The miners will today implement a software update that will create a so-called "fork" and produce two versions of the bitcoin blockchain- and two forms of the currency as well.
The creation of the new currency meant every existing bitcoin holder was entitled to an equal amount of what the breakaway miners call "Bitcoin Cash." But the decision of Coinbase against supporting the new version, however, means its customers will forgo the benefit.
According to commentators, this was significant as the new Bitcoin Cash was expected to be worth real money. As of 31 July, futures markets predict a unit of the new currency will be worth hundreds of dollars.
Coinbase is facing a barrage of angry posts on its message boards, accusing the company of stealing their property and threatening class action lawsuits.
According to commentators, if a fork were to go ahead, it would be significant as it could create a new competitor for bitcoin, which is the oldest and most valuable digital currency. It was not clear when the fork happened and how much the new coin would be worth.
"This is somewhat like a stock split," said Jeff Garzik, chief executive and co-founder of Bloq, a blockchain company, Reuters reported. "You go to sleep with 100 bitcoins and wake up in the morning with 100 bitcoins plus 100 'Bitcoin Cash', a new token."
A split was averted two weeks ago, when Bitcon software developers and miners agreed to implement a software upgrade called the Bitcoin Improvement Proposal (BIP) 91.