Bitcoin Price Dives Over 5% as Bitcoin Gold Enters the Market
A new fork of the Bitcoin Blockchain has caused the original digital currency to drop in price.
Bitcoin Gold came into existence on Tuesday as a new iteration of the original Bitcoin Blockchain forked off. This fork comes less than three months after the controversial Bitcoin Cash fork and its effects are being felt.
It should be noted that the use of the word “fork” is done lightly. As Bitcoin Gold has essentially zero chance of replacing Bitcoin in the marketplace, it’s more of an air-drop than a chain split. However, there has been some market turbulence.
The aim of Bitcoin Gold
Bitcoin Gold is “an adjustment” of the Bitcoin Blockchain that claims to try and once again make mining accessible to the general public. Miners and major mining operations and pools have presumably annexed this aspect of the cryptocurrency marketplace, and some tout Bitcoin Gold as the solution.
“This is what will be required to make fair mining accessible to the general public once again,” said Robert Khune, a strategist at the Bitcoin Gold project. “A successful fork will prove that Bitcoin always has the ability to escape from any potential abusive mining hardware manufacturers,” who he blamed for “unnecessary stalling” this year.
Why the downturn?
Bitcoin dropped 4.4 percent to $5,652 as of 8:55 a.m. in New York on Wednesday, paring a decline of as much as 5.9 percent. The cryptocurrency is still up 36 percent this month and about six-fold percent this year.
“Bitcoin’s recent downturn has been driven by the traders’ anticipation of minor disarray in the wake of the upcoming hard forks,” said Thomas Glucksmann, Hong Kong-based head of marketing at cryptocurrency exchange Gatecoin. “The Bitcoin exchange and wallet community have been divided over their decisions to support or reject these contentious hard forks.”
Many are also speculating that Bitcoin rallied ahead of this fork as there is the opportunity to essentially double your coins. Holders of Bitcoin would also be credited with equal amounts of Bitcoin Gold. However, not many exchanges have offered support of Bitcoin Gold.
Further splits on the way
Further splits may be imminent. One faction of the community wants to increase Bitcoin’s block size to shorten transaction times, while another is opposed. The first phase of this plan, called SegWit2x, was implemented in August and took some of the data off the main network.
Again, this next fork is being met with more opposition as cryptocurrency trading platform BitMEX has told users to dump SegWit2x Bitcoins “immediately” following November’s hard fork - labeling them ‘ShitCoin2x.’