What happened to the bitcoin blockchain August 1, 2017?
The bitcoin community recently faced a critical moment with some in favor of the recent “fork” that forced the blockchain to split, and others vehemently set against it. If that’s all a foreign language to you, the change likely had no effect on you or your finances. It was still an important development in the cryptocurrency sphere of finance that will have long lasting effects. It could eventually affect everyone.
What happened on August 1, 2017, is that users activated a “hard fork” in the blockchain. The blockchain is a decentralized database, or digital ledger used to record bitcoin transactions. It is stored across multiple computers. The blockchain is the technology behind the bitcoin digital currency.
What this hard fork did was create a “node” called Bitcoin ABC. It basically split off a new digital asset called Bitcoin Cash that will operate under rules different to the ones used by the original bitcoin currency. Each has its own value. Everyone who held Bitcoins received Bitcoin Cash. Some will use it, some won’t. The new currency started off with about one-tenth of Bitcoin’s value and the price has fluctuated wildly since its creation – hitting a peak of $756.93 before falling to $284.89 earlier today.
In other words, the hard fork created an opportunity for savvy and fearless investors to make a killing if they unloaded the new currency at its peak. Many analysts suggest that the current price is not likely to hold steady. It is a volatile commodity, even more so for now than the original currency is. One year ago the bitcoin value was $588, it peaked at over $3,000 in June, fell to about $1,939 on July 16, and is currently trading at about $2,890. The value was not significantly impacted by the fork – so far.
The main reason given for bitcoin splitting is a matter of scale. As digital currencies become more popular they are traded at higher volumes. Only 1 megabyte of transactions can be processed at one time on the blockchain of July 31, 2017. As demand for transactions grows, the processing time slows down. This latency can create vulnerabilities for companies accepting bitcoin. But that is not the overriding concern of change advocates. They want the network to be able to handle transaction more efficiently as digital currencies rise in economic importance.
Bitcoin Cash increases the limits to 8 megabytes – but that too could become a limiting factor in time. Now, after the fork, each blockchain can function with its own rules and a “civil war” may have been averted.
One of the major players in the cryptocurrency game, Coinbase, said they would not support the new blockchain – i.e. would not trade in the new currency. As of today, part of that position has changed. Coinbase now says they will support the fork next year but have not committed to trading. What that means is that users can withdraw value in Bitcoin Cash after January 1, 2018, according to a report on Tech Crunch.
Some observers are speculating that the Coinbase cold reserves fell by 50% when customers unhappy with the decision to stick with only the original blockchain made a “run on the bank” withdrawing their value. We have not been able to independently confirm that, but the Coinbase policy change may be an indication.
What the split means to online casino players depends on who they have a digital wallet with. For people who use Coinbase nothing has changed. They can still deposit and withdraw instantly and can still convert digital currency to cold hard cash. Click the following link for a partial list of casinos accepting bitcoin. One US facing casino to use the cryptocurrency is WinADay.eu.