Bitcoin announced early last week that a “fork has happened” and the cryptocurrency officially split into Bitcoin and Bitcoin Cash. This split has created two separate and distinct cryptocurrencies hoping to resolve Bitcoin’s issue with slow transaction speeds.
As Bitcoin has grown in popularity, the trading volume also has increased. Bitcoin was the first cryptocurrency to use a blockchain technology to verify transactions, which eliminates the need for a central authority. Before the fork, Bitcoin could only process three transactions per second which led to increasingly delayed transaction times. With the cryptocurrency gaining in popularity, predictions indicated that the transaction delays would only increase.
Internal discussions with Bitcoin developers led to a “fork” resulting in creating Bitcoin Cash. Bitcoin Cash substantially increased the blockchain size which led to decreases in transaction times. The original Bitcoin now functions with an update called SegWit2x that not only increases blockchain capacity but also could take transactions off the blockchain.
What Does This Do to My Bitcoin Wallet?
Any current investors with a Bitcoin wallet received the equal value in Bitcoin Cash on August 1st. This means that for every Bitcoin in your wallet, you received one Bitcoin Cash. Not all Bitcoin exchanges are supporting Bitcoin Cash yet. Some exchanges are however, adding support hoping to have the ability to support transactions by January 1, 2018.
Peter Borovykh of Blockchain Driven said, “Bitcoin Cash could attract more new capital to the entire crypto space, thus helping increase overall market cap.” As of now, the fork has had little problems since the initial rollout. Some speculate that Bitcoin Cash will simply be an alternative to Bitcoin if there are issues with the cryptocurrency. But either way, the change will hopefully have long-term success and benefit cryptocurrency.
Bitcoin in Legal and Financial
Bitcoin as an emerging and disruptive technology is already creating seismic shifts in currency and banking, information security, and software applications. This just scratches the surface though. When it’s all said, and done, every person, along with all legal and financial firms, will be affected.
One of the primary roles of a law firm is to help clients securely transfer assets. Since Bitcoin operates using a blockchain ledger, it reduces transactional complexity and opportunity for fraud in property transfers.
This means tax, family law, merger and acquisition, estate planning, and countless other practices will be affected, not just in demand for their services, but perhaps even in the very nature of the services being offered.