Bitcoin in Free Fall: $5.4 Billion CAD in Market Cap Lost Because of Forking
Quebex Fintech Inc. Mar 19, 2017
In the last four days, Bitcoin prices have dropped from over $1,620 CAD to $1,310 CAD with clear indications that this is the market is turning bearish. The market cap of the cryptocurrency plummeted from over $27 Billion CAD to $21.6 Billion CAD in the previous four days due to the drastic drop in price. Let's see what exactly the problem is.
Bitcoin transactions are processed at the maximum rate of 7 transactions per second. The transaction data is stored in 1MB blocks which are stacked into a blockchain. As the cryptocurrency popularity grew, so did the number of transactions. The number of outstanding transactions has started to pile up, compromising one of the promises of digital currency--quick transactions.
As a potential solution to this problem, Bitcoin Unlimited has emerged and suggested a complete removal of block size. Larger blocks allow more transactions to be stored and thus processed. Major Bitcoin industry players have supported the idea, but the majority of the community is unsure it would be completely safe and wonder if it could disrupt the Bitcoin ecosystem. Currently, Bitcoin Unlimited is run on 11% of the nodes, and the rest run the original Bitcoin Core. If 50 percent of Bitcoin miners implement and stick with Bitcoin Unlimited, there could be two competing blockchains. This would result in a "fork" between Bitcoin Core and Bitcoin Unlimited. A similar thing happened between Ethereum and Ethereum Classic 8 months ago.
Both blockchains would be operational with their respective nodes. However, there would be two unique coins – Bitcoin and Bitcoin Unlimited.
The community is yet to reach consensus about the next move - scaling or a forked blockchain with no size restriction. In the absence of consensus and a unified path moving forward, we can expect high price volatility. This is the reason why many Bitcoin investors are turning to altcoins at the moment.
Buy Bitcoins in Canada
Bitcoin transactions are processed at the maximum rate of 7 transactions per second. The transaction data is stored in 1MB blocks which are stacked into a blockchain. As the cryptocurrency popularity grew, so did the number of transactions. The number of outstanding transactions has started to pile up, compromising one of the promises of digital currency--quick transactions.
As a potential solution to this problem, Bitcoin Unlimited has emerged and suggested a complete removal of block size. Larger blocks allow more transactions to be stored and thus processed. Major Bitcoin industry players have supported the idea, but the majority of the community is unsure it would be completely safe and wonder if it could disrupt the Bitcoin ecosystem. Currently, Bitcoin Unlimited is run on 11% of the nodes, and the rest run the original Bitcoin Core. If 50 percent of Bitcoin miners implement and stick with Bitcoin Unlimited, there could be two competing blockchains. This would result in a "fork" between Bitcoin Core and Bitcoin Unlimited. A similar thing happened between Ethereum and Ethereum Classic 8 months ago.
Both blockchains would be operational with their respective nodes. However, there would be two unique coins – Bitcoin and Bitcoin Unlimited.
The community is yet to reach consensus about the next move - scaling or a forked blockchain with no size restriction. In the absence of consensus and a unified path moving forward, we can expect high price volatility. This is the reason why many Bitcoin investors are turning to altcoins at the moment.
Buy Bitcoins in Canada
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