Bitcoin is making a split on Tuesday, but that may not mean investors should, too.
Bitcoin's transaction history and blockchain will fork on Tuesday, giving everyone who stores bitcoins in a participating wallet or exchange an equivalent number of coins in a brand new cryptocurrency, Bitcoin Cash. According to the future's market, Bitcoin Cash will be valued at around $300. Bitcoins are more than $2,800 each, up more than 180% in 2017 to date.
As a part of a years-long debate over how Bitcoin records transfers, groups of developers are creating Bitcoin Cash to accommodate more transactions. Bitcoin has one megabyte per block, which allows it to process about five transactions every second. Bitcoin Cash, however, will have eight megabytes per block and should be able to process 30 transactions every second, Sean Walsh, partner at Redwood City Ventures, told TheStreet.
"It's one of the most exciting developments in Bitcoin over the last five years," Walsh said. "Those of us that have millions of dollars invested in Bitcoin and Bitcoin ecosystem, we want to see this thing grow into a global network. But when you only have 500,000 people who have at least one Bitcoin, that density [processing five transaction per second] of the fabric is too slow."
For that reason and having had conversations with long-time investors in Bitcoin who are supporting the new cryptocurrency, Walsh said he is bullish on the unexpected "dark horse" currency, because it solves this challenge. He said he thinks the ratio between the bitcoins could flip by this time next year.