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Are Bitcoin Traders Preparing For a Hard Fork?

Are Bitcoin Traders Preparing For a Hard Fork?

Are Bitcoin Traders Preparing For a Hard Fork?

Several bitcoin traders are preparing for the possibility of the potential occurrence of a split chain, in which the public blockchain of bitcoin splits into two and creates two separate bitcoin networks.

Experts including Vitalik Buterin have stated earlier this week that the proposal of Segwit2x, the solution drafted by 58 companies including Barry Silbert-led Digital Currency Group, is a political movement developed by a certain group of companies attempting to develop bitcoin different vision.

In 2016, Ethereum Classic forked off Ethereum and created two persistent blockchains of the Ethereum network. The Ethereum Classic development community fundamentally disagreed with the decision of the Ethereum Foundation to bail out investors from the Decentralized Autonomous Organization (DAO) and also hoped to transform Ethereum into a digital currency with bitcoin-like philosophies and structure.

Supporters and developers of Ethereum and Ethereum could not have possibly collaborated together toward an identical vision due to contrastic beliefs and strategies. Ethereum is also actively investigating into the implementation of the proof of stake (PoS) consensus protocol, which Ethereum Classic disagrees with.

Within bitcoin, there exists two communities that are currently leading bitcoin development: Bitcoin Core and Segwit2x (Bitcoin Unlimited). Bitcoin Core developers and their supporters have been in conflict with the Segwit2x proposal due to potential security issues in regard to its untested software.

Still, overwhelming hashrate from miners have expressed their support toward Segwit2x. But, Arthur Hayes from Hong Kong-based BitMEX told Bloomberg that it has become unclear whether Segwit2x will be implemented because of its untested and unapproved codebase.

“It’s a high-stakes game of chicken. you’re a trader, there’s a lot of uncertainty as to what happens,” Hayes told Bloomberg.

Stephen Pair, the CEO of bitcoin payment service provider BitPay, also explained that it has become an issue of allowing an alternative group to pursue their own vision for scaling and leaving the majority to decide which version of the Bitcoin network best suit the community’s vision.

After Ethereum Classic forked off from Ethereum, both chains have sustained their market caps, with Ethereum Classic maintaining a relatively high market cap of $1.7 billion.

“It’s moderates versus extremists. It depends on how much a person values the majority of people staying on one chain at least for a little while longer, versus splitting and allowing each [to pursue] their own vision for scaling,” said Pair.

Despite optimistic trend of bitcoin in terms of increasing user base and mainstream adoption, with hundreds of thousands of merchants accepting bitcoin in Japan and Switzerland approving a private bank in providing bitcoin services to consumers, bitcoin price has been stable and struggling to surpass its previous all-time high of $3,097.

Some analysts including Hayes believe that the recent stability of bitcoin price can be attributed to traders preparing for a hard fork and being cautious in investing in bitcoin.

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

Bitcoin Trading Ethereum Classic Hard Fork Segwit2x