Bill Hubard’s Crypto Review 31 July ‘17

Bill Hubard’s Crypto Review 31 July ‘17

Bill Hubard’s Crypto Review 31 July ‘17

Monday, July 31, 2017 - 09:15
Bill Hubard’s Crypto Review 31 July ‘17

What happens if Bitcoin splits tomorrow?


*     August 1, 2017, is another KEY date for Bitcoin. Indeed, there is a material risk that the most famous crypto currency could be split into 2 different digital currencies. A ‘new; algorithm needs only to be activated and simply validated by a majority of miners, the people who approve transactions, for Bitcoin to be broken in half.


*       The Bitcoin network's transactions are only able to process less than 7 transactions per second, which in this nanosecond algo-trading world, would prevent its expanded use. In order to increase the settlement speed, a ‘new’ transaction process, must be implemented. If users do NOT accept this change, the split will occur. Then there would be 2 different Bitcoins (names have not been assigned) for which owners would need to choose which one they want.


*      However, it seems that a small community of Bitcoins users are trying to organize a hard fork from Bitcoin to a new protocol called “Bitcoin Cash”. For the time being, it is going to be a minor change. But this change may have deep consequences if other users decide to switch towards this new “altcoin” crypto currency.


*     There may be ONE thing to take care of there. Indeed, surprises may still occur and the new version can still be successful in the future. Yet in case of a now very likely hard fork scenario - The Bitcoin Cash creation -, the thing to do should be to leave your own Bitcoin in a wallet and wait to see which exchanges support both versions. Investors will anyway own Bitcoin on both forks. On the contrary, Bitcoin stored at exchanges depend on the fact that the marketplace may NOT fully support both assets.


*      Yet while certainly intriguing, the story is NOT new. Last year, the crypto currency Ethereum had to be split after a hack and it would have been wise to keep its Ether in a wallet. Delaying the decision would have allowed the holder to choose the ETH version which had been up to almost $400 while the classic version ETC is stalling below $23.


*     Regarding the market, volatility in all crypto currencies has been massive on normal days. Bitcoin fork fears are definitely driving the whole crypto market at the moment. Earlier last week, Bitcoin

reached again almost $3,000 before bouncing lower. This has consequences as all other coins’ prices are also suffering at the moment.


*     This may be a good moment to stack a few more altcoins. Bitcoin's future looks definitely unclear at the moment and despite its innovative technology, the oldest crypto currency does NOT compete

anymore with newcomers (altcoins). Bitcoin's first mover quality provides it with a strategic advantage for potential massive usage.


*     However, in this NEW virtual reality it is NOT always the best technology that wins, it is the best experience.