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Aug 9, 2017

Industry insights,

Bitcoin has split, so what does this mean?

To understand why and how Bitcoin has split in two, it might be helpful to understand more about Bitcoin itself. Bitcoin is a cyber-currency that exists in the digital world. It originated almost ten years ago, developed and influenced by cybercriminals that had a need to create a virtual cryptocurrency that was harder to trace. Prior to Bitcoin, we were far more likely to get disruptive viruses and malware, ransomware was not as popular with the criminals because the only way to get paid was by bank transfer or Western Union, both of which could be easily traced back to an individual. Nowadays though, and with the birth of the cyber-currency Bitcoin, cybercriminals have two distinct advantages of using this currency: by operating as a decentralised currency, people are able to pay other people without the use of a middleman, i.e. a bank or credit card company. And with the use of blockchain, a series of blocks that make up one single transaction, it provides them with much greater levels of anonymity.

The value of the coin

It’s hard to know for sure what role cybercrime has had on the value of Bitcoin. Although, I suspect it’s one, if not, the main driving influence next to the sale of black-market goods. If it’s illicit, then Bitcoin seems to be the currency of choice. When it first came out in July 2010 it was worth 0.07USD, seven years on and that same Bitcoin is now worth 3,229.29USD, and not only that but the currency actually split on the 1st August, into two virtual currencies: the original Bitcoin and Bitcoin Cash.

What does this all mean?

Users of Bitcoin may login to their accounts this week to find an equal sum of money in a new account called Bitcoin cash. Bitcoin Cash has come about because of a need to extend the accessibility of the current and improve the way consumers throughout the world use money. It sounds too good to be true, and first reports are suggesting just that. Even if this new currency is accepted as a method of payment, and it’s likely most Bitcoin-storage services won’t recognise it straight away, it’s too early days to know if it will be a replacement or even a contender as a virtual currency.

Bitcoins Cash value and the influence this might have on cryptocurrency’s purpose will only be determined once we know how many investors opt for Bitcoin Cash over the original Bitcoin, and only then we will see what affect this will have on the overall value of the original Bitcoin currency.