If you follow or own cryptocurrencies or have generally found yourself interested in Blockchain, you have likely heard about the “Bitcoin fork” that occurred on Tuesday. Amidst the flurry of opinions and speculations, we thought our followers might appreciate some clarity as to how the split happened and what it means in simple terms.
New currency direct descendent of Bitcoin
This morning the digital asset company Coinbase sent their users a message explaining what a Bitcoin fork is and announcing their decision to add support for Bitcoin cash for Coinbase customers. “A ‘fork’ is a change to the software of the digital currency that creates two separate versions of the Blockchain with a shared history,” writes David Farmer, Director of Communications at Coinbase /1/.
This shared history means that a new currency can be created without having to start from scratch. The second version of the Blockchain made possible the generation of a separate cryptocurrency – Bitcoin cash.
Who can access Bitcoin cash?
Bitcoin cash retains the previous transaction history of Bitcoin’s Blockchain and accordingly leaves the owner with the same value in Bitcoin cash as they had with Bitcoin. Private users can access and use the new cryptocurrency today, however there is a catch. Those using a digital asset platform (such as Coinbase) to oversee their cryptocurrencies must wait until the company decides to support the new currency to access it.
Why all the hype?
The decentralized nature of Blockchain and lack of third-party control allows for digital currencies to be developed quite freely – thousands of cryptocurrencies exist. Bitcoin cash is unique in that it was not created from scratch. Because its roots are in the Bitcoin Blockchain, its value is significantly higher than that of many other “from scratch” cryptocurrencies that failed to take off like Bitcoin.