With such astonishing rises, you would think everything must be hunky dory in the house of bitcoin. I suppose with so much money at stake we shouldn’t be surprised that the answer is actually no.
Bitcoin is not controlled by a single entity but it is all overseen by several key stakeholders. One is the core group, who maintain the code of the system. Another are called miners, which ensure transactions happen on the system and finally there are the exchanges who hold your digital wallet and move money in and out of the system.
All three need to agree to keep everything ticking along nicely and of course they haven’t been agreeing for years but time finally caught up forcing them into some sort of action.
Basically bitcoin became so popular that the mechanisms that keep it going were becoming too slow. Think of a restaurant that didn’t staff up when it became a hip venue requiring you to wait for hours to get a table.
The solutions to “staffing up” though never got broad agreement and after a moment when it looked like a messy agreement which appeased by far the majority was going to be implemented, a small subset of the core group jumped ship creating a whole new type of Bitcoin called Bitcoin cash.
You would think that was a recipe for disaster, who on earth would hold money in something so badly managed?
Well this is the way building open source software is designed - the group that disagreed have spun out separately and if enough people agree with them then they will create their own new community alongside the old one. I’m just not sure I want this hassle with my money. One minute I have X bitcoin, now I have X bitcoin and Y bitcoin cash?
For bitcoin cash, it looks like the slow decline has already started. There is no good reason other than believing in its developers to hold it and its price continues to decline slowly. I wonder how many holders of bitcoin even know they are holding a store of an alternative currency as some exchanges do not even make it visible.
For bitcoin itself though, the timing turned out to be good. The growing hype and increasing uncertainty in the markets has allowed bitcoin to come through it all and removed a group that was holding the overall system back - for better or worse.