Bitcoin begins shaky recovery following weekend plummet

Despite recent volatility, Bitcoin experienced a relatively hopeful start to the week with prices sitting at $1375 CAD a coin – up roughly 14% since Saturday’s lull and rising as of 9am, Monday (ET).

This was following another weekend slump which saw the crypto-coin’s market value bottom out at $1198 CAD per coin, the lowest it’s been since late January, 2017.

Bitcoin’s value will likely continue to flux wildly until a decision’s been made regarding the widely publicized ‘hard fork’ which is currently a hot topic of debate amongst top level developers.

A ‘fork’ can mean two diverging proof of work chains due to competing forces, or it can refer to the general term used in software development to describe a splitting of source code into different versions. Where bitcoin is concerned, the term often refers to both.



A ‘soft fork’ refers to a source code change that doesn’t change the way bitcoins are authenticated—-a soft fork will not cause a diverging proof of work type fork. Users can choose whether they want to update or not without losing extensive functionality.

A ‘hard fork’ means the opposite. It represents a software update that will result in two versions of the proof of work chain and this conflict with older versions of the software is the crux of the scaling debate. Users are offered two choices: use your hashing power to secure the current Bitcoin, or switch and secure the new one.

To be clear, the “current Bitcoin” never goes away. Even if 100% of hashing power was devoted to the new hard forking code, there still exists a block in the blockchain right before the switch was made just waiting for someone to attach a new conforming block to it.

What does go away is the value of one of the two diverging proof of work chains. There was a brief period several years ago where a miner created a large block that other clients weren’t confirming causing two factions of miners to emerge (sound familiar?).



The result was a quick and decisive switch back to the original specification by the major mining pools which essentially dropped the value of the bigger block hard fork to nothing.

Each hard fork will of course play out in a slightly different way. Had the mining pools not quickly acted to revert to the original trusted code base there could have been two competing Bitcoins years ago, each with an unknown initial value and unpredictable performance in the years to follow. One might have died off, maybe a third would have emerged.

As with all software updates, bitcoin users – especially those with a lot of money invested! – are very concerned about the possibility of bugs in new versions, which some believe could result in coins simply vanishing. Notably, there were two high profile denial of service attacks on Bitcoin Unlimited recently leading many to question whether its truly ready.

If fear causes enough people to stick with the old software, and the Bitcoin Unlimited developers and their supporters insist on moving forward, we could end up with a scenario wherein there are two versions of the coin: old and new.

Until an announcement is made regarding bitcoin’s future, it’s likely prices will remain volatile with many investors choosing to trade in other cryptocurrencies, such as Ether or Litecoin.