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What does the failed fork mean for bitcoin?
Bitcoin has no governing body, but rather a community of stakeholders that have different (often opposing) views on the future direction of the cryptocurrency. These disagreements cause forks in bitcoin software.
The current split has been caused by a belief that bitcoin is getting slower in terms of what it is technically meant to do, especially when compared to some of the newer cryptocurrencies. A faction of the community believe that bitcoin needs to fundamentally change to keep up, for example, by doubling its block size.
This is not the first time this disagreement has occurred. The introduction of bitcoin cash caused a division within the community of users, with some believing it had potential to supersede legacy bitcoin. This possibility has been termed the ‘flippening’.
Though this time there was an agreement to work together to overcome the issues, the possibility of a fork is not gone, and further eruptions are likely to occur.
Is bitcoin still the most significant cryptocurrency?
Yes, despite the debate surrounding its future. Put simply, bitcoin is a legacy currency – it has status and longevity.
In ‘real world’ currencies, for example, the US dollar (USD) is the world’s biggest currency, and is required for trading commodities around the world. But if we were to look at indebtedness, we would see that theoretically, the US dollar should not be a success. Instead the Singapore dollar would be a better option, but because it is smaller and less respected, it is overlooked.
The same principle applies to bitcoin. People are risk averse, and reluctant to move away from the legacy coin into alt-coins.
Like forex markets, cryptocurrencies are subject to periods of extreme volatility. When deciding which to trade it is important to look at charts, and make educated decisions about which coin you think has the potential to go up in value.
The death of bitcoin has been called many times when we see period of low volatility, but these calm periods should present the most interest to traders.
Will bitcoin cash surpass bitcoin?
Bitcoin cash is getting recognition for its superior functionality and is now ready to ‘step into the spotlight’. There has been speculation of bitcoin cash dethroning legacy bitcoin, but this has caused traders to panic buy and exhaust the market.
The flippening has been predicted to occur when the price of bitcoin cash and the legacy coin get closer together, but for the value of bitcoin cash to compete with the bitcoin, we’ll need to see a sustained period of confidence in cash and support from the mining community.
The flippening will not be an overnight event but a possibility – the war for the soul of bitcoin rages on.