Bitcoin Fork Marks Historic Day for the Cryptocurrency - TheStreet

Cryptocurrency core developers and miners will decide whether bitcoin remains as it is or whether there will be a hard fork today. This fork will create Bitcoin Cash, which is splitting the mining community.

So what does a bitcoin fork mean? Ryan Radloff, head of investor relations at bitcoin specialists XBT Provider, explains the existence of a fork in this case means that there is a group of people in the bitcoin ecosystem that do not agree with the rest of the network.

Essentially, Bitcoin's transaction history and blockchain will split; that means investors who have bitcoins in a cyber wallet or exchange will receive an equal number of the cryptocurrency in the newly created Bitcoin Cash.

Segwit2x is the plan agreed by bitcoin developers and miners which would expand Bitcoin's block size from one megabyte to two in November. 

"Specifically these people believe that the current technological upgrades to bitcoin -- Segwit2x, adding segregated witness and a block size increase -- is not the right path forward for bitcoin," said Radloff. "Therefore, they could/will 'fork' the bitcoin chain, and create their own unique version of bitcoin without these upgrades."

When is the bitcoin fork expected to happen? Laurent Kssis, managing director of XBT Provider AB it is expected to fork early afternoon in the U.K., or before the opening bell in New York. 

"It is considered likely that this will be the result of an alternative protocol -- an alternative to the currently prevalent bitcoin protocol -- having attracted sufficient mining power, 'proof of work' and economic activity to enable it to develop and sustain its own chain," Kssis said.

Hence the coin with the most substantial proof of work underpinning it -- for example, the coin with the longest fork on the blockchain and which is therefore the more dominant -- will reflect the aggregated value of each coin, at least for the short term following such fork.

"Many exchanges have said they will not support it, which is denying the community of their so called bitcoin rights in value," Kssis said. "So you could say bitcoin cash is trying to steal the bitcoin brand and may succeed; however, within two weeks after this event, we may look back having not taken the opportunity to consider the true value of bitcoin. This will also test the robustness of blockchain. Many institutional investors are watching this event unfold."

So how does Bitcoin Cash differ?

Radloff says it most differs from traditional Bitcoin, because it will not have a technology upgrade called segregated witness, which separates the transaction signatures into another parallel database used to verify bitcoin transactions.

Should investors holding bitcoin before the fork be concerned?

"Anyone holding bitcoin before the fork, will also be entitled to own bitcoin cash, as they share the same transaction history," Radloff says.

Radloff also warns investors must be in control of their own private keys to be able to receive bitcoin cash, or have their bitcoins on an exchange that will support both Bitcoin and Bitcoin Cash.

"The User Activated Soft Fork [UASF], if [the split] happens, will give every bitcoin user new bitcoin cash cryptocurrency tokens on a new blockchain with different rules," says Michael Parsons a bitcoin entrepreneur, adviser and founding member of the UK Digital Currency Association.

"It is very hard to predict what will happen to the future trading price of bitcoin and bitcoin cash," Parson adds. "Some will sell their bitcoin due to uncertainty or not knowing how to deal with the situation, but it is possible that we will see Bitcoin first suffer a small decline then increasing to over $3,000 as users are now much more confident in the bitcoin community than before."

Parsons also believes Bitcoin Cash could also possibly grow into one of the largest altcoins, comparable to how Ethereum Classic has now become the seventh largest altcoin, starting from $0.75 and now currently trading around $14 after the Ethereum Hard Fork last year.

No doubt it is an important day for bitcoin. Charlie Morris, chief investment officer at Netscape Capital Group says: "Today, is one of Bitcoins most pinnacle days of its life so far."