Now, the software developers and miners agreed for approving the software upgrade, Bitcoin Improvement Proposal (BIP) 91. The SegWit2x tech includes a bit of both, pushing some data outside the main network and promising to double the block size to 2MB by November. Bitcoin cash was created as a rival configuration to expand the capacity for processing transactions.
A rig for mining Bitcoin.
One solution to the problem is to increase the block size so that more transactions can fit in, but this potentially makes things more hackable.
But therein lies the rub.
Unlike other software, the developers can't simply make changes unilaterally - they need to have the agreement of the groups and companies that are responsible for "creating" Bitcoin.
Also, with August 1 being the scheduled activation date of BIP 148, all the above-mentioned exchanges have said that they will halt transactions on their platforms before midnight on July 31. "While it is still a highly experimental and volatile system, the market is being allowed to determine which version of Bitcoin is more valuable - and this is an important precedent to set".
Bitcoin exchanges are on high alert, with many halting their transactions indefinitely until the new activation rules are implemented. Add to that all the sudden increases in transaction fees. The difference between the two types of Bitcoin is the size, quantity and value of the coins. People who choose to solve complex mathematical puzzles through the blockchains to receive Bitcoin rewards are known as miners.
Mining involves computers being tasked with solving hard mathematical problems in order to authorise transactions on the blockchain. He says the concept is similar to Clams, digital coins that were also awarded to bitcoin holders in 2014 but now trade at about one-thousandth of bitcoin's price.
This post explains what customers can expect from Coinbase in the event of a split (or fork) in the Bitcoin network. "The existing ledger at the time of the split is preserved, thus users retain any balances they had before the split".
It's worth pointing out that BCH depends a lot on the miners, who are now busy trying to work through complex codes in order to provide traders with the Cash they want.
Which, well, it might.
If it were to be used in everyday transactions, and therefore, to compete with VISA, then something needed to happen.
While a number of exchanges are trading bitcoin cash, others are not accepting the new cryptocurrency at all. Or the fork might not even happen at all!
Since its introduction into the market by Satoshi Nakamoto, Bitcoin has taken off as a way to exchange money by cutting out the banks and the government entities underwriting currency. This has been compared to a stock split, but the similarities are fairly tenuous as there is no real link between the prices of the two cryptocurrencies.