What Does the Bitcoin Fork Mean for Cryptocurrency, InvestorPlace
The Bitcoin fork came and went, now cryptocurrency markets can get back to business
By Josh Enomoto, InvestorPlace Contributor
Rather than a day of infamy, August 1, 2017 will likely go down spil the day of no consequence. For months, cryptocurrency chatter focused almost exclusively on the &ldquo,civil war&rdquo, among Bitcoin advocates. Years after its introduction, Bitcoin transaction volume spiked to unprecedented levels, bogging down transaction speeds. A proposed solution, called a hard fork, suggested &ldquo,spinning off&rdquo, a separate &ldquo,Bitcoin contant&rdquo, cryptocurrency using the original architecture.
Other advocates balked at the idea.
The evident concern is that two similar currencies will rival ter the same market space. Ter 2016, Ethereum, the No. Two ranked cryptocurrency te terms of market capitalization, suffered a split. Albeit the conflict ultimately didn&rsquo,t negatively influence the original Ethereum (it&rsquo,s up almost Two,700% year to date), it&rsquo,s confusing. A Bitcoin fork only adds to the perplexity and mysticism of digital markets.
Another unhelpful headwind wasgoed fear-mongering. Both the mainstream media and some cryptocurrency insiders ramped up the rhetoric overheen the Bitcoin fork.
Ter reality, the resultant Bitcoin contant is nothing more than another digital alternative among 836 alternative solutions.
The Heart of the Bitcoin Architecture
To understand Bitcoin, one voorwaarde understand the blockchain, the underlying architecture that makes cryptocurrencies tick. A blockchain is simply a database where entries and transactions are verified without needing central administrators or third-party intermediaries. Instead, &ldquo,miners&rdquo, verify each transaction.
Mining is a process where decentralized agents challenge with each other to verify blocks of transactional gegevens. Specifically, this step involves the use of high-powered computers, often armed with GPUs produced by NVIDIA Corporation (NASDAQ: NVDA ) and Advanced Micro Devices, Inc. (NASDAQ: AMD ), to solve sophisticated mathematical problems.
Upon completion, the verified gegevens block is entered into a sequentially-ordered ledger chain, hence the term, &ldquo,blockchain.&rdquo, Miners who successfully verified the blocks very first receive a cryptocurrency unit, such spil Bitcoin, spil a prize.
The problem that sparked the Bitcoin fork debate wasgoed that transactions were getting larger than the system could adequately treat. Primarily, advocates proposed enlargening the size of each block. However, doing so would increase hacking vulnerability. Larger blocks would mean greater transactional value potentially compromised.
Bitcoin volgers argued that doing nothing is not a solution. Essentially, the blockchain wasgoed becoming a victim of its own success. To further the collective objective of crypto-normalization, quick, convenient and reliable transactions are non-negotiable elements.
Admittedly, no effortless solutions exist. Slow transactions are anathema to the entire blockchain concept. At the same time, security is a major concern te light of the Mt. Gox ineenstorting. Furthermore, Bitcoin contant lacks its predecessor&rsquo,s cache.
The Bitcoin Fork Wasgoed a Major Distraction
For all the hysteria overheen the Bitcoin fork, it just didn&rsquo,t do anything. Those hoping for the &ldquo,crypto-king&rdquo, to crash were sorely disappointed. At time of writing, the original currency wasgoed trading palms at just under $Two,700.
On the roll side, Bitcoin contant had a solid introduction, which presently has a market capitalization of $Ten.6 billion. That puts it at No. Three among the most highly-capitalized cryptocurrencies.
Nevertheless, the Bitcoin fork wasgoed more hype than substance. It simply adds another option for traders, investors and businesses. But, it did not solve Bitcoin&rsquo,s scaling problem, merely suggesting the markets another cryptocurrency. More challenging is that trusted exchanges, such spil Coinbase, reject to support the offshoot currency.
Spil time goes on, I think the digital markets will simply accept the two versions, just like with Ethereum. The following quote from Bloomberg ideally sums up my sentiment:
&ldquo,There&rsquo,s a role for both of thesis coins,&rdquo, said Cathie Wood, the Fresh York-based chief investment officer at ARK Investment Management, which oversees the very first exchange-traded fund with zijdelings exposure to bitcoin. &ldquo,One is much more natural for store of value and the other one for a means of exchange.&rdquo,
Ultimately, the Bitcoin fork wasgoed nothing more than a selfish distraction. Those who want swifter transaction speeds will get it with Bitcoin metselspecie. I don&rsquo,t think engaging ter a civil war wasgoed necessary, strafgevangenis wasgoed off-shooting from the original blockchain.
Despite my misgivings, the future of cryptocurrencies remains secure. Via the blockchain technology, they suggest a toneel to store and transact value outside of the traditional financial hegemony. No controversy, no hard fork, can everzwijn take that away.
Josh Enomoto is long bitcoin and ethereum, and is a strong advocate for cryptocurrencies.