Last week we saw the price of Bitcoin reach a high of $7,575 before it began a decline – currently priced at $6,997.
Whilst it seems likely that a drop in price could simply be down to a correction in the market following a huge rise in price, there also appears to be a lot of hesitation in Bitcoin market at the moment due to Segwit2x.
Why the uncertainty?
Bitcoin is set to undergo yet another hard fork in its software, known as Segwit2x. The hard fork is probably the most controversial of the recent forks, and is likely to cause a split in Bitcoin – thus creating another coin currently known by many as ‘B2X’. The difference between Segwit2x and previous controversial hard forks (Bitcoin Cash and Bitcoin Gold) is that Segwit2x plans to be the real Bitcoin. Segwit2x even plans to be called ‘BTC’ which is causing confusion in the market.
After the hard fork takes place, investors will be left guessing which of the two is the ‘actual’ Bitcoin. Bittrex (one of the largest Bitcoin exchange) has today issued a statement where they say the current Bitcoin will remain as ‘BTC’…..for now at least:
In the event of a chain split, “BTC” will remain the existing Bitcoin chain with 1 MB blocks until the industry and ecosystem demonstrates a clear chain preference for Bitcoin. Bittrex will take all reasonable steps to ensure that customer funds can be preserved on both chains. Bittrex will make all reasonable attempts to credit our users chain split tokens. We will not recover incorrectly made cross chain deposits under any circumstance due to the lack of replay protection.
Should Segwit2x, as predicted cause a split in Bitcoin, it would mean we would be entering unprecedented territory. Segwit2x has caused many to worry in that it does not appear to have ‘replay’ protection. Replay protection is very significant when it comes to Bitcoin; without it new transactions could appear on both chains – Basically it could mean that if you make a transaction on one chain it can be “replayed” to the other. For example, following the split, you may wish to transfer 1 ‘B2X’ coin to another wallet, however the transaction may also be “replayed” on ‘BTC,’ meaning you also lose 1 ‘BTC’ coin.
Splitting your Bitcoin when the fork occurs will therefore become a much more difficult task (unlike Bitcoin Cash which had replay protection). Those who hold Bitcoin prior to the hard fork are urged to use caution when trying to access their ‘free’ ‘B2X’ coins. You do not want to be in a position where you try to access your ‘B2X’ coins and lose your original Bitcoins due to the lack of replay protection. Please conduct your research on the wallet you are using to store your Bitcoins.
Please read the following statement from Trezor which provides further information (the statement from Trezor is only in relation to coins stored on Trezor – you should find information from your own wallet/exchange/trading platform well in advance of the proposed hard fork).
This uncharted territory in which we are about to enter has left many selling their Bitcoins prior to the hard fork, it has also scared potential new investors as they await clarity on Sehwit2x.
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We are not investment or financial advisors and are here to provide news and our opinions. Please be fully informed regarding the risks and costs associated with trading the financial markets and the Cryptocurrency market, it is one of the riskiest investment forms possible.