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Bitcoin Split, Bitcoin Cash Trades Above $400

By:
Bob Mason
Updated: Aug 3, 2017, 07:45 UTC

The Bitcoin world received its first hard fork yesterday at 1:20 BST , with a new blockchain being introduced to the Bitcoin world known Bitcoin Cash. The

Bitcoin

The Bitcoin world received its first hard fork yesterday at 1:20 BST , with a new blockchain being introduced to the Bitcoin world known Bitcoin Cash.

The original Bitcoin, now referred to as Bitcoin (BTC) had fallen by 4% to $2,726.19 at the time of the report as the uncertainty over what lies ahead now grips Bitcoin, as the market considers the possibility of Bitcoin Cash becoming the centrepiece of Bitcoin.

It now comes down to the level of support that Bitcoin Cash (BCC) receives to decide its fate, with a lack of support likely to lead to an early end to the challenge made by miners looking for increased capacity, delivered by Bitcoin Cash. Bitcoin cash trades at $442 on Wednesday morning.

Various scenarios have been floated around the markets in the lead up to today’s fork event, all of which is subject to the percentage of hashpower that Bitcoin Cash with some of the more discussed scenarios including:

  • Little impact on the Bitcoin blockchain, with average blocks estimated to take slightly longer than 10 minutes. This is on the basis that less than 16% of Bitcoin’s current hashpower shifts to Bitcoin Cash, such a low hashrate leading to an estimated 1 hour for the first block transaction.
  • If Bitcoin Cash receives more than 16%, but less than 50% of Bitcoin’s hashpower, the first block is estimated to take between 20 minutes to 1 hour, such an outcome expected to then impact the speed of Bitcoin, which is then estimated to slow from an estimated 10 minutes to between 10 and 20 minutes, depending upon the hashpower lost to Bitcoin Cash.
  • Should Bitcoin Cash receiving greater than 50% of Bitcoin’s hashpower, Bitcoin Cash’s first block is estimated to take less than 20 minutes, which will hit the speed of Bitcoin even harder, with blocks on Bitcoin estimated to take longer than 20 minutes.

With Bitcoin Cash live, the price of Bitcoin Cash rose to $314.88 at the time of the report, futures prices having been at sub-$300 levels before its creation.

Bitcoin August Timeline

Between now and 3rd August, exchanges supporting Bitcoin Cash will begin receiving both Bitcoin cash, with the exchanges having assured to continue operations through the fork now in effect.

Between 3rd August and 7th August, there will likely be some switching between Bitcoin and Bitcoin Cash, the direction of demand expected to be driven by anticipated gains by Bitcoin users, with Bitcoin users likely to want to take advantage of any immediate upside in the days after the Bitcoin Cash’s launch.

During this time, assuming there is no material shift in hashpower, block times are estimated to be at around the 10 minute mark.

Between 8th August and 14th August, SetWit is anticipated to be locked in during this time. How long it takes for SegWit lock-in on block 479,808 to take will be dependent upon how much hashpower has moved to Bitcoin Cash, the more hashpower supporting Bitcoin Cash, the longer it will take for lock-in.

If coin holders were looking to cash out, they’ve missed the boat for now with transaction times expected to be snail’s pace, with some exchanges actually not permitting transactions over the next few days.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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